Home om­bud ad­vised to lay charges

Mail & Guardian - - News - Than­dux­olo Jika

The trou­bled Com­mu­nity Scheme Om­bud Ser­vice (CSOS) has been asked to lay fraud and at­tempted theft charges against a ser­vice provider who de­posited the agency’s R20-mil­lion sur­plus funds into an Absa ac­count un­der his own com­pany’s name.

This is ac­cord­ing to a foren­sic re­port into the

CSOS, which also rec­om­mended that the agency should re­cover R80-mil­lion that was “reck­lessly” paid into now de­funct VBS Mu­tual Bank by the same ser­vice provider, Gun­dos Pty, owned by Ral­liom Razwinane.

Ac­cord­ing to the re­port, Gun­dos Pty was not an au­tho­rised fi­nan­cial ser­vices provider, as re­quired by law.

Razwinane was one of the in­di­vid­u­als who re­ceived gra­tu­itous pay­ments “with­out any just or le­gal cause” from VBS. Ac­cord­ing to the South African Re­serve Bank’s re­port, com­piled by Terry Mo­tau SC, Razwinane re­ceived R24 224 198.

The foren­sic re­port by Knowles Hu­sain Lind­say At­tor­neys, which was pre­sented to the for­mer CSOS board last month, said the pay­ments were not au­tho­rised by the board.

The board was made aware that the Absa pay­ment was done by a third party in Au­gust last year af­ter a sub­com­mit­tee in­ves­ti­gated Absa’s in­sis­tence that it did not have an ac­count in the CSOS’S name.

Ac­cord­ing to the re­port, the R20mil­lion de­posit of the agency’s sur­plus funds, which was made in Jan­uary last year, meant that the state in­sti­tu­tion had no di­rect ac­cess to the funds.

The re­port said: “CSOS does not have a con­trac­tual right to re­ceive the cash in­vested in Absa Bank due to the fact that the in­vest­ment ac­count is not in the name of CSOS and the money is there­fore not a fi­nan­cial as­set of CSOS … The pru­dent au­thor­ity’s investigator [ad­vo­cate Mo­tau] does have the powers [as we un­der­stand it] to ac­cess those records and to de­ter­mine whether any crim­i­nal or other il­le­gal ac­tions ac­com­pa­nied the open­ing of the

Absa in­vest­ment.”

The cus­tomer was re­flected by Absa as Gundo Pty and Gundo’s ref­er­ence was re­flected as Razwinane.

“Adv Mo­tau’s team may thus very well have an in­ter­est in in­ves­ti­gat­ing how the Absa in­vest­ment ended up in an Absa ac­count held by Gundo Pty,” ac­cord­ing to the re­port.

The CSOS was set up to re­solve ad­min­is­tra­tive dis­putes in schemes such as sec­tional ti­tle and home­own­ers’ as­so­ci­a­tions. It is fi­nanced by levies paid by sec­tional ti­tle schemes, home­own­ers’ as­so­ci­a­tions and a govern­ment grant.

It was fur­ther rec­om­mended to the CSOS that the mat­ter should be re­ferred to the au­thor­i­ties for crim­i­nal charges.

“CSOS should lodge a com­plaint with the Fi­nan­cial Sec­tor Con­duct Au­thor­ity against both Gundo Pty and Mr Razwinane, and should lay crim­i­nal charges of fraud and at­tempted theft against both Gundo Pty and Razwinane in re­spect of the mat­ter with the South African Po­lice Ser­vice,” the re­port said.

A new CSOS board has been ap­pointed and will only make a de­ci­sion on the is­sue once it com­mences with it du­ties this year.

Razwinane, who has de­nied any wrong­do­ing, pre­vi­ously told the Mail & Guardian that he had not been in­vited by the CSOS or at­tor­neys to con­trib­ute to the in­ves­ti­ga­tion and that he had not re­ceived the re­port so that he could weigh up his le­gal op­tions.

Ac­cord­ing to the re­port, the CSOS’S fi­nan­cial state­ments from Au­gust 31 last year re­flected that an amount of R20612106.03 was re­ceived by the agency on Au­gust 14, and the act­ing chief fi­nan­cial of­fi­cer Nathi Dube said these were the funds from the Absa in­vest­ment.

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