Cape Town - The eight people arrested in connection with tender fraud in the construction sector – which includes officials in the DA-led City of Cape Town and directors at local business Ilitha Painters and Decorators, trading as The Construction Co – are said to be small fry, with “more arrests to come”.
Police confirmed on Thursday that eight warrants of arrest were executed in connection with alleged corrupt activities involving tender fraud in the construction sector within the City.
More arrests were imminent, warned police spokesperson Novela Potelwa.
“The staggered arrests, which started from early morning on Thursday at various locations in Cape Town are the culmination of protracted investigations into complaints of fraud and corruption that entails the inflation of invoices, irregular payments of service providers for construction work not undertaken and other illicit activities,” said Potelwa.
The eight accused appeared in the Cape Town Magistrate’s Court on charges relating to fraud and corruption.
“As the investigation continues more arrests are imminent. Further details about the case and the unfolding investigations are expected to emerge from court,” said Potelwa.
This development came after Cape Coloured Congress (CCC) leader Fadiel Adams, joined by anti-crime activist Hanif Loonat, pursued criminal charges against City officials for money laundering, fraud and corruption, and defeating the ends of justice.
The CCC said: “The chief audit executive was highlighted to the fraud and corruption by a victim in this case and he has refused to engage after having found out (about) the alleged fraud and corruption.
“He has hidden behind the veil of the forensic department, instead of conducting a detailed internal audit of the allegations that he was aware of. He failed to inform the auditor-general of these allegations and the value of the alleged fraud, which the CoCT forensic department admits to be in excess of R300m. He, in turn, allowed false reporting and aided and abetted the corruption to continue when his department is mandated to act appropriately when information of alleged fraud and corruption is raised to them, with prima facie evidence.”
Responding to the CCC’s statement, in which they highlighted at least three tenders awarded to The Construction Co for “issuance of works packages”, “building works” and “roof repairs”, the City said it noted the allegations.
It said, however, that there were a number of inaccuracies in the CCC statement.
“There have been no delays in the City of Cape Town’s investigative, legal and labour processes. It is important to note that these processes must be thoroughly undertaken, so that both the legal and labour conditions can be assessed and appropriately dealt with.
The City has a zero-tolerance approach to corruption and fraud, and respects all due process.
“The investigation into the allegations has been finalised and the final report and its findings are being studied.
Labour relations is being consulted on the findings and City will respond decisively where required,” the City said.
Disciplinary charges were laid against the officials in question, and one of them has since resigned, said the City.
Executive director at The Construction Co, Asif Khan, said: “We will again co-operate fully with the legal proceedings. We remain confident that it will again be shown that the allegations levelled against us are baseless.”
Adams said: “When I raised the issue of over R700 million of irregular expenditure in the City, the DA laughed at me. Well, the chickens have come home to roost.
I called officials by their names because the evidence was there for all to see ... Nothing else can explain why high-ranking officials in the City tried to stall us for three years.
This is not today’s fight. “I feel vindicated because they stopped short of calling me a mad man and here the chickens come home to roost.”
Loonat said the alleged fraudulent transactions and tender awards “amount to more than R500m”. “If the City was serious about fighting corruption, they would have assisted me with information relating to the fraud and corruption.
I have been blocked by heads of department and up to the city manager but they did everything to derail our investigation, telling me there was nothing there.
“There are ... more of such cases. I was not going to lie down. This is about the poor people who are deprived of funding – this is taxpayers’ money.
“While we may not be able to stop (corruption), we must hold them accountable. We are losing billions to corruption in this country.
This is a drop in the ocean but it’s a start. This is just the tip of the iceberg,” said Loonat.