Nkonyeni case ‘led to latest bust’

2010-08-27 00:00

WERE the arrests on Wednesday of leading KZN government officials a case of the tables being turned?

There is speculation that the investigation that led to the arrests started with the case against former Health MEC Peggy Nkonyeni, who was arrested on corruption charges relating to the purchase of a ultrasound machine at an inflated price.

According to that charge sheet, Nkonyeni received free luxury accommodation at the Steenberg Hotel owned by businessman Gaston Savoi, who is one of five people arrested this week.

The corruption charge against Nkonyeni was dropped and it is believed this was because Savoi allegedly submitted an affidavit mentioning other deals in KZN. This was when the investigation that led to this week’s arrests started.

Nkonyeni’s supporters see the situation as a change of fortunes, the tables being turned, especially as one of her alleged accusers in the last case, former head of the Health Department Dr Busi Nyembezi, is now in the dock.

There is confusion as to why a preservation order was taken against assets owned by Sipho Shabalala, CEO of Ithala Bank and former KZN Treasury head, without him being arrested.

A preservation order is taken to attach goods that are the proceeds of crime.

The City Royal Hotel owned by Shabalala and his wife was attached and placed under curatorship.

Other items confiscated include a farm and motor vehicles. Many believe that this could be a case of the investigators holding out in the hope that Shabalala may spill the beans about bigger fish in the province. However, the National Prosecution Authority (NPA) has indicated that Shabalala is to be arrested and charged soon.

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

The charges relate to the gross inflation of prices on a tender for water purification plants and oxygen machines, allegedly from a company in which Savoi and Shabalala’s wife Ntombi were directors.

Wednesday’s arrests are the first major bust after President Jacob Zuma’s announcement recently of a major crackdown on fraud and corruption in government.

The importance was underscored when Justice Minister Jeff Radebe arrived in Pietermaritzburg to hold a press conference on the arrests.

His presence raised concerns about the separation of powers and questions about why the Justice minister was making an announcement on a matter involving the NPA.

Did this echo the famous joint announcement by former justice minister Penuell Maduna and the then Scorpions head, Bulelani Ngcuka, that corruption charges were to be brought against Schabir Shaik?

UKZN law professor Karthy Govender said there is nothing untoward about Radebe holding the press briefing. He noted that Judge Chris Nicholson did remark on the separation of powers regarding the Maduna press conference in his judgment in Zuma’s corruption case, but this concern was overruled by the Supreme Court of Appeal.

Where this does become an issue is when a government minister interferes in a prosecutorial decision, for example about who should be charged. He said this certainly is s not the case here.

Sources within the KZN ANC alliance, who exerted pressure along with the opposition parties in KZN for Shabalala to be removed or to step down as Ithala CEO, welcomed this week’s developments.

Asked about Radebe’s presence amid the raids, his spokesperson, Tlali Tlali, said an act of addressing the media after the arrests does not amount to any interference. “The minister is the political head of the Department of Justice under which the National Prosecuting Authority (NPA) falls as a programme.”

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