DG in KZN premier’s office granted bail in R37m tender fraud case
Details on how the chair of Mhlathuze Water blew the whistle on a R37m tender that resulted in a bogus visit from a “National Intelligence Agency” (NIA) agent and the arrest of the KwaZulu-Natal director-general (DG) played out in the Durban specialised commercial crimes court this week.
A teary Nonhlanhla Mkhize, DG in the premier’s office, was granted bail on Friday after spending four days and nights behind bars.
But her co-accused, also charged with intimidating those investigating the bulk water services company’s R37m procurement fraud matter, were not so lucky.
The suspended CEO of Mhlathuze Water, Mthokozisi Pius Duze, attorney Sithembelo Mhlanga, and Siphiwe Mabaso will only know their fate on Tuesday, with magistrate Garth Davis saying he needed to give the issue “careful consideration”. In argument, Davis was urged by senior state advocate Mlu Magwanaya to take note of the murder last year of Gauteng health department whistleblower Babita Deokaran and the need for courts to “protect witnesses”.
The charges against the four relate to allegations that they attempted to thwart an investigation into how Mhlanga’s company had been appointed to a panel of attorneys to assist the board — and got most of the work.
Duze, Mhlanga, lawyer Thabiso Khumalo and CFO Babongile Mnyandu — who was granted R60,000 bail on Tuesday — are also facing charges of fraud and corruption in that “they colluded to ensure Mhlanga Inc was appointed to the panel”, scoring R37m in just 20 months. Khumalo was released on R5,000 bail.
It is alleged Duze received R16m and Mnyandu R760,000 in “kickbacks” from Mhlanga.
During the bail application they all denied wrongdoing. But in his affidavit, Hawks investigating officer Col Ngoako Frans Mphaki said the evidence against them was “overwhelming”.
In particular, he said, Mhlanga and Duze were “hostile and dangerous” towards anyone who sought to hold them accountable for their conduct.
Duze had intimidated auditors, threatened a senior board employee by telling him he (Duze) was a “dangerous man” and had arrived at his disciplinary hearing with “men armed with AK-47s”.
Mkhize, the investigating officer said, had sent Mabaso to board chair Thabi Shange’s house to threaten her. Shange said Mkhize had told her that Mabaso was an “NIA agent”. Under duress, she had given him the only copy of a forensic report into the alleged R37m fraud.
This report then surfaced in the hands of Mhlanga, who attached it to correspondence he had with the board.
Mphaki said telephone records would prove that the four were in regular contact over the period in question.
Mkhize, in her affidavit, admitted knowing Mabaso “because he shares the same surname as my mother”.
She said Mabaso had asked her for Shange’s number and, after checking with Shange, she had given it to him. She did not know why he wanted it and she denied telling Shange he was an NIA agent.
She said she had never met Mhlanga “ever in my life” and had last communicated with Duze in 2018.
Magistrate Davis, in granting Mkhize bail of R25,000, noted she was not implicated in fraud and corruption and had played a “limited role” in the alleged intimidation.
He directed that she have no contact with board members and management at Mhlathuze Water or, in the performance of her job, deal with anything related to the water board. Mabaso, in his affidavit, says he is a debt collector. He admitted knowing Mkhize, Duze and Mhlanga and had met Shange.
He denied intimidating her or saying he was an NIA agent. Shange voluntarily gave him the report and he had later returned it to her, he said.
Mhlanga, in his affidavit, said the “high watermark” of the intimidation charge was his possession of the report, when at that time it had been “widely leaked”.
Duze, in his affidavit, said the case against him was “flimsy”— he had not spoken to Shange and was not present on the day of the alleged intimidation.
“The only evidence linking me to this is that I allegedly had cellphone communications with Mabaso shortly before and after his meeting with the chairperson. There is nothing unusual about this. We are friends.”
He denied threatening anyone or telling anyone he could be “very dangerous”.
Regarding the “armed men” who accompanied him to the disciplinary hearing, he said they had been assigned to him by the board in 2016 “for reasons entirely unconnected with this case”.