Probe finds R2 bln fraud in fisheries contracts

2012-10-02 00:00

CAPE TOWN — A damning forensic audit by Ernst & Young has uncovered fraud estimated at up to R2 billion in the Fisheries Department.

The amount could be even higher. It covers the period 1995 to 2012.

The report, a provisional copy of which sister newspaper Beeld has seen, lists as many as 27 names of individuals involved. Many of them were employees in the department.

The investigation was ordered after the department was taken to court last year by Smit Amandla Marine (SAM), a private company involved in the fisheries industry, in connection with the awarding of a contract worth R800 million for maintenance of the government’s boats.

The contract was awarded to another group, Sekunjalo, and SAM questioned both the tender process and the awarding of the contract in court.

Fisheries Minister Tina Joematt-Petterrson, acting on legal advice, cancelled the awarded contract and her department ordered the investigation.

The department said the investigation revealed that SAM itself, and earlier versions of the company, had the contract for the maintenance of the Fisheries Department’s boats between 2000 and 2012 at least, and according to the department, there were irregularities in the awarding of these contracts.

According to a statement issued by the department last night, further investigation found that SAM may have had the contract since 1995.

The department said that possibly only the initial contract, for a period of three years until 1998, was legal.

After that it was a “blank cheque given to the company” under “highly suspicious circumstances”, an official told Beeld yesterday.

In its statement the department said one of the findings was that all the contracts signed in 2000, 2005 and 2010 were “irregular” and deliberately framed in order to ensure “maximum benefit for SAM”.

This cost the state an estimated R1,6 million to R2 billion. The evidence indicates that there had been collaboration and corrupt relationships between government officials and SAM.

Beeld was told that according to the report the corruption occurred mainly in the marine and coastal management section.

This section has been moved around between three departments in the past 17 years — Environmental Affairs, Water Affairs and now Fisheries.

An official said the section was a “gang run like a mafia”, over which the department had no control. “That is why the minister wanted to move them to Pretoria earlier this year, to be able to gain more control,” said the official, who did not want to be named.

SAM spokesperson John Holtzhausen has rejected the report. He was then told that the report was drawn up by an independent auditor, not by the department.

“It is an untested report and for now these are only allegations,” Holtzhausen said.

The acting director-general in the department, Sipho Ntombela, will hand the report to the minister today.

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