The Hawks Serious Corruption Offences team recently arrested
nine suspects, including two former Nelson Mandela Bay municipal officials, on
multiple charges of fraud, corruption and money laundering exceeding R56.4
million actual loss, with a potential loss of approximately R200 million.
The suspects, aged between 30 and 65 years, were warned to
hand themselves over to the Hawks this morning (Friday) and are expected to
appear in the Port Elizabeth Magistrates Court during the course of the day.
According to a statement released by the Hawks, the suspects
also include two influential community office bearers and five businesspeople.
The nine people will be charged along with six juristic people
(entities). The tenth person that was to be arrested recently passed away.
“The Metropolitan Municipality was among those selected for
a rapid bus system in 2010 and the Integrated Public Transport System (IPTS)
project was administered with funding allocated by the National Treasury. In
the same year, another project called, Implementation and Maintenance of an
Institutional Contracts Management and Administration System (ICMAS) was
undertaken,” the statement read.
“The service providers chosen for these two projects were
reportedly irregular and their prices allegedly inflated. The matter was
reported to the Hawks for investigation in September 2018 following an audit
report by the National Treasury between October 2014 and March 2017.
It is alleged that the suspects operated a syndicate with
common purpose to unlawfully circumvent the prescribed procurement processes to
benefit specific suppliers or consultants irregularly and fraudulently,” the
statement further read.
It is also alleged that influential office bearers colluded
with municipal officials and controlled decision-making in the appointments of
specific people in critical municipal posts. This was purportedly done to
influence procurement processes and the appointments of entities willing to
advance the interests of the syndicate.
The statement also mentioned that the alleged objective was
to ensure a steady stream of unlawful payments from the municipality to members
of the syndicate where the funds were distributed to other syndicate members.
“This now forms the second leg of our investigation. On the
first leg conducted in April 2017, we arrested six suspects that included two
company directors, one entity, one municipal official and one person from
Eastern Cape Province Rugby Union,” the statement concluded.
