Sipho Shabalala, head of embattled KwaZulu-Natal development bank Ithala, is being investigated by police for allegedly soliciting a R1 million "donation" for the ANC that was linked to a R44.5 million state tender and channelled through a Durban law firm.
The probe - confirmed by the SAPS Commercial Crimes Division and policemen seconded to the elite Hawks unit - is outlined in information in the possession of The Sunday Tribune.
It is alluded to in an extract from what appears to be an affidavit submitted by a police superintendent in an application for a search warrant.
The policeman says in the document that the SAPS is investigating fraud and/or corruption and money laundering.
The case involves a flamboyant, politically connected South American businessman, Gaston Savoi, who is based in Cape Town.
KZN Commercial Crimes Division head Director André Lategan refused to divulge details of the case, but confirmed the probe.
"The investigation is being finalised. That is all I can say," he said.
Shabalala, through his attorney John Wills, who also acts for the ANC, emphatically denied any wrongdoing.
Wills said Shabalala was aware of the investigation and should he be approached by the SAPS, he would "respond accordingly".
The investigation has a case number dated January 2009, but relates to events in 2007 when Savoi's technology company, Intaka Tech, received the R44.5 million tender to supply water purification plants to the KwaZulu-Natal Department of Health.
Intaka, according to the company's website, counts ANC cabinet minister Tokyo Sexwale's group Mvelaphanda Holdings as a joint venture partner.
According to the document, Savoi made a complaint to the police, alleging that after the government expressed an interest in his water purification plants, Shabalala (who was then head of the provincial government treasury) was brought into the negotiations to procure Intaka's equipment.
"In the initial stages when Savoi met Shabalala, Shabalala raised the question of a donation to the party, which Savoi understood to be the ANC.
"Savoi did not pursue the matter at the time," the document states. "When Intaka finally received payment (from the KZN government) Savoi asked Shabalala about the issue of a donation.
"Shabalala informed Savoi that Intaka would be sent an invoice against which he should make a payment." The document said Savoi received an invoice from a Durban firm of attorneys for an amount of R1 053 000 and that this was paid by Intaka.
The invoice said the legal firm claimed the money for work done with regard to "taking instructions, telephone calls, correspondence, drafting of contracts, consultations, attending meetings, drafting legal opinions and miscellaneous attendances for the period 2003 to 2006".
However, the document says, Savoi "confirms that no legal services as referred to in the invoice were ever rendered to Intaka".
The superintendent investigating the case said in the document that the invoice appeared to have been falsely generated to cover a donation to the ANC.
He alleges the money was transferred to the Durban law firm and that fraud was committed, as Intaka was not permitted to receive, file and pay the invoice.
"I suspect the payment was directly linked to the transaction of R44.5 million, for assistance rendered by Shabalala."
The superintendent says it is his suspicion that the trust account of the Durban law firm was used to launder money intended for a third party. He said the trust account had already been subpoenaed, which confirmed the payment by Intaka.
He sought the search warrant to reconcile the accounts of the law firm and to see whether the money was paid to the ANC.
The Sunday Tribune has established that the law firm in question has subsequently been sold and now bears a different name. The newspaper has been unable to contact the previous partners.
Yesterday Savoi, through his lawyers, confirmed he had made a donation to the ANC and said, "Intaka has co-operated fully with the SAPS investigation and provided the SAPS with a comprehensive statement that deals with all the material facts".
ANC provincial spokeswoman Nomfundo Mcetywa had not responded to Tribune inquiries by the time of going to press.
Attorney John Wills issued the following statement on behalf of Shabalala:
"Our client denies any wrongdoing of whatever nature. While he has had discussions with Savoi, such have been completely above board and within the bounds of the law.
"Our client is aware that the matters you raise are being investigated by the police. The police have not approached him and should they do so he will respond accordingly.
"Our client, being a member of the ANC, is not in a position to respond to the issues of donations and refers you to the ANC provincial secretary in this regard."
The Intaka group of companies is a supplier of water purification plants and medical oxygen systems across southern Africa. The KZN government is an Intaka client.
During 2005, Intaka received an order from the provincial government for 20 water purification plants at a cost of R44.5 million.
By June 2009, 12 of the water purification plants had been installed. Intaka is installing the remainder after a delay caused by logistical challenges.
Intaka has provided the South African Police Service with a comprehensive statement that deals with all the material facts.
Intaka is astounded that the contents of the statement have been provided to the press. It is inappropriate for such a statement to be disclosed while an investigation is ongoing.
The information contained in the statement is confidential and Intaka is not prepared to comment further on the contents.
Intaka did not do anything wrong. Its co-operation with the police is testimony thereof. It does not require indemnity from prosecution and has not asked for this.
Intaka made a donation to the ANC, as has happened in other instances. All its donations have been properly audited.
Intaka is not aware of how this particular donation was reflected in the ANC's books of account.