Tenders: more arrests expected

2011-10-24 00:00

MORE arrests are expected in the R60 million procurement fraud case involving the KZN Social Development Department. Fourteen arrests have been made of which 10 are close family members, the Sunday Times reported yesterday.

KZN Social Development head Bheki Nkosi told the standing committee on public accounts (Scopa) on Friday that junior and senior officials have been implicated.

They include the suspended chief director in charge of the supply chain management unit and supply chain manager Bhekuzalo Khuzwayo, who was arrested and is out on bail of R40 000.

Nkosi hinted at more arrests, saying, “Maybe the person speaking here could be part of the investigation, maybe the CFO [chief financial officer] let the investigation take its course.”

The case concerns fake quotations and front companies used to cover up the fact that all tenders were allegedly going to one company — Andisa Unathi.

The Times reports that the 10 family members are close relatives of accused Mthokozisi Nxumalo, a Richards Bay businessman, and his wife, Hlengiwe. Family members include his mother, mother-in-law, his wife’s younger sister, cousins, sisters, brothers and a sister-in-law.

The department has since 2001 had eight audit qualifications and one disclaimer. It managed to obtain an unqualified audit in 2007/08, but regressed in the next two years to getting qualified reports.

In its latest 2010/11 audit it improved, getting an unqualified audit with “matters of concern”. Scopa member Pricilla Mackay asked how the department managed to receive an unqualified audit report.

Nkosi said there were vast improvements in the department’s financial management and that CFO Ashnee Singh was appointed in December 2008, the first time a qualified person was appointed to the post.

He also noted that the procurement fraud had been uncovered because of proactive steps taken by the department. Nkosi said it was the department that had approached the KZN cabinet about problems within its supply chain management unit, adding that the cabinet had assigned Treasury to assist, hence the large-scale investigation and widespread arrests.

Treasury is running the supply chain section until the department has its house in order, he said. Scopa has asked for a progress report on all investigations by the end of March.

• nalini@witness.co.za

Join the conversation!

24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions.

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.