KZN man a kingpin in Free State asbestos tender scam, State alleges
Durban - A former government official with strong KZN attachments was a central figure in the R255 million Free State asbestos tender corruption matter, which includes Ace Magashule, the ANC’s Secretary-General, as an accused.
That was the allegation made by the State in the indictment handed to the 16 accused in the matter at the Bloemfontein Magistrate’s Court on Friday.
For Thabane Wiseman Zulu’s influence, the owner of a company that benefited from the asbestos contract allegedly paid R600 000, late in 2015, towards his purchase of a Range Rover from a Ballito dealership.
It is believed that Zulu, who was represented by Durban-based advocate Paul Jorgenson on Friday, also received an undue R1m gratuity in May 2015.
The State alleged that Edwin Sodi was responsible for both payments, which was a show of appreciation for Zulu’s influence in his company, Blackhead Consulting (Pty) Ltd, scoring on the asbestos tender.
The tender in question was a joint-venture between Sodi’s Gauteng-based engineering consulting firm (Blackhead) and Igo Mpambani’s Diamond Hill Trading 71.
Zulu was a director-general with the Human Settlements Department at the time the entity awarded the R255m contract.
Other prominent positions Zulu previously held include Msunduzi municipal manager and director-general with the Department of Energy.
He was appointed chief executive of the Richards Bay Industrial Development in June.
In August Zulu also appeared before the Commission of Inquiry into Allegations of State Capture, which is being chaired by Deputy Chief Justice Raymond Zondo.
He denied deriving any benefits from the asbestos contract and said that the money Sodi paid the dealership was in lieu of an amount owed to him.
Zulu explained that Sodi had used the services of his Pietermaritzburg events company and asked him to pay the dealership instead.
Sodi had also appeared before the commission in September 2020 regarding his involvement in the asbestos matter, and on October 1, he and six other accused in the matter were arrested.
Olly Mlamleli, Mangaung’s former mayor and Nthimoste Mokhesi, the province’s former human settlements’ head of department were among those arrested.
Magashule was arrested on November 13, and during Friday’s court sitting, State prosecutor Johan de Nysschen said that the number of accused in the matter had grown to 16 after three more arrests.
Albertus Venter, who is the legal department head in the Office of the Free State premier, was accused number 16.
All the accused in this matter were granted bail of varying amounts after their respective arrests.
They faced collective charges for fraud, corruption and money laundering.
Mokhesi, who is listed as “Accused Number 1” rubber-stamped Sodi’s and Mpambani’s joint bid for the eradication of asbestos in the province on October 1, 2014, and the contract amount was R255m.
They received an advance payment of R51m.
Sodi and Mpambani, who was the sole director of Diamond Hill, subcontracted the work to Sello Radebe and his company Mastertrade 232 (Pty) Ltd for nearly R45m.
Radebe then subcontracted the work to Abel Manyeki and his company, Ori Group (Pty) Ltd for around R22m
All the implicated directors and their companies are accused in the matter, apart from Mpambani only.
He was shot and killed in 2017.
Mahlomola Matlakala, a supply chain management director at Free State’s human settlements department, Nozipho Moliko, a chief financial officer in the same department and Thabiso Makepe a chief engineer, were the other government officials listed as accused.
The State alleged that eight of the accused, who were all government officials, ignored the Public Finance Management Act, Treasury Regulations and sections of the Constitution in their handling of the asbestos tender.
They claimed that the officials pretended as if proper processes were followed in making the award to Sodi and Mpambani’s joint-venture, they had no personal or financial interest in the award, monies paid were proper.
They also acted as if it was permissible for the original contract to be subcontracted and again, subcontracted thereafter, without any disclosure, and that the rates charged were not inflated.
The auditor-general red-flagged the awarding of the contract in July 2015 and the DA immediately responded with a High Court application, which called for all payments to be halted on the contract.
But a further R139m was paid to the joint venture holders.
Therefore, the State labelled the award “illegal” and “irregular”
Apart from being implicated in the eight fraud charges, Magashule has five corruption charges to his name.
They relate to him allegedly receiving and accepting R53 550, on his request for his daughter’s tuition fees, which was made by Mpambani. The State viewed that as an abuse of authority, breach of trust and violation of a legal duty because they believe that Magashule was aware that the awarding of the asbestos contract was improper.
The State held the same view on Magashule agreeing to the R470 000 paid to M-Tag Systems for 200 electronic tablets, the R200 000 and R100 000 paid respectively to Griffin Edge (Pty) Ltd, for 200 tablets, the R30 000 handed to SWC Nkate and R250 000 to Astra Travel.
The travel cost was for a delegation heading to Cuba.
All of which was paid by Mpambani.
The 50 counts of money laundering related to movement of money between the accused and their businesses in question.
The matter was adjourned to August.
Due to lockdown protocols, Magashule was unable to address the thousands of supporters who gathered near the courthouse.
However, in a press conference later, Magashule said he looked forward to the trail and insisted, “I have done nothing wrong…”