Msunduzi mayor hits out at Samrem

2016-04-01 12:30
Msunduzi Mayor Chris Ndlela at the media launch of the State of the City address yesterday.

Msunduzi Mayor Chris Ndlela at the media launch of the State of the City address yesterday. (Kailene Pillay)

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Pietermaritzburg - Msunduzi Mayor Chris Ndlela has lashed out at the South African Minority Rights Equality Movement (Samrem), accusing the organisation of failing to report fraud and corruption allegations to city management before going to the police.

Samrem secretary Naeem Hussain was the complainant in the police matter that resulted in the raid at the city hall and other municipal offices two weeks ago.

Police swooped on offices in search of evidence concerning allegations that tender irregularities had cost the city more than R2 billion.

Three laptops and “large volumes” of documents and files were seized during the raid. It is believed these contain valuable information linking high-ranking city officials to tender scandals dating back to 2014.

Ndlela said in a statement to The Witness yesterday that Samrem had insinuated the municipality “does not take seriously such transgressions” by reporting the issues directly to the police and not through the various avenues provided by the city.

Ndlela listed fraud cases involving amounts of over R300 000 that are being investigated at Msunduzi, which total over R40 million, saying it is “testimony” that the municipality had done much to deal with fraud, corruption and money laundering [see sidebar].

He added that the city council had “no record” of Samrem or its leaders reporting the allegations behind the police raid.

“If the allegations were reported to senior management and no action was taken, one would expect that such matters would be referred to the Mayor or the Speaker,” said Ndlela.

He said Samrem’s statement that “evidence is being destroyed” at city hall would compromise investigations, and called on the organisation to present such knowledge to the investigating officers as soon as possible.

“Further, we encourage Samrem, like we encourage the general South African community and whistle blowers, to present all evidence … to assist with an efficient investigation,” said Ndlela.

However, Hussain said the group had consulted with Ndlela.

He said a letter sent to the Public Protector regarding a R1,2 billion optic fibre deal and the red paving outside the city hall was also sent to Ndlela.

“He [Ndlela] is also reminded about meetings that were minuted that he attended,” said Hussain.

He said the minority rights group blamed Ndlela for the “neglect” of the northern suburbs and had “no intention of co-operating” with him.

“We see our way to co-operating with respected high-ranking ANC officials and will furnish all information to them,” Hussain said.


MAYOR Chris Ndlela said yesterday the Msunduzi council was committed to good governance.

He said citizens had many avenues to report fraud, corruption and money laundering, such as the whistle-blowing hotline managed by independent auditors.

The cellphone numbers of the political and administrative leaders were also publicised.

“All matters of alleged fraud, corruption, theft, unethical behaviour etc. are referred to the appropriate units for investigation purposes without fear, favour or prejudice,” he said.

Ndlela listed the following fraud cases that are either being investigated or have already been finalised:

1. Theft of fuel

During an investigation by the now disbanded Scorpions in 2004/5, theft of council fuel to the tune of at least R1 million a month was investigated.

The matter was later handed over to Pietermaritzburg police. Since nothing came of those investigations, the current administration started its own investigation in 2013. One former municipal employee was arrested and an employee in waste management was charged with misconduct and resigned.

Ndlela said both cases are still in court, while Msunduzi’s legal services is busy with five other employees involved in the theft of R5 million of fuel.

An anti-theft solution was implemented and an audit for the first quarter revealed a saving of R2 million.
2. Fraud on pre-paid electricity, and theft

Ndlela said this case was re-opened by the current administration because of “shoddy” investigations done previously.

Initially it was found that electricity theft amounted to R1,8 million, but the Public Prosecutor declined to prosecute on the basis of insufficient evidence.

The new investigation could only prove fraud amounting to R841 000 because of a lack of documentation. Ndlela said the matter is currently with a prosecutor in the Commercial Crime Court in Durban.

3. Housing fraud in Imbali

A case of fraud relating to the sale and transfer of houses in Imbali using the Housing Discounted Benefit Scheme is currently being prosecuted. This case was investigated in 2012/13 and litigation is in progress to reverse the illegal transfers to the rightful owners or the municipality.

4. Mountain Rise cremators

A forensic investigation on the R6 million spent on new cremators was conducted and the matter is still being finalised.

5. Fraud in artisans’ contracts

An investigation in 2013/14 uncovered losses of almost R2,4 million and is currently under investigation by the Hawks.

6. Independent development trust implementing agent

Ndlela said the matter was fully audited and being handled by senior counsel, with Msunduzi trying to recover a “substantial” amount of money. “SAPS is handling the criminal aspect of the investigation,” he said.

7. Human Settlements fraud

An amount of about R10 million is under investigation and a misconduct inquiry over part of the matter is in progress.

8. Fraud relating to electricity contracts

A forensic investigation uncovered fraud by electricity contractors to the tune of R3 million during the 2014/15 financial year. Criminal cases are being registered and litigation is in progress.

9. Fraud on overtime

Council uncovered fraud on overtime to the tune of R1 million through its forensic investigations and is in the process of registering criminal cases with the police.

10. Counterfeit goods

Ndlela said a service provider had supplied the municipality with counterfeit goods to the value of R600 000. Once reported, the municipality investigated the matter and it is currently being prosecuted.

11. Alleged fraud on ICT-related tenders

Two tenders were identified where irregular transactions were detected. One tender with a potential value of R23 million was stopped while the second is still under investigation.

• Ndlela added that current forensic investigations include, among others, alleged fraud and corruption to the tune of R14 million.

Read more on:    msunduzi municipality  |  pietermaritzburg

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