Bloated stationery tenders, payouts

Provincial Education Department officials linked to corruption

A Self-confessed Deal-maker has revealed the workings of a patronage network where highly ranked government officials earned millions in bribes and commission payouts from bloated stationery tenders.

Anesh Harilal told the Durban Specialised Commercial Crimes Court, this week, how he had negotiated with various officials from five provincial Education Departments, over the years, to fix and award tenders to Afropulse 46 (Pty) Ltd, the stationery company he represented.

Harilal, who is a former director and shareholder of Afropulse, claimed that all dealings and eventual cash payouts to officials were allegedly rubber-stamped by the company’s director.

He claimed that the rate of commission was always negotiated upfront with influential officials from the respective provinces before Afropulse tendered for work.

When Afropulse’s tender, which included the agreed commission, was overpriced, Harilal said he was shown their rivals’ quotes and got to rehash and submit a more favourable bid.

However, Harilal is among 13 accused, which includes six companies, facing a total of 260 charges comprising fraud, theft and moneylaundering allegations.

His wife Anitha is among the coaccused and is listed as the sole director of two of the companies implicated in the matter before magistrate Dawn Soomaroo.

It has been alleged that Harilal and this co-accused had worked in concert to defraud Afropulse by billing “marketing and distribution costs” at various times between 2010 and 2015.

In each instance, such service was not provided, yet Afropulse was invoiced more than R100 million in that time.

According to the charge sheet, at Afropulse’s 2015 annual general meeting, queries were raised on the increased “marketing and distribution” cost.

It was then unanimously decided that company’s auditors investigate further.

Some of the directors were also suspicious about the change in Harilal’s lifestyle and they questioned how he was able to afford various expensive vehicles and properties.

The investigations revealed that a number of large payments were made to four companies in particular on the pretext of being in lieu of marketing and distribution.

While the others pleaded not guilty to the charges they faced and contradicted Harilal’s version his legal representative advocate Jay Naidoo read out his plea.

Harilal said he joined the company as a casual labourer in 1986 when it was still known as Power Stationery and worked his way up the ranks.

Having taken up a sales position in 1993, he was required to set up links with influential people in KZN and various provinces.

He connected with one of his co-accused who worked for the company that supplied stationery to the North West Education Department.

Power Stationery began to supply that contracted company thereafter.

In the ensuing years, he was able to consolidate his links with the province and he even befriended an influential person on their tender board, who asked for a 15% commission for future work.

He explained that the commission was drawn from Power Stationery through fictitious marketing and distribution invoices and this trend continued until 2015, when the charges were brought by Afropulse.

Harilal claimed the director was aware of and approved all deals and was asked to “do whatever is necessary” to secure tenders.

He said the company had also established similar operations where bribes and commissions were paid in cash by himself to influential businessmen and government officials in Limpopo, Eastern Cape, KZN and Mpumalanga.

During 2010 and 2013, a managing agent had the KZN stationery contract but Afropulse was able to supply the appointed company after its commission offer was accepted by the incumbent’s directors.

Freedom Stationers were able to strike a deal to supply the company that won the 2013 to 2015 contract, but Afropulse got a slice of the work by agreeing to pay 20% commission to the representative of the company that won the award.

Harilal said they also teamed up with Freedom Stationers in Mpumalanga, where they were a dominant force.

Afropulse was guaranteed 30% of the work, provided they paid 20% commission of the contract value to representatives in the province that arranged work for Freedom Stationers. Elijah Mhlanga, spokesperson for the Department of Education, said they did not comment on matters in court.

Riaz Hafajee of Freedom Stationers said he heard of the developments in court but was not sure where the allegations came from.

“They seem to be wild allegations,” said Hafajee.

Afropulse attorney Anand Nepaul said the allegations were highly defamatory.

“In giving an explanation for his actions, he is trying to muddy the waters and distract the focus. My client denies the allegations as the company has more than one director.”

Nepaul said more than 90% of the money stolen from the company was under Harilal’s control.

He also raised the civil judgment that was granted in favour of Afropulse and its directors in 2017 when Anitha made a Section 163 application with the high court.

Harilal had transferred his shares in Afropulse to his wife after his tax evasion conviction in 2013.

She brought the application asking that the existing shareholders make a fair bid to take over her shares or the company be wound up.

According to the judgment, it was understood that Harilal was the true owner of the shares.

In 2015, when Afropulse directors became suspicious he had milked the marketing and delivery expense account in collaboration with other companies, this was confirmed by the forensic investigation.

Criminal charges were laid against him.

Harilal owned up to taking about R20m from the company and then agreed to sign over his shares plus an additional R10.5m to settle.

He and his wife subsequently signed documents to that effect.

However, he had a change of heart and claimed that they were threatened and forced to sign the agreement; hence they brought the application which was dismissed.

The court also ruled that apart from a donation, all the money was under Harilal’s control.

“Insanity and desperation has no bounds; wait for the trial,” said Nepaul.

“Harilal is among 13 accused, which includes six companies, facing a total of 260 charges comprising fraud, theft and moneylaundering allegations