Companies face blacklisting for alleged fraud
Shared married directors, staff, workload and remuneration
DURBAN: The five construction companies accused of tender collusion in eThekwini contracts worth more than R750 million could soon be blacklisted.
Early this month, the Cape Times’s sister newspaper The Mercury blew the lid off a KPMG investigation into suspected cover quoting between the five companies, AKRT Investments, Tauris Garden Trading 500, Mogeena Building Construction, Taset 13 and Centwise 157.
KPMG’s report on the matter, which The Mercury has seen, details how the five companies shared married directors, common staff and contact details, and shared the workload and remuneration for some of the contracts.
The eThekwini leadership broke its silence on the matter at the weekend, with new mayor Zandile Gumede vowing to deal with what promises to be her first headache since taking the reins from James Nxumalo last week.
Gumede was speaking to The Mercury on Friday. “I’ve not been the mayor, and there are issues that are dealt with at the level of mayor. All I’ll be doing is meeting the officials and asking them to give me the details so I can understand,” she said.
Gumede said there was however “no doubt” that her administration would “deal” with companies which had not complied with the city’s supply-chain management policies “and put us at a level that we aren’t happy”.
“If I get the facts, blacklisting will take place. Let me get the report, and I’ll give you a proper answer.”
The four-month investigation, commissioned by the city in January last year was completed two months later in April.
It makes damning findings against the companies, including allegations of forged signatures on tender applications and alleged false financial information submitted to boost Construction Industry Development Board gradings.
Yesterday, opposition parties were not convinced by Gumede’s position on the report. The IFP said it would give her the chance to get to grips with the details, while the DA’s provincial and eThekwini caucus leader, Zwakele Mncwango, said Gumede’s stance was “nonsense”.
It is unclear when KPMG presented the 209-page long forensic report, dated July 10, 2015, to the city. Approached for comment early this month, directors and staff of the companies said they were aware of the investigation, but had not seen the final report.
Mncwango said Gumede first needed to explain why the ANC withdrew the Municipal Public Account Committee’s (MPAC) report into the matter in December.
“She can’t just come and claim that she’ll do something now. MPAC deals with findings, and she interfered when MPAC presented the findings to council, as chairwoman of the ANC (eThekwini region). She can’t come, now that she’s the mayor, and say she’ll do something.”
Mdu Nkosi, of the IFP, said the problem was that there was no transparency in eThekwini.
“We have reasons for scepticism; the city manager doesn’t respond to queries. He doesn’t even acknowledge e-mails.
“We hope what she said in her (inaugural) speech would translate into action. What’s crippling eThekwini is that things are happening behind (closed doors), and no one knows what’s happening… We are watching her,” he said.