Hefty sentences for those involved in R21.8m City of Ekurhuleni tender fraud

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  • The people at the centre of the R21.8-million City of Ekurhuleni tender fraud were sentenced in the Pretoria Specialised Commercial Crimes Court on Wednesday.
  • Last month, lawyers representing the accused asked the court to show mercy by not incarcerating them, but rather imposing a fine or correctional supervision.
  • The court imposed hefty sentences. 

Those involved in the R21.8-million City of Ekurhuleni tender fraud, which dates back more than a decade, have been handed sentences ranging from 10 to 15 years in prison.

The group was sentenced in the Pretoria Specialised Commercial Crimes Court on Wednesday.

They are Velero David, Nilesh Singh, Andrew Mphushomadi, as well as Meropa Sechabeng Technology CC represented by David, and Nanga Transport CC represented by Princess Makhosazana Dlongolo.

David and Singh were found guilty of fraud and corruption, while Mphushomadi was found guilty on money laundering charges for receiving benefits of unlawful activity.

In April, the accused asked the court to show mercy by not sending them to prison, but instead imposing fines or correctional supervision.

Advocate Anneline Roestorf said in 2007, when David had signed the tender documents, he was still 22-years-old and "immature".

She added that David was charged over a decade ago and that to incarcerate him now would be unconstitutional.

Turning to Singh, the advocate said, he was 49 years old with two chronic illnesses. She said Singh was married with four children and was the sole breadwinner.

READ | Gauteng MEC Mbali Hlophe's department 'flouted tender processes'

Still, the court decided not to be lenient towards the accused, who faced serious charges.

According to the Special Investigating Unit, the court sentenced David to 10 years for fraud and 15 years for corruption. Singh, who is a former Ekurhuleni IT executive, was also sentenced to 10 years for fraud and 15 years for corruption.

The sentences will run concurrently, and the two will effectively spend 15 years in prison. 

Mphushomadi, the former IT senior manager at Ekurhuleni, was given a 10-year prison sentence, of which four years were suspended, for money laundering.

SIU spokesperson Kaizer Kganyago said in a statement that Mphushomadi had received the proceeds of crime to the value of R3 365 574.02.

"[The] two entities that were used to commission the crime, Meropa Sechabeng Technology CC, represented by David and Nanga Transport CC represented by Princes Dlongolo, the wife of Mphushomadi, were each given a fine of R600 000 wholly suspended for five years.

"[The] SIU probe in Ekurhuleni revealed that Meropa was fraudulently awarded a tender for the supply and maintenance of computer components. Meropa, together with bid adjudicators, failed to disclose a conflict of interest contrary to Ekurhuleni's bid policies, which provided a strict list of measurements to combat abuse like fraud, corruption and favouritism.

"David, sole director of Meropa, declared during the bidding process that he had no relationship with persons in the service of the State or who may be involved in the evaluation and adjudication of the bid. Unbeknown to Ekurhuleni at the time, David was related through marriage to Singh, the executive director of the Information Technology (IT) department and influential person in the awarding of the tender."

Kganyago said Singh had resigned and joined Meropa shortly after the bid was awarded.

ALSO READ | SIU confiscates property, luxury vehicles worth R21.8m from City of Ekurhuleni

He said Mphushomadi, a senior manager within the IT department at the time and a member of Nanga, was involved in the allocation of the tender.

"It emerged during the investigation that, shortly after the tender was awarded, Nanga purchased a number of Mercedes-Benz trucks close to R4 million, paid for by Meropa from the money received from the City. Meropa also splashed out around R8 million cash from the City tender on 16 luxury vehicles. In February, the commercial crimes court-ordered [those] assets seized by the Asset Forfeiture Unit in April 2012 be forfeited to the State.

"The outcome of the Specialised Commercial Crime Court is a continuation of [the] implementation of the SIU investigation outcomes and consequence management to recover financial losses suffered by State institutions and hold those responsible to account for the actions through a justice process in accordance with the SIU Act 74 of 1996."

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