Asset cops want R2m from law firm
As the trial of those involved in the multimillion-rand Integrated Public Transport System (IPTS) fraud case looms ever closer, the Asset Forfeiture Unit was back in court on Thursday – this time in an attempt to recoup R2m a law firm allegedly received through a corrupt relationship with a contractor.
According to National Prosecuting Authority spokesperson Tsepo Ndwalaza, the National Director of Public Prosecutions had decided to bring an application for a preservation order against Le Roux Inc because the NPA suspected the Port Elizabeth-based law firm had received a 10% fee on an invoice for a sophisticated laptop which was never delivered.
The R13m laptop, which up to today has never been seen, was believed to have been fitted with software to manage Nelson Mandela Bay’s beleaguered bus system.
Arguing in the Port Elizabeth High Court, state prosecutor advocate Warren Myburgh said although it was common cause that representatives for Le Roux Inc had approached the municipality to repay the money – money the AFU claimed was the proceeds of crime – the municipality had declined the offer.
Myburgh told judge Elna Revelas that the money did not belong to the Nelson Mandela Bay municipality but rather to the National Treasury, and that the metro was merely the custodian. The Asset Forfeiture Unit claimed the 10% commission levied on invoices to Fareed Fakir’s company, Jarami Projects, was unlawful and a deliberate flouting of supply chain management protocol.
In court, it emerged that Dawid le Roux, of Le Roux Inc, was the managing trustee for former IPTS head Mhleli Tshamase’s Mawela Trust – which indicated a possibly corrupt relationship, Myburgh contended.
“[Le Roux] is an officer of this court and is colluding in a corrupt relationship with IPTS management [and] does not disclose his interests,” he said.
It is alleged that Le Roux received a letter from Tshamase in 2013 informing him that Le Roux Inc had been appointed as chief contractor in terms of overseeing the IPTS project.
This, Myburgh said, was in itself questionable and should have raised Le Roux’s concerns as Brown, Braude and Vlok Incorporated had already been appointed by the municipality.
“When Le Roux was appointed he should have doubted the appointment from the start as he knew full well Brown, Braude and Vlok Incorporated were appointed,” Myburgh said.
By August 2015, Le Roux had resigned from the Mawela Trust and approached the municipality to repay the money.
It is alleged the instruction to include the 10% commission emanated from the office of Jarami.
Myburgh said there were gross irregularities in the contracting of Jarami and the subsequent sub-contracting of Le Roux, which according to court papers was authorised by former city manager Mpilo Mbambisa.
Although Le Roux approached the Asset Forfeiture Unit claiming he had the R2m in an investment account with Standard Bank, Myburgh said it was not clear where that money came from and the unit was only informed, through an answering affidavit, that the money was raised through loans.
Defence advocate for Le Roux, Francois van Zyl SC, said the court would have to decide if there were reasonable grounds to believe the funds in the Standard Bank account were the proceeds of crime.
Van Zyl said the investment account funds were there for surety to ensure that if the unit was successful in its application for a preservation order then Le Roux would not have to endure the consequences of a seizure of assets.
“Le Roux . . . has seen how these orders are executed, including having police storm houses, and did not want that and therefore decided to invest the money,” Van Zyl said.
Van Zyl was adamant the funds were not the proceeds of any unlawful activities and that if there was any sign of fraud it would be extremely difficult to prove. Myburgh asked the court to issue the preservation order with costs.
Ndwalaza confirmed that the forfeiture unit had asked Le Roux to pay the money into the National Treasury’s Absa Bank “where it belongs”.
Judgment has been reserved.
● The IPTS fraud and moneylaundering case against Andrea Wessels, her company Zeranza and former director of Laphum’ilanga Transport Services Mandisi Mkaza, former metro finance department assistant director Nadia Gerwel, former Access Facilities and Leisure Management chief executive Stephan Pretorius and ex-EP Rugby boss Cheeky Watson is set to begin on December 10.