The Special Investigating Unit (SIU) has warned that it would not hesitate to go after directors of liquidated companies, that were found to have acted in a corrupt manner and irregularly scored government contracts at the start of the Covid-19 pandemic.
SIU head advocate Andy Mothibi told the Portfolio Committee on Human Settlements that, in most cases, contractors found guilty of such irregularities liquidate their companies, indicating that they probably don’t have assets for the SIU to recover.
“We will find the directors of those companies and try to recover from the directors themselves. You will sometimes find a company has been liquidated, but the same directors creep up in another company. There is even a legal process where we can apply for those directors to be deemed delinquent,” Mothibi said.
The SIU was briefing the committee on the status of some of the housing matters it investigated.
In the Limpopo case, where six people accused of corruption in the R15.3m Talana shacks scandal, including the owner of Aventino Group CC, the matter is expected back in court next month for trial.
Businesswoman Constance Mohlala, Raymond Makoto Nkwane, Thobamotse Jeremiah Makofane, Simphiwe Nolwethemba Maphisa, Tsokollo Pacanin Monareng and Lerato Pearl Dikhutso, who each face three counts of fraud, corruption and forgery, allegedly claimed the amount of more than R2 million out of R15 million that was supposed to be used for building the 192 shacks and 53 toilets, at Talana, near Tzaneen.
The SIU found that the tender for the construction of Limpopo's most expensive shacks was fraudulently obtained.
The SIU probe revealed that the appointed service provider, Aventino Group CC, made misrepresentations and forged documents of industry experts, with no links to the company, to influence the direction of the bid.
The SIU also recommended that disciplinary action be taken against all members of the Bid Adjudication Committee and Bid Evaluation Committee, for their failure to conduct due diligence.
In the Eastern Cape, the SIU investigated four service providers, who were awarded a R300m tender to erect 1 800 temporary housing structures in response to the Covid-19 pandemic.
The SIU found that the provincial Human Settlements Department deviated from the normal processes and awarded the six-month contracts. They further extended the contracts by another five months. Investigations revealed that only 346 units, out of 1 800, were actually built. The SIU were now busy with the preparation of the matter for civil litigation. The review application is expected to be finalised by the end of June.
Another investigation in the Eastern Cape revealed how one company scored a R75m contract to urgently build 1 174 housing units, in Duncan Village, in East London. A year later, and less than 486 units have been constructed. Three months later, the contract was extended to include construction of services, at an extra R86m. The SIU found that the extension was irregular. It further found that the Housing Development Agency appointed consulting engineers to oversee the project, at a cost of R26m.
The SIU are now looking to potentially recover R112m, while the NPA referrals should be finalised by next week.
Mothibi said that almost all matters presented to the committee related to procurement irregularities found in contracts obtained, when the country was under the state of disaster and were trying to mitigate the effects of the Covid-19 pandemic.
“We found complete disregard of processes and, in some cases, irregularities – pointing directly to intended corruption. We found companies applying a mark-up of about 833%, which is really unacceptable. There were misrepresentations of CVs and so forth,” he said.
The committee said they were happy with the SIU’s presentation and were looking forward to seeing more of the cases finalised, and reaching the courts soon.