The Asset Forfeiture Unit has seized assets including Ferraris, Bentleys and properties worth millions, in the high profile Free State asbestos corruption case.
The seven accused appeared at the Bloemfontein Magistrate’s Court on Friday after they were arrested by the Hawks in KZN, Gauteng and the Free State this week.
The seven accused – Nthimotse Mokhesi, a former HOD at the human settlements department, Mahlomola John Matlakala, a supply chain director, Edwin Sodi, a businessman, Sello Joseph Radebe, Kgotso Abel Manyike, a businessman, Thabane Wiseman Zulu, a former director-general for the human settlements department, and Matawana Mlamleli, the former Mangaung mayor and former human settlements MEC, were granted bail ranging from R50 000 to R500 000 bail.
The bulk of the seized assets are owned by Sodi and his company, Blackhead Consulting.
In an affidavit, an Nkosiphendule Mradla, an AFU special investigator, detailed how the seven accused, along with five companies, conspired to defraud the State of hundreds of millions through the controversial Free State asbestos project.
The AFU says the contract should have never been awarded to Blackhead Consulting and Diamond Hill Trading in a joint venture, as they were never a contracted party of the Gauteng Department of Human Settlements.
The Free State DHS had approached the Gauteng DHS to participate in a contract of the Gauteng DHS regarding the audit and assessment, handling of hazardous material removal and disposal of the asbestos project in the Free State Province.
The process was outside the normal procurement process and was unsolicited bid.
The AFU said the request was specific in that Blackhead Consulting had to be appointed to, but the Gauteng contract ended at the end of August 2014, but the Free State deal was only signed in October 1, 2014, which made the deal illegal.
The AFU contends that the Free State DHS had to then follow a competitive procurement process, but this was not done.
“Despite this advice the Free State DHS, led by Mokhesi, proceeded and appointed Blackhead Consulting and Diamond Hill in a joint venture (Blackhead Consulting JV) on 1 October 2014 to carry out the asbestos project in the Free State Province, by which period the Gauteng DHS contract had already ended,” the AFU said.
The AFU also contends that the company, along with Mastertrade, the company it subcontracted to do the work at a cost of R44 million, did not have the competencies which are required for asbestos projects, which are regulated by law.
Mastertrade subcontracted the work required by the Free State government to Ori Group for R21 million.
The Ori Group was only paid an amount of R6.3 million by Mastertrade and they never completed the work, the AFU said.
“The manipulation of the procurement process through intentional misrepresentation by the defendants to the DHS that a legal procurement process was followed, led to huge financial loss to the DHS and the State,” the investigator said in an affidavit.
In the case of Mlamleli, the former human settlements MEC, the AFU said she should have acted after the Auditor-General compiled an audit of the department’s finances and flagged the contract between it and Sodi’s Blackhead Consulting and Diamond Hill to be irregular.
At that stage, only R91 million had been unlawfully paid to Blackhead Consulting and Diamond Hill and had she acted, she could have stopped a further R139 million being paid to the entities.
“There was a duty by Mlamleli to act and stop the irregular procurement and if she did so the DHS would not have suffered a further loss of R139m and Mlamleli clearly ignored the AG’s report and further identified herself with the criminal activity that was being perpetuated through a fraudulent scheme by department officials and Sodi, Blackhead Consulting, Diamond Hill and others,” the AFU said.
“It is for this reason that Mlamleli must be held accountable for her non-action and must be accountable and take responsibility for the laundered proceeds which she had the authority to stop,” said the AFU.
In his affidavit, the investigator detailed assets valued at over R200m which were owned by the seven accused and their five co-accused companies. These assets have been seized by the AFU.
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