Beaufort West Municipality implicated in fraudulent contract handover
Cape Town - The Beaufort West Municipality (BWM) skipped a tender process to fraudulently award an existing contract it had with Traffic Environment Services and Technologies (Test) to an unregistered white-owned business through the dealings of a municipal manager.
Three separate forensic investigation reports that Independent Media’s investigation unit is in possession of revealed that the contract of former Test employee Steven Jeptha’s company with the municipality to supply permanent road site equipment was to conclude in 2013. But it all ended in financial ruin two years earlier, because of the then municipal manager, Jafta Booysen.
Jeptha said Booysen had undermined Test through a sneaky relationship with its former partners, Traffic Violation Solutions (TVS), that had for years been trying to get the same contract in their name.
“The municipality gave our contract to our former partners without our knowledge and during a time of our services. It was also done without a notice period or tender process.”
Test – established in 2000 by a group of former traffic officials – were awarded their first contract with the Sol Plaatje Municipality (SPM) in 2001, before signing a service agreement with BWM.
But due to administrative issues, the SPM contract only started in 2002 as Test needed funding. This issue was later resolved when they were introduced to Darrol Robertson from Violation Enforcement Solutions (VES) who struck an agreement with them.
The two settled, with VES getting 65% of the contract’s profits for supplying all the financial support, and Test 35%, for the securing of the contract/s and the traffic expertise.
The agreement was only for the SPM and any other future contracts would be renegotiated. But Test’s agreement with VES, a joint venture company consisting of both VES and TVS, would later go into a dispute over the ownership of the contract.
“The SPM agreement was in the name of Test. TVS tried to change this as they wanted the contract in their name. The SPM refused to make the changes and VES didn't like it, said Jeptha. “VES in 2004 through one of their stakeholders, Mandy Yachad, a former South African cricketer and an executive director of Peregrine Investments, presented a new shareholders agreement for Test to contribute financially to the partnership, but Test refused to sign the agreement.”
By 2006, VES and Test’s partnership dissolved and Test had to leave with only the BWM contract. Jeptha said Test never received dividends from the agreed 35% and was informed that it went towards administrative fees. However, in 2013 when Robertson was appointed at TVS, he had withheld Test’s employees’ salaries over a contract dispute, in which the employees first had to sign an agreement that all future contracts would be acquired under the same agreement as to the SPM.
“Test were forced to sign this document or suffer the consequences of not being paid. VES at this stage charged us R1.2 million because they told us some cameras were not fully paid, which Test refuted,” he said.
Jeptha said that while dealing with VES, the contract signed with BWM in 2008 to service the 80km and 120km zones was always a good one as Test held a long-standing partnership with the municipality without any complaints.
“In 2011 Booysen misled the council by presenting to them that BWM could do with a second service provider to work in the same zones, knowing fully well that an agreement was already in place.”
By June 1, 2011, Test were invited to a meeting with then-mayor Truman Prince and Booysen, where Test was told the municipality had a buyer for their contract, who turned out to be TVS.
TVS made an offer of R1.5m at the end of June, which Test were forced to accept due to financial constraints. But at this stage, TVS, through its subsidiary the Central Karoo Traffic Systems (CKTS), had already signed a contract with the municipality.
When Booysen left the municipality, an investigation into the irregularities was requested, seeing the BWM appoint Meyer Otto Consultation Services with the legal opinion of Raubenheimers Inc.
The investigation found that Test’s contract was improperly terminated to allow the appointment of CKTS, and that Test was not in breach of the contract.
Charles Becker, TVS’s chief executive, said all three companies still existed, with only TVS servicing the Laingsburg municipality, now managed by Booysen as its new municipal manager.
Booysen's appointment and TVS's contract at Laingsburg Municipality is also being questioned after being fingered in another investigation report by PwC with the appointment of the Western Cape Government in 2018.
The report revealed Booysen and organisations related to him received gifts, donations, and sponsorship which was not declared to BWM, including deposits for projects and a weekend away at a holiday resort, all from TVS's Becker.
Becker had also deposited R3 000 into the ANC Central Karoo's bank account and sent Booysen proof of payment via email, the report revealed, in which Booysen responded to PwC that he could not give an explanation on the deposits made to the ANC as the party (ANC) had to declare it.
Plaatjies could not confirm whether or not Booysen was a member of the ANC.
BWM’s new municipal manager, Kosie Haarhoff, said he was aware that the matter was being investigated and was a big issue when he started at BWM.
When asked why Booysen had left BWM in 2016, Haarhoff said: "Booysen had resigned as he was of the opinion that the employment trust relationship was questionable."
He confirmed TVS still had a contract at BWM, awarded on July 10, 2019, for three years.
Haarhoff said the municipality had no record of Test submitting a claim for damages and did not compensate them in this regard, while Test said they did not know they could claim until after the PWC report was revealed.
Booysen was contacted at the Laingsburg Municipality. His personal assistant, who did not want to be identified said: “I spoke to Booysen who told me I cannot be used as a middle person to get through to him on this matter."
When Independent Media requested Booysen’s contact details or his lawyer’s, to get a response, as Booysen at this stage was ignoring all emails, his assistant refused to provide it.