IPTS lawyers want to pay back the money
Bay firm to return R2m it earned as Treasury probe intensifies
LE ROUX Inc attorneys, a Nelson Mandela Bay legal firm that benefited from contracts with the metro’s failed bus system, has offered to pay back R2-million to the city’s coffers.
The firm has also distanced itself from Jarami Projects, the company owned by businessman and ANC funder Fareed Fakir, for which it processed invoices billing the city for IPTS work.
This offer comes as the national Treasury’s large-scale investigation is said to be closing in on those responsible for squandering millions of rands meant for the metro’s bus system.
Former IPTS head Mhleli Tshamase quit last month before he could be suspended by the municipality.
The Herald has previously reported on how Tshamase, through a deviation process, spent about R487-million between July 2013 and June last year on Integrated Public Transport System (IPTS)related work by companies he handpicked without a single contract going out to tender.
Le Roux Inc processed payments on behalf of Jarami Projects totalling more than R20-million.
It is unclear what prompted the firm to make the offer, but municipal insiders say as one of the companies that did work for the IPTS, it was mentioned in the Treasury’s investigation report.
The Treasury has been probing the controversial bus system since January, looking into how R2-billion of taxpayers’ money pumped into the IPTS had been spent.
City manager Mpilo Mbambisa read out Le Roux’s letter in a full, confidential council meeting on Thursday.
In the letter, Le Roux Inc also offers to assist the Treasury with its investigation by providing any information or files in its possession.
The letter was not given out to councillors as city bosses wanted to avoid it being leaked to the media.
Insiders said the letter was also sent to auditing firm Deloitte, which is conducting the probe, as well as the National Prosecuting Authority. In the letter, Le Roux Inc offers to pay R2 049 938 to the city. The amount is equal to the 10% fee the company received for processing invoices for Jarami.
On Friday, Le Roux Inc’s legal representative, Lunen Meyer of Roelofse Meyer Inc, confirmed that the firm had offered to pay R2 049 938 to the city, and that it was in negotiations with the municipality’s legal team. Meyer said Le Roux
Inc did not have a professional relationship with Jarami Projects.
“As our client is a long-standing service provider of the municipality, it does not want to be the cause of any controversy for the municipality or be the subject of any controversy, which would also impact negatively on the municipality,” Meyer wrote further.
“Accordingly, our client does not wish to be associated in any way with Jarami Projects CC or to derive any benefit from its services rendered to the municipality.
“Hence the tender of repayment, which has been made in good faith because our client feels it is the correct thing to do in the circumstances, but without admission of any wrongdoing on the part of our client.”
Mayor Danny Jordaan said previously that the highly anticipated Treasury report was expected at the end of last month.
Councillors who attended the meeting said that in the letter, a director of Le Roux Inc – Abraham le Roux – had also explained that his partner, David le Roux, had resigned from Mawela Trust.
The trust was founded by Tshamase and his wife, the only two trustees, while David le Roux was included as an independent trustee.
While the purpose of the trust is unclear, The Herald can reveal that a R3.7-million mansion being built in Theescombe is registered to the trust.
Meyer said David le Roux had resigned from the trust on June 15.
“He resigned due to concerns he had . . . that the other trustees . . . failed to advise him as to the activities of the trust to which he had not been a party,” Meyer said.
Mbambisa said a letter from Le Roux Inc was read out in the council, but was not discussed.
“For now, we haven’t yet received the final report from the Treasury investigation and this matter forms part of that investigation,” he said.
“Therefore, it would be premature now to talk about things forming part of the investigation.”