DAILY MAVERICK - ORGANISED CRIME / 22 MAY 2020 - 14.44 / MARIANNE THAMM
All credit balances and interest in the bank accounts of a SAPS supplier who faked that she was BEE compliant, and who scored a R56-million contract to brand police vehicles, have been forfeited to the state under provisions of the Prevention of Organised Crime Act.
The judgment was delivered on 15 May by Judge AJ Barnard in the North Gauteng High Court in an application brought by the National Director of Public Prosecutions for the civil forfeiture of property in terms of Chapter 6 of the Prevention of Organised Crime Act.
The contents of the bank accounts of Vatika Trading and Projects (PTY) Ltd, Argan Auto Mechanical Innovation and Towing (PTY) Ltd, Gautools (PTY) Ltd, Kgotho Trading Enterprise 18, and Umbanathi Trading and Projects have now been forfeited to the state.
SAPS has long been a site of industrial-scale supply chain management fraud and corruption, with billions lost to crooked tenders for anything from food to forensic lights.
The NDPP’s success in this instance is a rare occurrence, but hopefully a sign of things to come.
According to court papers, Lorette Joubert, sole director of Vatika and Gautools; Volan Prithviray, sole director of Argan; Kumarasen Prithviray, the only member of Kgotho and Umbanati Trading and Projects, were flushed out after National Police Commissioner, Khehla Sitole, ordered an investigation on 2 March 2018.
Sitole had called for the investigation of contract irregularities within SAPS, particularly related to a national tender bid for the branding of SAPS vehicles.
With the help of corrupt cops, more than R56-million was paid to Joubert and Kumarasen Prithviray, while neither had “the infrastructure, personnel, market connections or skills to undertake the national tender.”
“Despite the fact that 1st [Joubert] and 4th [Kumarasen Prithviray] respondents suddenly emerged as a service provider for the branding of police vehicles with no substantial footprint in the particular industry, a substantial national tender contract to the value of R50-million was awarded to them,” Barnard noted in his judgment.
Joubert had attached to the bid an exempted micro-enterprise BEE verification certificate, even while she did not meet any requirements and because Vatika was in fact “100% white female-owned”.
“The director of Vatika is not black as stated on its bid documents, but in fact a white female,” said Barnard.
The court found that a collusive relationship had existed between Joubert and K Prithviray as they not only split the bids (by bidding for specific provinces without overlapping the provinces), but had also submitted the same pricing documents and had “practically identical pricing structures, suggestive of pricing collusion and so-called ‘cover-quoting’”.
Joubert and Prithviray’s companies had not been VAT registered at the time of the bid, while charging SAPS VAT on all invoices. The tender had been for R50-million, while a further R6-million had been paid in VAT.
Evidence had shown that, had the tender contract been awarded to any other service provider at realistic market-related prices, “the SAPS would have saved the National Treasury and therefore the South African tax-payers approximately R30-million”.
Joubert and K Prithviray should not have been awarded the tender as they had misrepresented themselves, and there was “a high probability” that legitimate tenders had been tampered with by corrupt cops so as to exclude these from the bidding process.
Money received from SAPS by Joubert and K Prithviray was in turn transferred into the bank accounts of Argan Auto Mechanical Innovation and Towing, Gautools and Umbanathi Trading and Projects.
On 7 September 2017, Joubert and K Prithviray had won the tender worth R50-million. Joubert was paid R45,642,642, 30 while K Prithviray had received R12,245,117,72.
Soon afterwards, 101 transactions, totalling R42,778,000, were made from Joubert’s account into the accounts of Argan Auto, Gautools, Kgotho Trading and Umbanathi Trading.
Joubert transferred R4,895,000 into Argan, R6,050,500 to Gautools, R6,000,000 to Kgotho and R20,790,000 to Umbanathi.
While Joubert and her co-accused had argued that these were business accounts, investigators could find no evidence of this. There were no salaries paid from the account, no UIF or rents, and expenses were all personal.
Barnard, in granting the order, said that there were reasonable grounds for believing that the property in the bank accounts of all the respondents “are proceeds of unlawful activities as envisaged in the provisions of chapter 3 of the POCA”.
The court order will now be published in the Government Gazette and within 45 days, the banks where these accounts are held are “authorised to transfer positive balances and interest… into the criminal Assets Recovery Account established under section 63 of the POCA.”
Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER