A forensic investigation into the extraordinary multimillion-rand tender awarded by a subsidiary of the North West government to companies associated with ANC spokesperson Pule Mabe has found traces of fraud.
The report by independent forensic investigators commissioned by the North West Development Corporation (NWDC) relating to its contract with Mvest Trust has described the authorisation of a R49-million payment to the trust as “seemingly fraudulent”.
The report, which was presented to the corporation’s board of directors this week, claims that both the former acting chief executive officer (CEO) Mike Mthimunye, who signed off on the payment, and the former acting chief financial officer (CFO) Tumelo Pitso did not have the authority to pay the trust. Both posts had been filled at the time.
Mthimunye, who was suspended this week, has previously said he was still the acting chief executive when he authorised the payment. “I was mandated by the current CEO to continue as acting CEO for the month of June 2017 while he was familiarising himself with the company and his new role. This was also announced to all NWDC staff in the staff meeting,” he said.
But the report is clear. “The individual who signed as acting CEO on the payment authorisation seemingly committed fraud by portraying himself as still being the acting CEO. The individual who signed as acting CFO on the payment authorisation seemingly also committed fraud by co-signing a payment that was signed by an individual who was not the acting CEO at the time … SCM [supply chain management] regulations were not complied with and, as a result, irregular expenditure was incurred,” according to the report.
The payments, which were made on June 23 and 29 last year, were in fact prepayments, even though there was no clause in the contract allowing for this.
“Two payments of 100% of the contractual amount were made to the supplier within two months of signing the contract with the supplier. The invoices of the supplier contained no evidence of any substantial work performed on the contract date … The payments made to the supplier … substantially represent prepayments as we could find no evidence of the work delivered by the supplier to that date included in the payment requisitions.
“This also means noncompliance with two of the contractual obligations … as the contract between NWDC and the supplier does not make proviso for prepayments,” the report states.
It adds there was no evidence of a single source or supplier, and it found no evidence that Mvest Trust was on the treasury’s central supplier database and no indication of declarations of interest.
The service-level agreement signed in April between the trust and the corporation stated that the trust and other companies with links to Mabe would provide laundry, waste management, recycling and dry-cleaning services. The agreement featured a host of companies and patents, all linked to Mabe.
Mabe, a former ANC MP, declared his directorship in companies Enviro Mobi and Kariki Media in Parliament’s register of members’ interests in 2016. These are the same companies that Mabe told City Press last year, after resigning as an MP, were subsidiaries of his Rivalox company, of which he said he was the chairperson.
These companies feature prominently in the multimillion-rand service-level agreement signed between Mvest Trust and corporation.
But Mabe has denied any wrongdoing and involvement in the deal except that he was a patent holder for an “Uber for laundry” app.
The trust and Enviro Mobi are run by Mabe’s cousin, Eulender Rakoma, and his former business partner and employee, Tinyiko Mahuntsi. Enviro Mobi supplies three-wheeler motorbikes, which Mabe refers to as “karikis”, his pet project.
Last week, the Mail & Guardian revealed that Enviro Mobi was paid R16-million just 10 days after signing a contract with the Gauteng department of agriculture and rural development despite a clear directive in the service contract that there would be no prepayments. Further payments of R9.4-million and R1.6-million were made in October last year and March this year.
It was alleged that Enviro Mobi had not delivered the 200 three-wheelers. The department’s internal audit discovered that only 50 had been delivered, and others were kept at a plant in Krugersdorp, prompting a legal battle between Enviro Mobi and the department.
Days after the M&G’s report about the nondelivery of the karikis, which were meant to benefit waste pickers, Gauteng MEC Lebogang Maile went to Krugersdorp this week to hand over 50 of them.