Advocate and businessman back in court over R29m tender fraud

Courtroom gavel
Picture: Pexels

By Kaya 959 News

Two men who allegedly defrauded the Eastern Cape Department of R29 million are due back in the King Williams Town Magistrate Court on Wednesday.

Advocate Vuyokazi Sangoni is charged with fraud while businessman Poovandaren Chetty faces 16 counts of fraud, 18 counts of theft, and 15 counts of money laundering.

The two were arrested together with Stanley Khanyile, the former municipal manager of Sedibeng District Municipality, and former Head of Department (HOD) for the ECDSD.

Khanyile was shot dead on 3 October 2020 in Alberton.

NPA spokesperson, Anelisa Ngcakani, said in 2015 the department set out to establish and fund a women’s skills development centre in Lusikisiki

“The department identified an existing government infrastructure in Lusikisiki as a suitable place.”

Khanyile allegedly “flouted procurement prescripts and processes to ensure that Chetty was awarded the R14.4 million contract for establishing the centre”.

READ: Nine arrested for R53m City of Tshwane fraud

Procurement processes bypassed 

Khanyile allegedly bypassed procurement processes and on 15 July 2015, together with Chetty, signed a Service Level Agreement (SLA).

The agreement was deemed to have commenced on 01 April 2015 and was to endure for a period of 9 months until 31 December 2015.

“It is alleged that before the contract was signed, Chetty did not present a business plan to the ECDSD on behalf of Umnotho, which is a requirement for funding in terms of the department’s policy.

Ngcakani said between July and August 2015, the ECDSD paid just over R14 million  to Umnotho. Chetty was the only designated signatory to the bank account.

“For the 2016/2017 financial year, a tender was advertised by the ECDSD for the training and capacitation of co-operatives.

“Khanyile and Sangoni, are accused of colluding to ensure that Umnotho won the tender through unfair advantage in the procurement process. They allegedly flouted the prescripts of the procurement policy and did not follow normal departmental procedures,” Ngcakani said.

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 R15m paid to Umnotho

Umnotho was duly awarded the tender and on 3 May 2016 Khanyile and Chetty allegedly signed an SLA.

The second agreement was deemed to have commenced on 03 May 2016 and was to endure until 31 March 2017. The ECDSD paid just over R15m to Umnotho.

“It is alleged that Sangoni, in her capacity as a Chief Director in the office of the HOD, colluded with Khanyile to flout the procurement processes in order to ensure that Umnotho succeeded,” Ngcakani said.

Chetty allegedly used approximately R14 million from the Umnotho account for his personal benefit.

During August and September 2015 he allegedly bought a Rolex watch, a diamond ring, Porsche and Ferrari motor vehicles and gold coins valued at just over R1 million.

In November 2020, the Grahamstown High Court granted the NPA’s Asset Forfeiture Unit a final forfeiture order of about R19 million against assets that were allegedly proceeds of tender fraud.

The court order permanently forfeited to the state the following property:

• R12 177 771.26 credit balance contained in account, number 746 974 062 36 in the name of Umnotho Training and Development Trust.

• A Porsche 911 with registration number NJ439;

• R101 000 equity in the Land Rover Discovery with registration number ND 285;

• 52 Gold Kruger Rand Coins;

• Erf No 51 Wedgewood Old Cape Road, Port Elizabeth;

• Renovations for R1 045 649.60 value in property at 40 Swapo Road, Durban North, KwaZulu Natal;

• R2 000 000 and its interest and/or capital increase and dividends transferred from Umnotho Training and Development account, number FNB account 62547679285 and invested Allan Gray Investment account, number 62083093311 held at FNB, ledger account number AGLP565468.

• R500 000 and its interest and/or capital increase and dividends transferred from Umnotho Training and Development account, number FNB account 62547679285 and invested in Bitcoin invested at Luno Bitcoin company, FNB account number 62412967484.

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