State Theatre ‘de­frauded of over R24m’

A dozen em­ploy­ees im­pli­cated as court grants or­der to freeze their bank ac­counts

Pretoria News - - METRO - ZELDA VEN­TER zelda.ven­[email protected]

THE STATE Theatre in Pre­to­ria had to rush to court to ob­tain an ur­gent or­der freez­ing the bank ac­counts of two of its now for­mer em­ploy­ees as well as 11 other bank ac­counts which are un­known to the man­age­ment.

This was af­ter it came to light that al­leged fraud and theft to the tune of more than R24 mil­lion had been com­mit­ted against the theatre.

It was stated in pa­pers be­fore the North Gaut­eng High Court that man­age­ment only be­came aware of the trans­ac­tions in De­cem­ber af­ter be­ing alerted by Absa that sus­pi­cious trans­ac­tions had been de­tected.

While the man­age­ment said it were shocked about this, sub­se­quent in­ves­ti­ga­tions showed that the al­leged theft and fraud had been go­ing on from at least 2014 and that more than R24m was in­volved.

The theatre’s chief ex­ec­u­tive Dr Si­bongiseni Mkhize said in an af­fi­davit be­fore court that one for­mer em­ployee im­pli­cated worked as a cred­i­tors clerk (re­spon­dent one) while the other worked in the sup­ply man­age­ment chain (re­spon­dent two)

The Pre­to­ria News has opted not to iden­tify them although their names ap­pear on court pa­pers as re­spon­dents be­cause they have not yet an­swered to the al­le­ga­tions against them.

The po­lice as well as the Hawks are in­ves­ti­gat­ing the claims of fraud and theft. Both em­ploy­ees re­signed shortly af­ter the al­le­ga­tions came to light.

Mkhize said at this stage they did not not have much in­for­ma­tion about the other bank ac­counts, but it ap­peared that money was un­law­fully trans­ferred to the bank ac­counts of the two sus­pects as well as to 11 other bank ac­counts.

The ap­pli­ca­tion to freeze these ac­counts is the first step in try­ing to re­cover the funds.

When the al­le­ga­tions first sur­faced, man­age­ment called a staff meet­ing to make them aware of the al­le­ga­tions. The next day the re­spon­dent re­signed.

Dur­ing an “exit in­ter­view” one of the two was asked whether she knew any­thing about the al­le­ga­tions. Her re­sponse was: “I have been mean­ing to tell you for a long time.”

It was stated in court pa­pers that re­spon­dent one also con­fessed to mak­ing these fraud­u­lent pay­ments and that it has been go­ing on since 2014.

She also ad­mit­ted that pay­ments were made to her­self, re­spon­dent two as well as peo­ple re­lated to them.

Char­tered ac­coun­tants were em­ployed to in­ves­ti­gate the mat­ter and they brought out a pre­lim­i­nary re­port con­firm­ing the al­leged cor­rup­tion. It was found that re­spon­dent one loaded pay­ments on the in­ter­net bank­ing ser­vice of the theatre on a once-off pay­ment ba­sis.

Her modus operandi was ap­par­ently to change the bank ac­count num­ber to which the pay­ment should be made, to an un­known third party’s bank ac­count num­ber.

In other cases it ap­peared the sup­plier doc­u­men­ta­tion was changed to re­flect the bank­ing de­tails of the sus­pected ac­counts.

At the time that the char­tered ac­coun­tants is­sued their re­port, 260 sus­pected trans­ac­tions had been iden­ti­fied span­ning across five fi­nan­cial years from 2015 to date.

The char­tered ac­coun­tants con­cluded that re­spon­dent one prob­a­bly fa­cil­i­tated the fraud-rid­den trans­ac­tions over the pe­riod of the in­ves­ti­ga­tion.

It is said that the State Theatre at this stage did not know whether apart from the ac­counts be­long­ing to its two for­mer em­ploy­ees the rest of the ac­counts be­longed to some­one or whether it was reg­is­tered un­der fic­ti­tious names.

The au­di­tors on Fe­bru­ary 20 is­sued a fi­nal re­port which also re­flected trans­ac­tions that oc­curred dur­ing De­cem­ber and Jan­uary – af­ter man­age­ment alerted staff to the al­leged fraud.

Mkhize said it was alarm­ing that five fur­ther trans­ac­tions ap­peared dur­ing this time, af­ter the staff were told about the ir­reg­u­lar­i­ties and the two re­spon­dents were con­fronted about it. As per the fi­nal re­port the to­tal amount the theatre was de­frauded of was R24 681 265.01.

It was said that to date none of these amounts were paid back.

Mkhize said the two re­spon­dents were only salaried em­ploy­ees and there was lit­tle doubt that they would not be able to re­pay the money. They would in all like­li­hood be in­sol­vent.

Judge Pierre Ra­bie, mean­while, or­dered that these bank ac­counts be frozen, pend­ing fur­ther le­gal ac­tion to be in­sti­tuted by the theatre.

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