Eight face charges of massive fraud in hospital procurements

2010-08-26 00:00

FORMER KwaZulu-Natal Health Department head Busisiwe Nyembezi (59), chief financial officer for the KZN Legislature Alson Sipho Buthelezi (48) and Health official Victor Mduduzi Ntshangase (46) faced the prospect of a night in jail when it was realised there was no one to accept their bail money at the magistrate’s court yesterday due to the ongoing strike action.

But special arrangments were made to enable the trio’s bail of R50 000, R10 000 and R20 000 respectively to be paid at a police station.

The three were among eight people arrested yesterday morning by the Hawks, the Asset Forfeiture Unit and the police in Cape Town, Durban and Pietermaritzburg in connection with a R200 million fraud, corruption and money laundering investigation.

The state alleges that between September and October 2006 the three defrauded the Health Department in relation to tenders for the supply of water purification units for Rietvlei and Appelsbocsch hospitals to the tune of R7 960 000.

The three are accused of misrepresenting to the department that three “independent and genuine” quotations were obtained “in the course of a fair and transparent procurement process”.

However, the quotations were allegedly the product of a collusion by Nyembezi and other co-accused who conspired to award the contract for the supply of the equipment to Intaka Holdings (Pty) Ltd.

The charge sheet lists a total of nine accused, including Nyembezi, Ntshangase and Buthelezi.

The other five accused — an Uruguayan, Gaston Savoi, and businessmen Fernando Praderi, Ansano Romani, Donald Miller and Ronald Geddes — appeared in court in Cape Town simultaneously yesterday.

The ninth accused listed in the charge sheet is Intaka Holdings.

A packed Pietermaritzburg court waited eagerly for the appearance of Nyembezi, Ntshangase and Buthelezi following a well-attended press briefing by Justice Minister Jeff Radebe, who promised that corrupt officials will be hunted down.

Nyembezi unsmilingly led the way into court from the cells, but Ntshangase and Buthelezi appeared more relaxed as they sat in the dock.

Several hours elapsed while the defence and prosecution haggled in private over bail, and prepared affidavits in support of their bail application, which was heard before magistrate Divesh Mootheram.

Throughout, Ntshangase kept his eyes hidden behind his sunglasses until he quickly whipped them off — to the amusement of the public gallery — when the magistrate inquired if he had a “problem” with his eyes.

Mootheram hastened to add that he was “not being sarcastic”, but merely asking a question.

In support of their bail application all three accused submitted affidavits detailing their personal circumstances, undertaking not to interfere with witnesses and indicating their intention to plead not guilty to the charges.

State advocate Ncedile Dunywa of the National Prosecuting Authority, said the state does not believe there is a risk the three accused will flee and was not opposed to bail being granted.

• Ntshangase was previously a co-accused of former KZN Health MEC Peggy Nkonyeni against whom corruption charges were withdrawn late last year.

Also named during court proceedings in that case — but as a potential state witness — was Gaston Savoi.

The prosecution alleged in that case that Nkonyeni received benefits including R20 000 and “free luxury accommodation” at Savoi’s Steenberg Hotel in exchange for using her influence in relation to the purchase of a specialised ultra-sound machine from Rowmoor Investments for an inflated price of R1,5 million in 2007. The actual price is alleged to have been R425 000.

CASH in bank accounts and shares and business interests of Cape businessmen Gaston Savoi and Fernando Praderi in the following firms: Intaka Holdings, Skyros Health, Sanbona Lodge, Intaka Northern Cape, Savoi Family Trust, Blue Serenity Investments and Skyros Medical Suppliers;

Ansano Romani’s shares and dividends in Imvusa Stainless (Pty) Ltd and RPMR Prop CC;

Donald Miller’s shares in the same two companies;

Sipho Shabalala’s and Sandile Kuboni’s interests in Cowslip Investments, Blue Serenity Investments, Skyros Medical Suppliers, Salamax 1608 and Othandweni Family Trust; and

Rowmoor Investments’ shares in RPMR Prop CC.

Also listed were:

Nine properties in Cape Town;

Two Stellenbosch farms;

Four properties in Durban;

Seven Pietermaritzburg properties and a farm;

Two properties in the Eastern Cape.

In total 41 — mostly luxury vehicles — were listed, including a Ferrari 612 Scaglietti, a Maserati Quatroporte and a Learjet registered to Skyros Properties (Pty), as well as several Mercedez Benzes, BMWs, various four-wheel drive vehicles, and tractors and trailers.

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