Shabalala took R1?mln bribe, says the state

2010-10-21 00:00

THE former provincial head of treasury in KwaZulu-Natal, Sipho Shabalala, is alleged to have accepted a R1 million bribe in connection with the purchase of water purification units for the Health Department.

This was one of the charges revealed yesterday when Shabalala and his wife, Ntombi, appeared in court in Pietermaritzburg alongside other high-profile accused charged with corruption, fraud and money laundering involving at least R46 million.

The Shabalalas were granted bail of R50 000, while four others — two former heads of the KZN Health Department, Busisiwe Nyembezi and Yoliswa Mbele, Durban advocate Sandile Kuboni and businessman Lindelihle Mkhwanazi — were each granted bail of R30 000. Wealthy Cape Town businessman Gaston Savoi was released with a warning as he is already on bail in connection with closely linked charges in Cape Town.

Others named in the charge sheet are Savoi’s company, Intaka Holdings (Pty) Ltd, which was allegedly corruptly awarded contracts to supply water purification and oxygen units to hospitals in the province, Mkhwanazi’s Rowmoor Investments (said to have claimed for “marketing” of water purification units at Rietvlei and Appellbosch hospitals knowing they did not market any of the units procured for these hospitals), and the Shabalala’s Blue Serenity Investments.

The courtroom was packed to capacity. Even the accused were unable to all find a seat in the dock when they appeared before regional magistrate Chris van Vuuren.

Television crews, photographers and journalists waited on the steps of the courthouse for over three hours from early morning for the arrival of the accused, who were still being “processed” by the investigating team at a police station. Savoi’s plane had reportedly been delayed.

The high-profile nature of the case was emphasised by the fact that the prosecution is being led by National Director of Public Prosecutions Menzi Simelane.

Who are the accused? Simelane in charge: page 4

Some of the allegations facing the accused are:

Shababala and government officials were invited to Brazil by Savoi in 2004 to view products manufactured by Intaka, including its water purification units (Watakas).

On his return from Brazil, Shabalala allegedly negotiated for the urgent disposal of R44 million in the Poverty Alleviation Fund for the purchase of 20 units. He allegedly fraudulently motivated for the funds on the basis that Intaka was the only supplier of these units.

 After the Brazilian tour, Shabalala and his wife formed Skyros Medical Suppliers (Pty) Ltd with Savoi.

Shabalala is alleged to have accepted a “gratification” of R1,053 million from Savoi in exchange for awarding the tender of the water purification plants to Intaka, and the amount is alleged to have been “laundered” through a trust account of Sandile Kuboni. The money was allegedly used to pay Shabalala’s creditors and R300 000 was distributed to Blue Serenity Investments.

The state alleges that Savoi, Intaka and Nyembezi together committed fraud between July 2006 and June 2007.

This relates to the acquisition of oxygen units for hospitals in KZN by manipulating tender specifications to favour Intaka over other bidders.

Mbele subsequently allegedly negligently ignored representations detailing the shortcomings in the tender specifications, as well as defects in the oxygen units.

Mkhwanazi and Rowmoor Investments allegedly received R1 million for services he did not render to the Health Department or Intaka.

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