Fisheries probe finds ‘corruption and fraud’

A FORENSIC investigation into Smit Amandla Marine’s management of the state’s marine vessels has revealed “widespread complicity and corruption” among government officials, and multibillion-rand defrauding of the government, the Department of Agriculture, Forestry and Fisheries announced yesterday.

The forensic investigation, conducted by Ernst & Young, was commissioned by the department to probe tender processes at its fisheries branch. Smit companies have had the contract to manage the state’s marine vessels since 2000.

The investigation found that documents had been moved to a warehouse in Paarden Eiland, apparently to hide evidence, said the department.

But Smit Amandla Marine’s director, Sithembiso Mthethwa, yesterday dismissed “these outrageous allegations”. “[We] note with dismay that after more than six months, Smit Amandla Marine has not been approached by either the Department of Agriculture, Forestry and Fisheries or any investigating body to respond to these allegations, despite numerous requests for dialogue.

“Once again, we call for a formal process to defend Smit Amandla Marine and to clear our name, and

we reiterate our company’s willingness to participate in an open and transparent investigation into our business practices,” Mthethwa said.

The department yesterday said the investigation had shown the agreement between fisheries and Smit in 2005 to manage the vessels, and later extensions to the agreement, had failed to comply with tender board regulations, with procurement policies, National Treasury and income tax regulations and the Public Finance Management Act.

A contract worth millions had been extended by a letter. Contracts signed in 2000, 2005 and 2010, amounting to between R1.6bn and R2bn, were irregular and drafted to have maximum benefit for Smit, the department said.

The vessels include the fisheries research vessels and offshore patrol vessels. Smit lost the tender to manage the vessels last year.

The department said there was “substantial evidence of defrauding of the state”. Evidence against Smit and officials in the Department of Environment Affairs and the Department of Agriculture, Forestry and Fisheries was “overwhelming, indicating widespread complicity, corruption and deliberate entering of contracts unfavourable to the state”, the department said.

It said the state had been defrauded of about R1.6bn through duplicate payments and invoices without tax or VAT.

The investigation found that “parties associated with Smit” had moved documents to a warehouse to prevent the department and investigators from finding evidence. With law enforcement agents, the investigators were able to prevent the destruction of “valuable data and contracts from government computers”.

In some cases the department said the state had been billed for tens of millions of rand at a time when there was no evidence of Smit having provided any service to the state.

“There are instances where monies owing by Smit Amandla Marine to the state have been deliberately withheld with the assistance of complicit state officials in the Fisheries Branch,” the department said.

The former Department of Environmental Affairs and Tourism had entered into the contract with Pentow Marine and Smit Marine, but there appeared to be no valid agreement between that department and Smit.

The Department of Agriculture, Forestry and Fisheries took over the contract in 2011.

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