George municipality faces fraud probe over R350m investment

A CASE of fraud has been opened against the George municipality after it was discovered that there were irregularities linked to a R350 million investment.

The investment was made with Old Mutual more than three years ago.

Last Friday municipal council members opened a case with the local police.

Captain Malcolm Pojie said: “Pending further investigation the matter will be submitted to the NPA for scrutiny and to determine whether anyone should be charged or not.”

It was reported that as a result of the irregularities then-municipal chief financial officer Keith Jordaan was suspended over alleged corruption.

The investment was made with Old Mutual, where a councillor’s son was employed. The son received commission because he facilitated the deal.

SACP Southern Cape district secretary Langa Langa said: “After finding out that the investment was done at Old Mutual, we started asking ourselves questions because Old Mutual is not a bank or an investment company, but then it made sense because a son of one of the councillors worked for the institution and was on the forefront of the deal.”

ANC chief whip Nomawethu Jantjies-Gushman said they questioned the investment the same year it was made but they were not getting any answers from the council speaker.

She said after numerous cries to the council and the MEC for Local Government, Environmental Affairs and Development Planning Anton Bredell they never received any satisfactory answers on how the matter was handled.

She added that only the CFO was fired and nothing was allegedly done about the councillor.

Spokesperson for the municipality, Chantèl Edwards-Klose, said the municipality makes short-term investments with registered banks.

“In 2017, an amount of R350m was invested on a short-term basis with Old Mutual and repaid to the municipality at the end of the term, a councillor’s son earned a referral fee on the investment.”

She said following an internal disciplinary process instituted under the code of conduct for councillors, a finding was made that the councillor had breached the code of conduct.

Old Mutual spokesperson Tabby Tsengiwe said they view any allegations of financial misconduct in a serious light.

“We can confirm that we were approached by FTI Consulting, which had been mandated by George Municipality to investigate allegations of misconduct by its chief financial officer.

“Old Mutual co-operated fully with the investigation and shared all relevant documentation with FTI Consulting in the interests of transparency,” said Tsengiwe.

Tsengiwe said they honoured all of their contractual obligations towards the municipality insofar as the specific investment mandates are concerned and there are currently no funds managed by Old Mutual on behalf of the George Municipality.

Attempts to contact Jordaan proved futile.