‘Indiza was entitled to profit’

2013-01-31 00:00

KWAZULU-NATAL businessman Jabulani Mabaso has denied defrauding the KZN Education Department of around R200 million.

He said in a statement before acting high court Judge Kobus Booyens yesterday that it was his understanding that his company, Indiza Infrastructure Solutions, was entitled to profit from the provision of stationery to schools in terms of an agreement with the department.

Mabaso pleaded not guilty to a total of 18 counts of fraud, forgery and uttering committed between 2005 and 2007, arising from a tender awarded to Indiza to supply stationery to provincial schools.

In a statement read to the court by his advocate, Willie Vermeulen SC, Mabaso maintained he knew nothing about the alleged incorrect suppliers’ invoices being presented to the department.

He said his understanding was that Indiza was entitled to profit in regard to the provision of stationery to schools in terms of a service level agreement reached with the department in 2005.

The department did not require Indiza to disclose prices at which it bought stationery from Indiza’s suppliers when Indiza submitted its own invoices for payment.

Nor did the agreement require that suppliers’ invoices be submitted in order for Indiza to be paid for its services to the department, according to his plea.

The court heard evidence that the service level agreement was a temporary agreement between Mabaso and the department on an urgent basis to ensure that stationery was supplied and distributed to schools pending the outcome of an appeal lodged against the award of the tender.

Mabaso submitted in his plea that at the time of its implementation, the service level agreement was in fact “void for vagueness and illegal” as it did not comply with the KwaZulu-Natal Procurement Act of 2001 and relevant supply chain management policies and delegations. However, at the time, he said, he did not know that.

State advocates Wendy Greef and Ayesha Bissessur yesterday served an amended indictment on Mabaso following the withdrawal of charges against his former co-accused, Pamela Bosman-Zulu.

In terms of the final indictment, he no longer faces charges of corruption or money laundering.

The state alleges in its indictment that in terms of the agreements reached between the department and Indiza, the company was appointed as a consultant or “managing agent” to procure goods and services on behalf of the department and was to be paid a set management fee for the duration of the contract.

“It was never the intention of the Department of Education that Indiza would be entitled to inflate the cost of stationery and accessories procured from suppliers and/or manufacturers,” the indictment states.

The state alleges that Mabaso knew that he was required to negotiate with suppliers to obtain stock at the lowest possible prices, and where discounts were given to declare these to the department.

Instead, it is alleged, prices were inflated and in some instances false invoices were created.

According to the indictment, the suppliers used by Indiza included African Spirit Trading, a company which was created by Mabaso.

The state alleges this company supplied stationery to Indiza at marked up and inflated prices, which were passed on to the department.

A former special investigator attached to the now defunct Scorpions unit, Alan Nixon, told the court he began investigating the Indiza contract after an informer had come to his office on October 26, 2006, and made allegations about irregularities concerning the award of the tender to Indiza.

The case is proceeding.

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