Mystery behind R100K deposit in tender-rigging court case
Durban - How R100 000 got deposited into the personal bank account of an accused in the nearly half-a-billion-rand Durban Solid Waste (DSW) tender-rigging matter has come under scrutiny in one of the city’s biggest corruption scandals.
Former eThekwini mayor Zandile Gumede and city manager Sipho Nzuza were among those charged.
The State, on Thursday, was granted a three-month postponement so it could finalise its 350 000-page audit report that delves into the kickbacks and corruption allegations against the 17 accused.
Last week, Nedbank was subpoenaed to explain how a Durban North branch handled a cash deposit into a specific personal account, bearing in mind regulations for such transactions.
The State wanted to know how the R100 000 deposit was processed without the depositor providing personal details.
The transaction was done by a bulk teller at Nedbank’s La Lucia branch in Durban during December 2017, without the depositor providing their name, ID number or mobile phone number.
According to the Financial Intelligence Centre Act (Fica) of 2001, accountable institutions are required to keep a record of every transaction it handles so it could be readily reconstructed.
Keeping records of parties to transactions is another requirement emphasised in the Act.
What piqued the team’s curiosity further was other branches of Nedbank, in five separate instances, some before and after the R100 000 cash deposit was made, required the depositor’s personal details even though the cash deposits on each occasion was far smaller.
Durban Regional Court magistrate Shaun Carslow presided over the matter, and prosecution was led by advocate Ashika Lucken.
Nedbank was first subpoenaed in March to provide information on the transaction but its response was not to the team’s satisfaction.
Therefore, a Section 205 subpoena was then made on August 21 to compel Nedbank to provide the details required.
The specific information that Lucken and her team required was the name, ID number and mobile number of the person who made the R100 000 deposit.
Fazeela Cassim, who was the La Lucia branch manager at the time of the deposit, explained in court how tellers usually handled cash deposits. Advocate Paul Jorgensen represented the bank.
Cassim said personal information was requested from depositors only when their electronic managing system (Verifone) prompted the teller to do so, to complete deposits into personal bank accounts.
When the R100 000 was deposited, Cassim said its system did not prompt the teller to request personal details from the depositor.
The magistrate said he had no reason to dispute Cassim’s evidence and that it was Nedbank’s policy in only some circumstances to request certain information, as a result the matter could proceed no further.
He also told the State that if it had issues with Nedbank’s policies and its compliance with the Fica requirements, it must “take it up with the High Court”.
During proceedings, Jorgensen said that Nedbank complied with the Fica.
At the outset of the hearing, Jorgensen informed Carslow that the State did not attach the affidavit relevant to their criminal investigation, for which the information was required.
Lucken responded that the affidavit was “only for the eyes” of the magistrate who presided over the criminal investigation.
“We are withholding the affidavit to protect the integrity of the ongoing investigation. We are unable to say whether bank officials would disseminate the information to others if it were attached.”
She confirmed that the inquiry was related to a current criminal investigation and if Nedbank was insistent on seeing the related affidavit, it was welcome to approach the High Court.
Lucken told the court that when the team didn’t receive information it asked for initially, even after the “audit roll” was scrutinised, the team made the second subpoena application.
Cassim said the bank attempted a deeper search but was unable to find the required details.
“The audit roll is our blueprint of transactions for the day. There was no deposit slip for the transaction. If it was available, it would have been provided. The deposit was done in cash, over the counter, by a third party.”
She also said that deposits were only processed once the depositor was satisfied that funds were being directed to the right account and then pressed the “1” key on the Verifone system to complete the transaction.
On whether the transaction warranted a manual deposit slip, Cassim said it was not a prerequisite on personal accounts, unless the system prompted, but certainly for corporate accounts.
She said on large cash deposits into personal accounts, tellers were trained to ask for the depositor’s details. When Lucken asked what she deemed a “large deposit”, Cassim said R500 000 and above.
About why other branches required the depositor’s details for lesser amounts, she said she could not account for other branches.
Questions were sent to Nedbank this week for clarity on its cash deposit policy, including whether its deposits policy varied from branch to branch. Anna Isaac, group chief compliance officer, said: “Nedbank is not required, in terms of its Fica obligations, to acquire or retain details of third party depositors depositing cash into clients’ accounts. Deposits can even be made at ATMS.
“Our Fica obligations relate to Nedbank’s relationship with its clients. To the extent that any third party deposits into clients’ accounts trigger reporting obligations on the part of Nedbank, in light of the clients’ receipt of the funds, such reporting obligations are complied with.
“As this is part of a criminal investigation, out of respect for the prosecuting authorities, Nedbank is unable to provide further details.”