‘My hands are clean’

2010-08-26 00:00

THE hands of Sipho Shabalala — Ithala Bank CEO and the owner of Pietermaritzburg’s City Royal Hotel — are clean, his spokesperson Vuyo Mkhize said yesterday.

This follows the seizure of Shabalala’s Othandweni Farm and his hotel by a multi-agency investigation team in early morning raids.

The raids came as fraud and corruption charges were laid against five businessmen and three government employees in Pietermaritzburg and Cape Town, in connection with alleged attempts to defraud the KZN Health Department by inflating the prices of water purification equipment for hospitals.

A water purification plant valued at R420 000 was sold to the department for R4,9 million.

Mkhize said the Assets Forteiture Unit (AFU) served Shabalala with a provisional preservation order against a number of his assets, including the hotel and the farm, both in Pietermaritzburg.

“At this point, Mr Shabalala is not aware of the basis upon which the provisional order was obtained.

“He is in consultation with his lawyers in preparation for his appearance in court on September 30, when he will seek to have the order set aside.

“Mr Shabalala will co-operate with any law enforcement agency tasked with investigating allegations of corruption within the various public institutions in which he once held, or continues to hold, positions of responsibility,” said Mkhize.

The investigating team, comprising the Hawks, the National Treasury and the AFU, seized assets worth an estimated R200 million during raids in KZN and the Cape.

These included Shabalala’s properties and another farm in Pietermaritzburg.

A fleet of luxury vehicles, including a Ferrari, a Maserati, a Range Rover and an S-Class Mercedes Benz were seized in various locations, while a Learjet was seized in Cape Town.

Former KZN health senior official Dr Busi Nyembezi, KZN legislature chief financial officer Sipho Buthelezi and former health procurement officer Mdu Ntshangase appeared in court in Pietermaritzburg on charges of corruption, fraud and money laundering.

Shabalala was said to be in Durban yesterday.

“Shabalala can only speculate on reasons for the seizures of his properties,” said Mkhize

“Until all the processes involved in this are through, we can only speculate as per today’s media reports on the issue that the raids into Shabalala’s properties are as a result of his previous position as the head of the KZN treasury and the role he played in facilitating the R1 million donation for the ANC.

“His name will be cleared after this.”

Addressing the media at the Pietermaritzburg Magistrate’s Court yesterday, Justice Minister Jeff Radebe said the investigation was initiated in 2008 following allegations of irregular procurement processes between the KZN and Northern Cape health departments and Intaka Holdings.

He said the accused had colluded in defrauding the government for their unscrupulous gains.

“Our law enforcement agencies will prove that Intaka fraudulently and corruptly secured tenders for the supply of water purification plants and the supply of oxygen and medical gases to hospitals in KwaZulu-Natal and the Northern Cape.

“Members of the supply chain management played a role in fleecing the government’s resources,” said Radebe.

Radebe said he is on the trail of at least 100 people participating in corruption to the tune of R500 million.

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