NPA OBTAINS R102 MILLION RESTRAINT ORDER AGAINST FATHER AND SON AND OTHERS LINKED TO SAPS CONTRACTS.
REPOTER: TSHEPO C MOLOTO: The NPA’s Asset Forfeiture Unit (AFU) has been granted a restraint order on 28 April 2023. The order was served on the defendants earlier today. The National Prosecuting Authority is seeking to recover an amount of R102 million from the persons who were unlawfully awarded contracts by the SAPS.
The 45 persons whose assets have been restrained are facing charges relating to 53 contracts that were unlawfully awarded to the 26 companies. The state is alleging that companies that are effectively owned and controlled by Kishene Chetty and his father, Krishna Chetty were unlawfully awarded contracts by the SAPS. It is alleged that fraudulent Broad-Based Black Economic Empowerment (BBBEE) certificates were submitted in support of written price quotations, and that the 26 companies were involved in cover quoting. Members of the SAPS Supply Chain Management division allegedly colluded with the Chetty family and defrauded the SAPS of tens of millions of Rands.
The Gauteng High Court, Pretoria granted the restraint order on 28 April 2023, calling upon the accused and those who may claim to have interest in the restrained property, cited as Respondents, to show cause on the return date why the order should not be made final.
The restraint order attempts to recoup any benefit the 45 accused natural persons (including several members of the SAPS), 26 implicated companies may have derived, received, or retained from the two open tenders and 48 contracts awarded pursuant to invitations of written price quotations. Written price quotations were sourced from companies that are effectively owned and controlled by Kishene Chetty and his father, but having other people listed as sole directors.
The accused, cited as Defendants, were found by Justice Mlotshwa to have acted collusively in making false and fraudulent misrepresentations in their tender bid to the police, as a result of which two national tenders, valued at R59 million and R29 million plus 48 contracts worth R9.8 million, which fell under the R500 000 threshold, were awarded.
The R59 million tender (markings case) was for branding of police vehicles. One of the companies that were awarded contracts has a white woman listed as the sole director who misrepresented that she was an African female. Vatika was 100% white female owned, and the latter did not meet the requirements to be exempted as a micro-enterprise because it had, at the time, an annual total revenue of more than R38 million for the year 2018.
On receipt of the funds paid by the SAPS in relation to the tenders, Vatika, Kgotho and Isimbali laundered most of the funds to other companies beneficially owned by Kishene and Krishna Chetty. R59 million in total was paid to Vatika and Kgotho, despite the fact that the financial implications of the tender were only R50 million. The latter amount included Value Added Tax (VAT).
Both the SAPS and the South African Revenue Service (SARS) allegedly suffered actual financial prejudice, as several of the 26 companies were registered as VAT vendors but misrepresented to the SAPS that they were “NOT VAT VENDORS”. In so doing they allegedly eluded to pay VAT and Companies Income Tax (CIT) to SARS.
The accused are facing prosecution and will appear at the Pretoria Regional Court again on 06 December 2023. ‘’The NPA frowns upon such alleged concerted criminality and will continue in the fight to rid government of corruption. We will not hesitate to use our asset recovery powers to reclaim the State. The obtaining of the restraint order has been made possible by full cooperation and collaboration between the police, ID, and AFU,’’ says DNDPP: AFU, Adv. Ouma Rabaji-Rasethaba.
RELATED COURT ORDER
On 21 May 2020, the AFU obtained a freezing order based on the fact that the credit balances and interest accrued in the bank accounts were proceeds of unlawful activities (i.e. fraud and/or money laundering in contravention of Chapter 6 of the Prevention of Organised Crime Act (POCA); and that the bank accounts were instrumentalities of the offence of fraud and/or money laundering. The AFU viewed the deposits into the four service provider companies’ bank accounts as another looting of state coffers.
The tainted bank accounts were subject to a preservation of property order, granted by Justice Tuchten of the Gauteng High Court, on 18 December 2018, where he ordered that all accounts should be placed under the control of FNB and Standard Bank. In April and May 2022, the banks deposited
R8.9 million into the Criminal Assets Recovery Account (CARA), which was utilised to bolster the work of law enforcement.
Acting Justice Barnard, when granting the forfeiture order, remarked that he was convinced that all the four service provider companies were involved in a well-orchestrated scheme to defraud the police, and to launder the money to ensure that the origin thereof was not detected. The four companies failed dismally to provide any proof of services they had rendered to the police.
