Fraud case not over yet

The charges of fraud, money laundering and racketeering against a former director at the Gauteng department of social development (GDSD) were provisionally withdrawn yesterday in the Randburg Magistrate’s Court.

The docket was referred to the Specialised Commercial Crimes Unit for further investigation and the accused, July Maphosa, remanded on bail.

Founding member, former director and a bank signatory of Morithi Wa Sechaba (MWS), Japhta Mookang, has claimed he was fraudulently removed as a director and bank signatory because Maphosa was allegedly channelling GDSD funds meant for the poor into that account.

MWS focuses on business incubation of cooperatives and small to medium enterprises in Gauteng townships.

It is believed all the projects which fell under Maphosa – who was understood to control a budget of R800 million in the sustainable livelihoods programme – have been suspended.

Maphosa claimed his current cooperative, Khayalethu Agricultural Cooperative – sub-contracted by MWS to provide vegetables for GDSD’s food banks – has suffered losses of R2.8 million since the alleged fraud was brought to light.

Alongside the criminal investigation, the forensic unit in the provincial treasury is also looking into the allegations, GDSD spokesperson Mbangwa Xaba said.

“The treasury department outsources some of these investigations to private companies, but we are not at liberty to disclose their identity. The amount of money that has been misappropriated will be revealed when the investigation is completed,” said Xaba.

“The scope of the investigation has been widened to include more NPOs that are involved in the sustainable livelihood programme.”

Xaba warned those implicated in wrongdoing, including representatives of NPOs, government officials or former government employees, will be charged and prosecuted.

“The department is looking into alternative delivery mechanisms to ensure people who depend on the services provided by the affected NPOs are not negatively impacted,” Xaba said.

DA Gauteng shadow MEC for social development Refiloe Nt’sekhe said media reports alleged Maphosa misused thousands of rands and bought his girlfriend a car and furniture for his house, among other things.

“We need to ascertain exactly how much money was squandered by this director,” Nt’sekhe said in a statement in May.

MWS director Winston Phahlane told City Press Maphosa was asked to resign as he had been previously convicted of hijacking which he had failed to disclose to the board.

Maphosa is out on R10 000 bail.