Nine people including former municipal officials and an advisor to the Eastern Cape premier were due to appear in the Port Elizabeth magistrate’s court on Friday following their arrest on allegations of fraud, corruption, and money laundering involving over R56.4-million.
The group will be charged along with six companies over the crimes which resulted in a potential loss of around R200-million, Directorate for Priority Crime Investigation (Hawks) spokesperson Lieutenant-Colonel Philani Nkwalase said in a statement.
He said the nine suspects, aged between 30 and 65, were instructed to hand themselves over to the Hawks on Friday.
“The suspects include two former Nelson Mandela Metropolitan municipal officials, two influential community office bearers as well as five business people. The said nine natural persons will be charged along with six juristic persons (entities). The tenth person who was to be arrested passed away recently,” Nkwalase said.
He said the Hawks’ Serious Corruption Offences team had been investigating a case in which the municipality had been among those selected for a rapid bus system in 2010. The Integrated Public Transport System project was administered with funding allocated by the National Treasury.
In the same year another project, the Implementation and Maintenance of an Institutional Contracts Management and Administration System was undertaken.
The selection of service providers for the projects was however irregular and their prices allegedly inflated.
Nkwalase said the matter was reported to the Hawks in September 2018 after an audit by the National Treasury.
“It is alleged that the suspects operated a syndicate with common purpose to unlawfully circumvent the prescribed procurement processes to irregularly and fraudulently benefit specific suppliers or consultants,” he said.
“It is further alleged that influential office bearers colluded with municipal officials and controlled decision-making in the appointments of specific persons in critical municipal posts. This was purportedly done to influence procurement processes as well as the appointments of entities willing to advance the interests of the syndicate.”
The objective was allegedly to ensure unlawful payments were made from the municipality to members of the syndicate, Nkwalase added.
The first leg of the investigation was conducted in April 2017 when six people were arrested, including two company directors, one entity, a municipal official and one person from the Eastern Cape province’s rugby union.
The latest arrest of the nine suspects formed part of the second leg of the Hawks investigation, Nkwalase said.