A well-known Eastern Cape businessperson and a former senior municipal official from the same province were arrested earlier on Sunday in connection with allegations of fraud in the province.
The Mail & Guardian has reliably learnt the arrests were made by the Eastern Cape Anti-Corruption Task Team in Sandton, Johannesburg and Qumbu near Mthatha in the Eastern Cape. They are expected to appear in the Stutterheim magistrates court on charges of fraud, money laundering and contravention of the Municipal Finance Management Act.
The charges relate to alleged unlawful deviation from tender procurement processes in the Amahlathi local municipality’s procurement of earth moving equipment.
The official was a municipal manager there at the time. The pair’s names are known to the M&G, but will not be revealed until they plead in court.
The arrests of the two were confirmed by the police, although their names have been withheld.
The municipality is one of four local authorities in the Eastern Cape where tenders awarded to the businessperson’s company were investigated by the Special Investigating Unit (SIU).
The investigations into contracts at Amahlathi local municipality, Alfred Nzo district municipality, Raymond Mhlaba local municipality, and Mbhashe local municipality were initiated between 2016 and 2018.
The businessperson and the SIU were embroiled in a bitter battle over R92-million paid by Amahlathi to the man’s company in a hire purchase agreement to buy the equipment. The SIU claimed the money was “falsely paid” in the tender awarded in 2014.
This latest swoop follows the arrest of 10 people by the Hawks in the Eastern Cape, Gauteng, Mpumalanga, and KwaZulu-Natal for the R600-million Siyenza toilet scandal in the Amathole district municipality. A national treasury investigation found that procurement rules were flouted in the awarding of the tender, where R231-million of the R600-million was paid to Siyenza to build ventilated toilets in villages in that district.
All ten were released on bail ranging between R10 000 and R40 000 and are due to appear in court next February.