Lear jet seized in R200m fraud raid

2010-08-25 22:47

Pietermaritzburg - Eight people appeared in court in two provinces on Wednesday following a R200m tender fraud crackdown by the Hawks and the Asset Forfeiture Unit.

The operation saw the seizure of assets including a Lear jet, worth in total roughly the same amount.

The crimes relate to alleged attempts to defraud the provincial health department by inflating the prices of water purification equipment for hospitals. One purification plant valued at R420 000 was allegedly sold to the department for R4m.

The men face fraud, corruption and money laundering charges and charges under the Public Finance Management Act, the National Prosecuting Authority said.

Officials involved

In the Pietermaritzburg Magistrates' Court, former KwaZulu-Natal health department head Dr Busi Nyembezi was granted bail of R50 000. Bail was set at R20 000 for the department's former procurement officer Mdu Ntshangase, and at R10 000 for the provincial legislature's current chief financial officer Sipho Buthelezi.

In Cape Town's Specialised Commercial Crime Court, Uruguayan national Gaston Savoi was granted bail of R200 000.

Savoi also represented accused number six on the charge sheet, namely a company called Intaka Holdings, the company that allegedly supplied the water purification plants at the inflated rate.

His co-accused, businessmen Fernando Praderi (also an Uruguayan national), Ansano Romani, Donald Miller and Ronald Geddes, were granted bail of R50 000 each.

Praderi was a director of Intaka at the time the offence was allegedly committed.

Geddes is involved in Imvusa Stainless CC, which allegedly supplied one of the quotations which formed part of the fraud charges, and Miller is a partner in the company.

The case was postponed to December 2 when all the accused will appear in the Pietermaritzburg Regional Court.

Bail not opposed

The State did not oppose bail for any of the eight.

The Cape Town men were, however, ordered to hand in their passports, and not to interfere with anyone on a list of 56 potential State witnesses.

Savoi's advocate, Francois van Zyl, told the court his client had been aware of the investigations since February 2007. He had given three statements to the police, and had offered to hand himself over when the police wanted to take him into custody.

Despite this, he has been arrested at his home, where police arrived while he was in the shower.

In the same court, prosecutor Anton Steynberg told Magistrate Amrith Chabillal that the accused had undertaken to satisfy the State's "misgivings" about certain funds that had been transferred overseas.

They would make a full disclosure on the source of the funds.

He said Romani, Miller and Geddes were all South African citizens with substantial business interests.

Lear jet housed at CT airport

However they had not benefited directly from the fraud, he said.

The NPA said in a statement that the Asset Forfeiture Unit had begun seizing assets worth an estimated at R200m from Savoi and Intaka.

These included the Shamwari Lodge in the Eastern Cape and the Lear jet, which was housed at Cape Town Airport.

A Maserati, a Range Rover, a Ferrari and an S Class Mercedes-Benz were also on the seizure list.

NPA spokesperson Mthunzi Mhaga said in the statement that Intaka and its subsidiaries had allegedly fraudulently and corruptly secured tenders to supply water purification plants to provincial hospitals.

Fraudulent 'cover quotes'

"It is alleged that in awarding Intaka the said tenders, certain officials from the department had fraudulently colluded with Intaka and certain entities without following the... procurement process," he said.

"It is further alleged that Intaka colluded with those officials to obtain fraudulent 'cover quotes' from two other Cape Town businessmen and charged grossly inflated and excessive amounts in respect of goods supplied."

Mhaga said it had been established that Intaka allegedly received a total payment of over R180m from various provincial departments in KZN and the Northern Cape in respect of several other suspected fraudulent or corrupt tenders.

He told reporters in Cape Town that investigations on the Northern Cape leg were continuing, and that the total amount involved was in fact about R200m.

Justice and Constitutional Development Minister Jeff Radebe said in Pietermaritzburg earlier that the arrests followed an investigation which started in 2008.

"Today's arrests and seizure of assets must send a message as clear as a bell to every doubting Thomas that there indeed is a political will on our part to combat corruption," he said.