The revelations are contained in a lawsuit by PJG Integrated Security and Safety Consultants, which is suing Hedgeway Staffing and Admin Solutions, a front company for the NIA.
According to court papers, the front company has broken South African companies law and tax regulations and acted fraudulently.
An affidavit by Peter John Galloway, head of PJG, says his company was hired by Hedgeway to set up the secret “warehouses” on contract.
But he’s now demanding R6.7m he says he’s owed for work done in Nelspruit, Durban, Polokwane and Johannesburg.
The court papers give insight into the workings of the intelligence agency in SA, and claim that payments – even transactions amounting to millions – are all done in cash.
The papers also say Hedgeway has no financial statements or articles of association and was simply used as a shell for handling contracts with external contractors.
Because all its transactions are made in cash, NIA even paid the substantial bank charges on these cash deposits for contractors.
Galloway’s bank statements corroborate substantial cash payments.
The court papers state that Hedgeway’s auditor confirmed to Galloway’s attorney that the auditor had not prepared financial statements for the company.
Galloway argues that, as a result, NIA not only contravened the Companies Act, but also South Africa’s tax laws. The agency is also accused of fraud in using front companies that will only transact in cash.
The court documents say Hedgeway’s only director is “Reggie Bosie” - not his real name, but his true identity is revealed in the court papers - a senior official in the NIA.
Bosie had hired Galloway to set up new sites for the agency and he would decide on the technology the sites would be equipped with. He also equipped vehicles for the sites.
Galloway is claiming R6.7m for the last four sites he established out of the series of 25. He has already won a default judgment for the debt in court after the agency ignored his demand for payment for months.
He was successful in having Hedgeway liquidated earlier this year, and a court sheriff tried to seize its assets at NIA’s headquarters in Pretoria, but he was sent packing by the intelligence agency’s officials.
Following the sheriff’s visit, Galloway’s legal team received a threatening lawyer’s letter from NIA which accused him of breaking the law and said if he pursued his claim he would be charged and his farm attached. He doesn’t own a farm.
He’s now preparing for the legal “interrogation” later this month of some top NIA officials in terms of the Companies Act. They could be interrogated in open court about the agency’s affairs and methods.
Spokesperson Brian Dube said the NIA would prefer not to comment “given the legal issues at play”.