Hawks arrest former EC dept head, two others in fraud, money laundering case worth R29m

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The Hawks have three people for alleged fraud and money laundering.
The Hawks have three people for alleged fraud and money laundering.
Felix Dlangamandla, Gallo Images, Netwerk24
  • Sedibeng District Municipal manager and former Eastern Cape social development HOD Stanley Khanyile is accused of authorising two questionable payments.
  • Khanyile, appeared in court alongside Umhlanga businessman and chartered accountant Poovandaren Chetty and advocate Vuyokazi Sangoni.
  • The trio has been granted bail.

Former Eastern Cape social development department head and current Sedibeng district municipality manager Stanley Khanyile, as well as two others, have been arrested by the Hawks in connection with a fraud, theft and money laundering case worth more than R29 million.

Khanyile, Durban businessman and chartered accountant Poovandaren Chetty, and former chief director of the department and advocate Vuyokazi Sangoni, appeared at the King William's Town Magistrate's Court on Friday.

Khanyile has been charged with two counts of contravening the Public Finance Management Act and two counts of fraud.

Sangoni has been charged with one count of fraud, while Chetty faces 16 counts of fraud, 18 counts of theft, and 15 counts of money laundering.

Magistrate Nkosinathi Mjekula granted the accused bail and postponed the case to 16 October.

State prosecutor Antoinette De Jager told the court that, when the case is transferred to the High Court, it would charge that the R29 million was siphoned from a R42 million budget earmarked for the construction of a resources development centre during the 2015-16 financial year.

She said the State would charge that, without following normal procurement processes or involving a supply chain unit, Khanyile, then appointed Umnotho Development - a company owned by Chetty.

A sum of R14.466 million was then paid to Chetty's company shortly afterwards, De Jager said.

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De Jager said another amount of R15 million was paid to Chetty's business again the following year after a tender for "training and capacitation" of cooperatives was advertised.

While it was not stated in court what Sangoni's role was in the matter, her lawyer Tozama Mqobi told the court that her client was only implicated on one count of fraud.

In a sworn affidavit read in court by De Jager, investigating officer Captain Nuwal Jacobs stated that the case was serious.

"The nature of the offence is of a very serious nature and I therefore humbly submit that these fall within the ambit of Sschedule 5 of the Criminal Procedures Act 51 of 1977."

'Humiliating arrest'

Arguing for a reduction of bail, Mqobi told Mjekula that her client was a single and self-employed mother of two, running her own legal practice. "You can imagine, your worship, how life is difficult under these tough pandemic times."

Jacobs stated that Sangoni was divorced.

Mgobi and Khanyile's lawyer, Mathobela Sishuba, told the court how their clients were arrested in a dramatic manner, despite having previously cooperating with the police back in 2018 when they were summoned to give statements.

Mqobi said five police vehicles stormed Sangoni's mother's house early on Thursday morning.

"They woke my client's mother and subjected my client to a frustrating, humiliating arrest," said Mgobi.

Khanyile was released on R50 000 bail and ordered to report to the Springs police station every first Saturday of the month.

Chetty was released on R200 000 bail and ordered to report to a nearest police station in Durban, also on every first Saturday of the month.

Sangoni was ordered to report at the Gonubie police station every second Monday and was released on R20 000 bail.

Only Khanyile and Sangoni were released on reduced bail.

Chetty's lawyer Bayanda Bakumeni's plea for his client's R200 000 bail to be reduced was shot down by Mjekula.

Mjekula said Chetty had businesses in South African and India and, therefore, the bail was set at an amount to ensure he was not tempted to abscond.

The State did not oppose bail, with De Jager stating that all three had fixed work and home addresses and were not likely to evade trial.

The court heard that Khanyile was a married man with four children and had a fixed address in Alberton, Johannesburg, with a fixed employment at the Sedibeng Municipality.

Sangoni was a successful lawyer with a seven-year practice in East London’s Berea, and criss-crossed the country regularly to defend her clients, said Mqobi. 

She is the sister of under-fire presidential spokesperson Khusela Diko and a niece of retired Eastern Cape judge president Themba Sangoni, she confirmed to News24.

Chetty resides at an estate in Durban's affluent Umhlanga suburb. He stated under oath that he was in Johannesburg for business when he received a call from his wife telling him police were at his house with an arrest warrant.

He said he had to drive from Johannesburg to King William's Town to hand himself over to the police.

Mjekula revealed that the State intended transfering the case to the High Court for trial.  

The accused spent Thursday night in police cells.

*UPDATE: This story has been updated with additional information from the National Prosecuting Authority.

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