Plump blue line: Firms owned by one family allegedly secured contracts by manipulating police procurement systems. (Marco Longari/AFP)
The state is gunning for a family that allegedly milked the South African Police Service (SAPS) of R100-million with the alleged assistance of 23 “captured” senior officers and 26 “fraudulent” companies.
National Prosecuting Authority (NPA) investigative reports place 28-year-old Kishane Chetty and his father, Krishna Chetty, 64, as the heads of an alleged syndicate.
The state alleges that the duo secured more than 50 fraudulent contracts with the national SAPS, from April 2016 to July 2020.
In total, there are 71 accused: 45 people and 26 companies.
Even though the various companies are registered in the names of other people, the prosecuting authority alleges that Kishane Chetty is, in practice, the “beneficial owner” of all 26 companies, because he had signing powers and sole access to the firms’ internet banking facilities.
The web the enterprise created
The investigative documents, which the Mail & Guardian has seen, state that the Chetty family registered companies in the names of friends, employees and relatives to supply a range of products and services to the SAPS, with each contract valued at less than R500 000.
Investigators believe that the Chetty family intentionally kept their invoices under R500 000 to circumvent treasury regulations, which require quotes from three different companies for procurement exceeding R10 000, but not higher than R500 000. Contracts for more than R500 000 must be put out to tender.
Among other items and services, the companies supplied stationery, forklifts, the marking of police vehicles, air conditioning, furniture, telephones, voice recorders and personal protective equipment, as well as the sale, repairs and maintenance of electronics and mechanics.
The NPA documents form part of the first leg of the crackdown on the Chetty family and their alleged crooked cops, with sources close to the probe telling the M&G that the Chettys supposedly squeezed the SAPS for almost R1-billion.
The accused, the first 15 of whom were arrested in June last year, are all out on bail. Each intends to plead not guilty to more than 75 charges of fraud, money laundering, theft, corruption and forgery. The accused asserted they would show the state had a weak case against them.
Enter the cops
This week, Lieutenant-Colonel Jane Mthembu, who is stationed at the Silverton police station, became accused number 45 in the matter. She appeared in the Pretoria magistrate’s court, where she was released on R5 000 bail.
Mthembu is accused of flouting legislation and SAPS regulations to enable the Chetty family to receive contracts with the Silverton station.
Investigators said the alleged plot was aided by high-ranking officers in the SAPS supply-chain management department, which is accused of rigging procurement laws to benefit the Chettys.
Sources said the state would reveal how much each police officer profited in the alleged scam at the end of the investigation.
The investigative report also outlined how officers would always outsource services to Chetty firms, regardless of whether there were any in-house employees who could perform the services required.
“Whenever there was work to be outsourced to a company outside the SAPS, companies belonging to the Chetty family would be invited to submit written price quotations. The result of inviting companies owned by the same person or persons is that a false impression that the procurement process was fair is created,” wrote the investigators. “The state is thereby denied the opportunity to get the best service at the lowest or best price.”
“In their written price quotations, the Chetty companies would attach fraudulent BBBEE [broad-based black economic empowerment] certificates and make representations with regard to profit margins, and also fail to disclose having done business with the state in the 12 months that preceded the dates on which the written price quotations were submitted.”
An example of the alleged elaborate scheme, contained in an NPA internal note, related to the April 2017 contract for the marking of 120 Western Cape police vehicles. Three of the Chettys’ companies — Vatika, Mpapadi and Blue Voice — submitted the only quotes received in a “competitive bid”, ending with an initial R486 000 contract for Vatika for the Western Cape.
Vatika ended up receiving R85-million in contracts to mark and un-mark police vehicles in all nine provinces.
Investigators found the company had misrepresented itself as a 100% black female-owned company, and that its sole director was in fact a white woman, Lorette Joubert. Joubert is the first accused; her daughter, Maricha Joubert, is the second.
Their company is accused of subcontracting the marking work to a company called Sharpline, which, the state said, was unaware it was being used in the alleged fraud.
“Vatika did not have the skills to mark SAPS motor vehicles. They then subcontracted the work to the company [Sharpline] that did the work before Lieutenant-General [Ramahlapi] Mokwena [accused number seven] issued an instruction that the marking of SAPS vehicles be stopped until he put a contract in place,” read the documents.
(John McCann/M&G)
Bonanza after arrests
Payments were made to Vatika by SAPS before Sharpline did the work. “Sharpline was unaware that it was used to defraud the SAPS,” reads an NPA report.
The prosecutors add that Vatika’s prices were inflated: Sharpline was charging the SAPS about R2 500 to mark one motor vehicle; whereas Vatika charged more than R9 000 per vehicle.
Kineil Muthray, legal representative for the Chettys and Joubert, said that, while the state believed it had a strong case, his clients “certainly maintain their innocence”.
“There is much to be told of this matter [. . . but] to avoid any prejudice to my clients, I am not able to divulge any more detail.”
So brazen was this alleged scam, the NPA contends, that Kishane Chetty, through his entity, Imbobezi Enterprises, accused number 58, received more than R4.1-million to supply 165 096 KN95 masks to the SAPS in August last year — two months after he and his father had made their first court appearance at the Pretoria magistrate’s court.
“The procurement file contains no records of the masks being delivered. The prices charged for the goods were highly inflated. No invoice was found in the procurement file,” reads another NPA document.
Forty-five people and 26 companies will return to the Pretoria magistrate’s court in March when the state is expected to have finalised its investigations and apply for a court date.
[/membership]