FORMER CITY OF CAPE TOWN EMPLOYEE APPEARS ON FRAUD, CORRUPTION, AND MONEY LAUNDERING
The Bellville Commercial Crimes Court has postponed the case against former City of Cape Town employee, Paul Mathew Hatting, charged with fraud, corruption, and money laundering for him to consult with his lawyer following his first appearance this morning. The State alleges that Hattingh, who was a member of the Bid Evaluation Committee (BEC) hid his conflict of interest and recommended that a R49,992m tender for supply and delivery of refuse black bags be awarded to C’Est Gyms. In return, the company awarded the tender and paid R10, 4 million into the bank account of his company, of which he was a sole director and had signing powers. He then used the money for his benefit,
Hatting was employed as an Administrative Officer 2: Supply Chain Management at their Ndabeni store since 1 March 2002. He was a storekeeper and technical advisor and knew who the City of Cape Town’s service providers were. On 18 April 2008, he bought Cosmic Gold Trading 517 from his son’s mother. This was a shelf company registered for general trading in all aspects. He was appointed a member of the City of Cape Town BEC in May 2009. The BEC’s role is to evaluate and provide the Bid Adjudication Committee (BAC) with a recommendation on who ought to be awarded a tender by the City of Cape Town. The BAC then awards the tender to the successful party.
The State alleges that Hatting together with other persons unknown to the State conspired, agreed, and decided to embark on an initiative to influence the tender process of refuse bags or ordering of refuse bags by the City of Cape Town from C’Est Gyms and that C’Est Gyms will regularly pay money into his company’s bank account. C’Est Gyms was registered as a close corporation with Ms. Shu Wei Lu and Ms. Irene September as members. September did not actively participate in the running of the company; Lu conducted the day-to-day operation of the business. The company was a registered service provider to the City of Cape Town on 4 January 2006.
Members of the BEC are required to sign a Conflict-of-Interest Declaration form in which the member declares any conflict of interest he/ she may have or has in respect of a tender being decided on. Where a conflict of interest may arise, the member is required to recuse himself/herself for the BEC to determine whether such conflict has any impact on the tender process. The BEC recommended on 16 September 2008 that the tender for the supply and delivery of refuse bags be awarded for two years from 1 November 2008 to 31 October 2010 to four companies including C’Est Gyms CC.
Hatting signed a conflict-of-Interest Declaration and Undertaking of Confidentiality, dated 16 September 2008 in his capacity as a member of the BEC where he declared that he does not have any direct or indirect interest in respect of any of the tenders or bidders for the tender, any financial interest (shares in companies, memberships in close corporations, partnerships, and directorships, etc.) in the tenders or bidders for the tender. He also declared that he does not have any immediate relatives or acquaintances (including spouse, partner, business or other associate and/or close family member or friends) with a financial interest in the subject, any personal bias or inclination which would in any way affect his decisions about the subject, any personal obligation, allegiance or loyalty which would in any way affect his decisions about the subject and any personal social benefits or financial gain that may come about as a consequence of the award of a contract.
The State further alleges that he benefitted from these misrepresentations more than R49 million, to the actual or potential prejudice of the City of Cape Town and/or other tenders and/or the public. He used his benefits for personal expenses as there were inter alia 87 transactions to the value of over R 800 000, under the name of PM Hattingh, 39 cash withdrawals to the value of over R 2.2 million, and payments made to Mercedes Benz and McCarthy Toyota. Funds were also transferred to companies he had a relationship with, such as six transactions to Cosmic Gold 532 to the value of R216 000, 19 transactions to Park Boulevard Traders to the value of over an R2million, and 5 transactions to Ttanc Trading to the value of R224 000. This constituted money laundering.
The case has been postponed to 26 June 2023, for him to consult with his lawyers. The State has furnished the defense with further particulars and a copy of the docket.
