Durban - The State should have conducted an investigation to determine the profit made by a convicted Richards Bay businessman from the R52 million government contract he was awarded with fraudulent documents.
Durban Commercial Crime Court acting magistrate, Nalini Govender, dismissed the State’s application for a confiscation order against Ishwarlall Ramlutchman.
Ramlutchman had pleaded guilty, in September, to defrauding the Department of Public Works by tendering for contracts using false documents.
Soon afterwards, the Assets Forfeiture Unit had restrained his assets. The State had also applied for a confiscation order, seeking a return of the R52m, when he was sentenced.
Last week, the acting magistrate dismissed the State’s application to obtain a confiscation order, saying the hurdle in the State’s case was proving the value of Ramlutchman’s profit from these tenders, which was not determined.
The State was requesting the return of the contract value. However, Govender said there was no case law to refer to on the return of a contract value, but instead on the return of profit.
Last month, Ramlutchman was fined R500 000 or 10 years’ imprisonment and received two five-year suspended sentences on 21 fraud charges and one of corruption. He had pleaded guilty to, through his company AC Industrial, submitting false documents to the Construction Industry Development Board to improve the firm’s grading to bid for government tenders.
In court papers for the confiscation proceedings, the Asset Forfeiture Unit’s forensic investigator, Akbar Ally, said Ramlutchman’s assets did not satisfy the confiscation amount of R52m as they were valued at about R10m.
Ramlutchman’s defence had argued that the businessman’s assets had dropped. According to court papers, Ramlutchman said the provincial Department of Public Works received full value for the R52m paid to him.
He argued for the confiscation to be dismissed, saying in 2009 it had been discovered his registration and grading with the construction board was irregular and it had not properly qualified him for the Public Works contracts.
He said he was internally prosecuted by the construction board and received a sanction, which included a condition allowing him to continue with the projects.
Daily News