Swoop on 3 attorneys

2010-11-23 00:00

Three Durban attorneys from the law firm Kuboni Shezi are the latest “big fish” netted in connection with allegations of corruption, money laundering and tender fraud in KwaZulu-Natal’s public health sector.

Attorneys Nozibele Phindela, Jabulani Thusi and Ian Blose were arrested yesterday and added to the case in which other high-profile individuals, including former head of the provincial treasury in KZN, Sipho Shabalala, high-flying Cape businessman Gaston Savoi and his company, Intaka Holdings, and two former heads of the KZN Health Department are among the accused.

One of the charges arises from an allegation that Shabalala accepted a “gratification” of R1,053 million from Savoi in exchange for awarding the tender for the water purification plants for KZN hospitals to Intaka. The money is alleged to have been “laundered” through the trust account of Sandile Kuboni (previously the sole proprietor of Kuboni Shezi, who is now an advocate and who is also a joint shareholder in some of Shabalala’s companies).

The money was allegedly used to pay Shabalala’s creditors and R300 000 was distributed to Blue Serenity Investments, of which Sipho and Beatrice Shabalala are joint shareholders.

Savoi and his company, Intaka Holdings, also stand charged in aligned cases in Cape Town and Kimberley.

Following their arrest yesterday afternoon, the three attorneys appeared briefly before Pietermaritzburg regional court magistrate Chris van Vuuren.

They were each granted bail of R15 000 and ordered to appear in court again along with the original accused on December 2.

The firm Kuboni Shezi is also charged in the matter.

A source sympathetic to the attorneys suggested yesterday there may be an ulterior motive for the arrests of the attorneys, following a failed bid by investigators to obtain a court order in Durban last week to compel the law firm to hand over files to them.

The magistrate is said to have struck the matter off the roll on grounds that as the case was already before the court in Pietermaritzburg, that court ought to be approached to deal with the application.

The source said investigators sought to gain access to the trust account of Kuboni Shezi, but the principals of the firm — who took over when Sandile Kuboni left in March 2007 — were of the view they were legally bound to honour the attorney-client privilege that existed between the firm and Sipho Shabalala. The source said this view was confirmed by senior counsel Kemp J. Kemp, whose opinion was faxed to investigators.

The source said it is “strange” that investigators previously expressed the view that the attorneys concerned were “clueless” about the matter.

“In these circumstances their arrest comes as a huge surprise,” he said.

The “dirty” money alleged to have been laundered through the firm’s account is alleged to have been paid in during March 2007, around the time that Kuboni left the firm to join the Durban Bar.

A total of 10 individuals and seven companies are charged on 17 counts of corruption and money laundering in the case to date, but not all the accused are charged with all the counts listed in the draft charge sheet.

Also accused are Busisiwe Nyembezi, a former head of the KZN Health Department, Beatrice “Ntombi” Shabalala, wife of Sipho Shabalala; advocate Kuboni; Lindelihle Mkhwanazi, a shareholder of Rowmoor Investments, and Yoliswa Mbele, also a former head of the provincial Health Department.

Among the companies charged is Savoi’s company, Intaka Holdings (Pty) Ltd, which was allegedly corruptly awarded water purification and oxygen unit contracts for hospitals in the province.

Mkhwanazi’s Rowmoor Investments said to have claimed for “marketing” of water purification units at Rietvlei and Appelsbosch hospitals knowing they did not market any of the units procured for these hospitals, and the Shabalala couple’s Blue Serenity Investments.  

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