Why crooks are shivering in their boots


The frenzy fuelled by a story published by Independent Online last week that Ace Magashule was to be arrested was the perfect metaphor for the recent array of high-profile arrests in the country.

The Directorate for Specialised Criminal Investigations, better known as the Hawks, and the National Prosecuting Authority (NPA) flexed muscle with arrests, millions of rands in seized assets, and a significant corruption conviction secured on Wednesday. 

The usually unflappable Magashule has reason to be jittery because more than R1-billion worth of alleged fraud, corruption and money laundering charges currently before the courts took place in the Free State, once Ace’s fiefdom.

He was the premier, from 2009 to 2018, when R756-million worth of contracts were awarded to Superior Quality Trading from 2012 to 2016. It’s alleged that bribes were paid to Seipati Dhlamini, the chief financial officer under the then MEC for agriculture, Mosebenzi Zwane. (Zwane has appeared before the Zondo inquiry into state capture for a housing project when he was MEC for human settlements.)

According to the charge sheet for Dhlamini and six others who are accused of receiving bribes to grant lucrative tenders Superior Quality, including the contentious R245-million Ilima Projects in 2014 to uplift 100 black farmers in the Free State. 

The Estina dairy farm near Vrede was part of this so-called upliftment scheme, where black farmers were allegedly swindled out of their livelihoods by a company that, according to the charge sheet, submitted fraudulent black economic empowerment documents, and did not bother to even attend tender briefings. 

Then there is the R255-million contract for the “assessment and removal of asbestos roofs and/or housing”. The Asset Forfeiture Unit has seized R300-million worth of assets from the seven accused. 

According to the charge sheet, businessman and ANC benefactor Edwin Sodi, one of the accused whose luxury vehicles were seized, did only R20-million worth of work but his company was paid R230-million. 

Sodi, astonishingly, is suing the Free State government for the remaining R25-million that he feels is due to him. 

The Superior Quality Trading, which include the Estina dairy, and housing contract cases form part of the NPA’s “prosecutor-driven investigations”, which ensures that cases are ready for trial by the time suspects make their first appearances in court.

VBS Mutual Bank

On Wednesday, the NPA secured its first scalp when fraudster Phillip Truter, the former chief financial officer of the defunct VBS Mutual Bank, pleaded guilty to fraud, corruption, racketeering and money laundering charges and was sentenced to seven years. 

The real coup for the NPA is that Truter agreed to spill the beans on the seven other suspects in the alleged R2.3-billion looting of the bank. 

In his plea agreement, which the Mail & Guardian is in possession of, Truter laid bare the scheme that they devised to falsify their financial records ending March 2017 so that they could plunder the bank. 

“The statement of the financial position in the annual financial statements was false in the following material respects: the asset described as ‘cash and cash equivalents’ in the sum of R802 427 245 was falsely inflated by an amount of R690 326 847.

“The asset described as ‘loans and advances’ in the sum of R1 081 831 081 was falsely inflated by an amount of R351 956 095. The liability described as ‘amounts owed to depositors’ in the sum of R1 553 659 282 was falsely inflated by an amount of R261 308 970,” the plea agreement read. 

“The equity described as ‘permanent interest-bearing shares’ in the sum of R150 473 996 was falsely inflated by an amount of R89 044 352.

“The true financial position of VBS as at 31 March 2017 was as follows: its total assets amounted to R1 037 194 164, whereas the annual financial statements reflected its total assets as R2 102 039 406.” 

The police

In KwaZulu-Natal, former provincial police commissioner Mmamonnye Ngobeni, her subordinate Colonel Navin Madhoe, and businessman Thoshan Panday, an ally of former president Jacob Zuma, appeared in court last week over allegations related to a R47-million 2010 Fifa World Cup police accommodation tender.   

But the real litmus test for the NPA will be next month, when former national police commissioner Khomotso Phahlane and a string of top cops go on trial for 329 counts of fraud, assisting another to benefit from the proceeds of unlawful activities, acquisition or possession or use of proceeds of unlawful activities and the contravention of the Public Finance Management Act.

This relates to the R191-million tender to fit Gauteng police vehicles with equipment that included radios and sirens.

Last week, a well-placed source told the Mail & Guardian that more arrests would be made this month before the Phahlane trial kicks off.  

On Monday, the first of these arrests materialised when deputy national commissioner Lieutenant General Bonang Mgwenya was arrested and added to the “blue-lights tender”. 

The South African Police Union (Sapu) has called on the national commissioner, General Khehla Sitole, to act decisively against the official. 

“Sapu has previously witnessed with dismay junior  officers swiftly suspended and dismissed for petty offences while senior officers suspected of serious offences were protected or suspended with full benefits for an  unlimited period of time,” the union’s acting general secretary, Peter Ntsime, said in a statement. 

“Sapu is not asking for any favours or preferential treatment for the deputy national commissioner, but for consistency and fairness and that the SAPS will follow its own disciplinary procedure.”

How the NPA and its crack corruption-busting unit, the Investigating Directorate, fares in the Phahlane matter will indicate the strength of its probes. This high profile arrest is a good start.

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