Fraud, 60 charges and a web of payments - the state's case against Free State asbestos 7

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Olly Mlamleli was ousted after numerous service delivery and administration failures.
Olly Mlamleli was ousted after numerous service delivery and administration failures.
Mlungisi Louw
  • Seven accused, including former government officials and businessmen, appeared in court on Friday facing fraud, corruption, money laundering, and theft charges.
  • This relates to a much-publicised R255 million asbestos project in the Free State.
  • One of the accused is former MEC and senior ANC official Olly Mlamleli, who was recently ousted as Manguang mayor. 

Before a stitch of work was done, the Free State human settlements department paid businessman Edwin Sodi's company Blackhead Consulting R51 million for a dodgy asbestos audit project that has become mired in corruption, fraud, theft, and money laundering. 

The state has laid out 60 damning charges against the seven accused, arrested this week in relation to a R255 million contract, including corruption, fraud, money laundering, contravention of the Prevention and Combating of Corrupt Activities (Precca), and contravention of the Public Finance Management (PFMA) acts.

In the 39-page indictment, the state alleges that Sodi, his company Blackhead Consulting, and Diamond Hill Trading received advance payments totalling R51 million - even before they had started the job. 

READ | Free State asbestos case 6 arrested face 60 charges one suspect still at large

In the document, the state argues that in October 2014, Nthimotse Mokhesi, who stands as accused number one and was head of department at human settlements at the time, appointed Sodi’s Blackhead Consulting and Diamond Trading as a professional resource team to eradicate asbestos in the province.  

The state notes that from the onset prices were inflated. 

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In August, Sodi subcontracted the work to Joseph Radebe and a company named Ori Group at a cost of R44 million.

They further subcontracted the work to accused Abel Manyeki at R21 million.

The state alleges that legal duty existed on Sodi, John Matlakala, the supply chain management director, the then MEC Olly Mlamleli, and human settlements director-general Thabane Zulu to comply with the regulations of the PFMA, as well as Treasury regulations.

The state further alleges in its indictment that the legal duty existed for the four to disclose the deviations from non-compliance with the department's prescripts, stipulations in the PFMA, and the Treasury regulations, or to disclose the personal and business relationship between themselves and Sodi or companies which he was involved in or owned. 

In July 2015, an auditor-general report on the department of human settlement showed that the contracts were irregular. 

The report further detailed how a further R139 000 000 was paid by the department to Sodi and Diamond Trading. 

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The state argues that during the period 2014-15, "the accused individually or collectively and falsely and with intent to defraud explicitly and tacitly through words or conduct failed to act, pretended to the department of human settlement and Treasury that the contracts were legitimate, proper procurement process were followed, that no personal or financial interest was gained by the government officials, all monies paid were legally due, no fees were inflated and the work that formed the basis of the contract was completed". 

"Through the aforementioned misrepresentations and omissions, the accused individually and collectively persuaded the department of Human Settlement and Treasury department to its actual or potential prejudice to award the contract outlines in the preamble and to pay an amount of R230 million of a total contract amount of R255 million to the accused as outlined in the preamble."

The state detailed how payments were processed by the human settlements department to Blackhead Consulting until August 2016. 

In December 2014, the company received its first payment of R20 million with a further R31 million in January 15, 2015.

In March, Blackhead Consulting was paid R25 million, R15 milllion in June, R36.5 million in August. In 2016, Sodi’s company received a total of R102.5 million - R10 million in January, R15 million in April, and a further R77.5 million in August.


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