Durban — A senior eThekwini Municipality official has been criminally charged with fraud and corruption following an investigation by the City’s Integrity and Investigation Unit (CIIU) which found him guilty of contravening the municipality’s financial policies.
Acting on the recommendations of the City’s Financial Misconduct Board the municipality’s investigating arm, (CIIU), opened a case of fraud with the police, according to the sources within the City.
This means that the official may be asked to take a special leave of absence or be given a direct suspension by mayor Mxolisi Kaunda after presenting his charges to the executive committee (Exco).
He is expected to face these charges alongside another former official who blew the whistle on the alleged corrupt activities, as well as the service provider who had scored a multimillion-rand tender to manage street pole advertising.
Provincial police spokesperson Colonel Robert Netshiunda said the police had opened a case of fraud and corruption for investigation after two people and an entity had been accused of misrepresentation which allegedly happened between November 1, 2013 and October 3, 2019.
“It is alleged that a certain percentage of money, which was supposed to have been paid to municipality’s coffers, was channelled to the accused persons. No arrests have been made at this stage. Investigations are under way,” he said.
The charging of the official follows the Daily News’s exposé last month which revealed that he may have been illegally appointed after revelations that there was a pending disciplinary charge against him when he was appointed to the post.
The opening of the case flew in the face of the persistent denial of the report by the municipality which said there was no recommendation for disciplinary action against the senior official before being hired to the highest-paying job in the City.
A report compiled by the CIIU in 2019 – and seen by Daily News – found that the senior official was guilty of contravening the Municipal Finance Management Act (MFMA) Section 116(3), in that he entered into a Memorandum of Agreement that had amended the terms of the contract of a tender without council approval.
According to the report, for him to amend the terms of the contract agreement, he should have tabled the reasons before the council as required in terms of the MFMA’s Section 116(3) – which did not happen.
He allegedly inserted a clause that the contract was renewable which, according to the report, was not part of the tender document.
The amendment bound the municipality to renew the service provider’s contract for another three years when it expired in 2016.
The report, therefore, recommended disciplinary proceedings against him.
It is alleged that these had not been effected when he was appointed last year.
The allegations against the senior official date back to 2013 when he was the head of Development Planning, Environment and Management.
He and the unit official responsible for advertising services allegedly struck a deal with the service provider who was bidding to manage the city’s street pole advertising in 2013.
It is said that the condition was that if the pair ensured that he got the tender he would pay them R3 million.
During this time the senior official was said to have demolished his house in Cowies Hill near Pinetown and rebuilt it, allegedly with the money he had received from the service provider.
It was alleged that the service provider paid the senior official R50 000 a month for the duration of the contract.
According to the official’s evidence to the investigators, the agreement was that the service provider would transfer money to the advertising official and then forward it to him. The report said the official indeed proved that he made payments to the senior official. In his presentation, he agreed that he received payments from the advertising official but denied that it was a payment from the service provider.
He stated that it was a loan from the official to renovate his house – he saw nothing wrong asking for a loan from colleagues and friends if he ran short of cash. On how he funded the renovations to his house, he told the investigators that he used money from selling his flat in Morningside and savings from his previous work.
He said he was earning more than R2 million a year in the City and was able to finance the renovations.
The report said that when the investigating team asked for financial statements to prove that he used his savings, he refused to give bank statements from 2013 to 2015, which the team had requested.
Instead, he gave the team six bank statements only, which contained nothing to prove that he did anything wrong. The report said that since there was no criminal case laid against him with the SAPS, the investigating team could not lawfully obtain the bank statements it had requested.
The panel that recommended he be employed as City manager included then deputy mayor Philani Mavundla, DA caucus leader Thabani Mthethwa and Executive Committee member councillor Zama Sokhabase, who all distanced themselves, saying the mistake could have been done by the short-listing team responsible for vetting the candidates.
eThekwini Municipality spokesperson Lindiwe Khuzwayo said the City had no knowledge of criminal charges being laid against its senior official.
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