The South African Police Service (SAPS) is at the centre of irregular expenditure on COVID-19 activities to the tune of more than R1-billion, which saw some its employees cashing in on the fight against the virus.
More arrests related to the looting of the cash set aside by government to fight against the spread of coronavirus are on the cards.
Sunday World can exclusively reveal that three of the country’s major banks have referred over R1-billion in suspicious transactions related to COVID-19 expenditure to the Fusion Centre, a multidisciplinary law enforcement team recently set up by President Cyril Ramaphosa to probe corruption in activities to fight the virus.
The Fusion Centre comprises the Special Investigating Unit, State Security Agency, SAPS, the Hawks and the Financial Intelligence Centre.
FirstRand, Absa and Nedbank have flagged dozens of transactions involving government institutions such as SAPS, which accounted for 70% of irregular payments related to COVID-19.
Three intelligence reports from the banks, which Sunday World has seen, paint a grim picture of a free for all in COVID-19 procurement.
FirstRand has flagged R721 million suspicious PPE contract payments made by SAPS, while Absa has raised concerns over similar payments to the tune of R355 million. An analysis of many of the banks’ statements shows that almost immediately after receiving the windfall from government institutions, the entities quickly transferred the cash to various accounts, raising suspicion of money laundering.
Many of the companies were not involved in health care business or were formed after the outbreak of the global pandemic to cash in on tenders.
In the Absa report, Wilhelm Grassman, the head of the bank’s financial crime intelligence unit, noted in his overview that 90% of COVID-19 funds received by beneficiaries were transferred after the initial deposit.
Grassman noted that only 5% of the deposits were used to buy personal protective equipment, while 40% of the cash was transferred to directors.
He said a company run by SAPS employees, Makhule Technology Consultants, was paid the highest COVID-19 related deposit in June.
Makhule received close to R132 million, which saw its turnover move from R120 000 last year to R160 million to date.
The directors of Makhule are Johannes Furstenburg and Desiree Kakora.
“According to information on their personal portfolios, they both work for the SAPS,” Grassman said in his report.
A company called Be For Sunset Trading and Projects 107 received R60 million from SAPS. Its balance before the deposit was a paltry R84.
Basadzi Pele Management Consulting and Projects scored a R93 million tender from SAPS in May. Its turnover last year was just over R6 800. The company’s turnover was now more than R112 million.
The FirstRand report states that it has referred 30 matters relating to irregularities in coronavirus expenditure to the tune of R1.13 billion to the Fusion Centre (including payments made by SAPS).
FirstRand flagged payments, among others, made to Edladleni Trading and Projects (R514 million from SAPS).
FirstRand also raised a red flag on payments that were made to Ledla Structural Development and Royal Bhaca Projects, the company that belongs to Ramaphosa’s spokesperson Khusela Diko’s husband, Thandisizwe.
This week, the Hawks swooped on the Johannesburg offices of businessman Thulani Majola, in connection with an investigation related to the R77 million tender he was awarded in April to supply masks to the police.
Raising red flags about Majola, Nedbank in its report said: “Director politically exposed person [sic], large inflows from government and outflows to the ANC.”
Majola could not be reached for comment at the time of printing.
SAPS spokesperson Vish Naidoo did not answer specific questions on the rot within SAPS, but said “whatever information we needed to provide to Fusion Centre was provided”.
Popcru spokesperson Richard Mamabolo said his union wanted a speedy investigation into the allegations of irregular expenditure of Covid-19 funds.
“It is concerning that there are yet emerging allegations on the misuse of these funds aimed at fighting the Covid-19 pandemic, more so because in most instances, their purported aims were not fully achieved in most instances,” he said.
DA spokesperson on SAPS Andrew Whitfield said his party was calling for the establishment of a parliamentary ad hoc committee to investigate corruption in the SAPS.
He said the official opposition had asked questions in Parliament regarding Covid-19 procurement and answers from the SAPS left much to be desired.
“The DA is not surprised that SAPS has been implicated in Covid-19 corruption. SAPS is rotten to the core. The minister [Bheki Cele] often says it is a few rotten apples but I believe the whole barrel is rotten,” he said.
“General Sitole must do more to clean out the rot and restore the credibility of SAPS among members of the public,” he said.