Ex-eskom man ac­cused of R65m con­tract fraud

As­sets seized in High Court ac­tion

Weekend Argus (Saturday Edition) - - NEWS - FA­TIMA SCHROEDER

A WHOP­PING R65 mil­lion is the ex­tent of the fraud al­legedly com­mit­ted by a for­mer Eskom em­ployee put in charge of a pro­ject to pro­vide low-cost elec­tric­ity ser­vices in Khayelit­sha.

De­tails of the case against 59-year David Mal­herbe of Gor­don’s Bay emerged in the Western Cape High Court this week, in an ap­pli­ca­tion the As­set For­fei­ture Unit had lodged, which was heard be­hind closed doors, for an or­der to at­tach his as­sets and that of his com­pany, En­ergy Util­ity Ser­vices (EUS).

Judge James Yek­iso granted the or­der on Tues­day and, by Thurs­day morn­ing, when Mal­herbe was for­mally no­ti­fied of the or­der, mem­bers of the po­lice’s Direc­torate for Pri­or­ity Crime In­ves­ti­ga­tions ( DPCI) ar­rested him.

He ap­peared in the Bel­lville Com­mer­cial Crimes Court that morn­ing, where he was for­mally charged be­fore be­ing re­leased on R10 000 bail.

It is al­leged he and EUS de­frauded Eskom of R65m, us­ing the money to bankroll the lav­ish life­style he and his wife had.

In pa­pers be­fore the court, deputy di­rec­tor of pub­lic pros­e­cu­tions Gcobani Bam, and DPCI in­ves­ti­ga­tor Piet Viljoen said the Khayelit­sha pro­ject that Eskom had ap­pointed Mal­herbe to head was the brain­child of Eskom, French elec­tric­ity au­thor­ity Elec­tric­ité de France In­ter­na­tional SA (EDFI), and English com­pany East Mid­lands Elec­tric­ity (EME) plc. Th­ese elec­tric­ity au­thor­i­ties es­tab­lished Pham­bili Nom­bane, now known as PN En­ergy Ser­vice ( PNES), through a joint gen­eral co-op­er­a­tion ven­ture launched in 1993, and be­came its share­hold­ers.

Mal­herbe was ap­pointed as man­ag­ing di­rec­tor of PNES.

How­ever, by 2007 the French and English com­pa­nies had pulled out, leav­ing Eskom as the 100 per­cent share­holder.

The re­sult was that PNES be­came sub­ject to the pro­vi­sions of the Pub­lic Fi­nance Man­age­ment Act. It was de­cided a year later to dis­solve PNES and in­cor­po­rate its func­tions back into Eskom – a de­ci­sion Eskom’s board ap­proved to­wards the end of 2008.

It was then that Mal­herbe reg­is­tered the com­pany Bold Moves 449, with him­self as the only di­rec­tor and share­holder.

Ac­cord­ing to the court pa­pers, just a week later Mal­herbe pre­sented to the board of PNES a pro­posal that cru­cial ser­vices car­ried out as part of the Khayelit­sha pro­ject be con­tracted to his com­pany.

His pro­posal in­cluded elec­tric­ity retic­u­la­tion net­works, Eskom’s as­sets within Khayelit­sha, the man­age­ment and op­er­a­tion of the retic­u­la­tion net­work, the main­te­nance and ad­min­is­tra­tion of pre­paid vend­ing sys­tems, and the ren­der­ing of cus­tomer ser­vices and planned net­work main­te­nance ac­tiv­i­ties.

It is al­leged, how­ever, that Mal­herbe did not dis­close his in­ter­est in Bold Moves, which now goes by the name EUS. In ad­di­tion, it is al­leged that he pre­sented to the PNES board that EUS would be a broad­based black em­pow­er­ment com­pany with “ex­ter­nal share BEE em­pow­er­ment” and “limited share per em­ployee em­pow­er­ment”. Mal­herbe was how­ever its only share­holder.

In 2011, af­ter it was dis­cov­ered that Mal­herbe had an in­ter­est in the com­pany, the high court ruled that the agree­ments reached be­tween PNES and EUS were void.

Viljoen said it was ev­i­dent that Mal­herbe fraud­u­lently and un­law­fully ne­go­ti­ated the con­tracts.

An in­ves­ti­ga­tion into the fi­nan­cial af­fairs of PNES and EUS had re­vealed that, be­tween Fe­bru­ary 2009 and July 2010, PNES paid R65.1m into an EUS bank ac­count at FNB, while an ad­di­tional R242 553 was paid di­rectly to Mal­herbe.

The in­ves­ti­ga­tion also found that money was trans­ferred be­tween the EUS ac­count and a sec­ond EUS bank ac­count, Mal­herbe’s per­sonal bank ac­count, the bank ac­count of an en­tity linked to him, an Al­lan Gray Re­tire­ment An­nu­ity Fund, and his wife’s ac­count.

In ad­di­tion, R2.56m was used to buy prop­erty in Gor­don’s Bay, R1.3m to buy prop­erty in Bel­lville, and more than R400 000 was paid on his house’s bond.

Th­ese all now form the sub­ject of the re­straint or­der, to­gether with an Alan Gray in­vest­ment, re­tire­ment an­nu­ity fund in­vest­ment, a Ford ranger ve­hi­cle, and his wife’s Suzuki Jimny.

Mal­herbe is to ap­pear in court again in Septem­ber.

PIC­TURE: LEON LESTRADE

CHARGED: Evelina For­tuin and Denise Muller walk across the Grand Pa­rade as they make their way from the Cape Town Mag­is­trate’s Court, where they ap­peared, along­side three oth­ers in con­nec­tion with charges of rape, hu­man traf­fick­ing and sex­ual ex­ploita­tion of a 13-year-old girl.

PIC­TURE: CANDICE CHAP­LIN

LAV­ISH: Har­bour House, a gated com­plex in Gor­don’s Bay, is home to David Mal­herbe, who was ar­rested this week in con­nec­tion with a mul­ti­mil­lion-rand fraud case.

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