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The Newcastle Municipality’s former Municipal Manager, Bhekani Errol Mswane, and the government entity’s former Chief Financial Officer (CFO) Bhekisisa Hlongwane, face charges of fraud, money laundering and contravention of the Municipal Financial Management Act (MFMA) totalling R7.8 million. The duo is being charged alongside Bonakude Consulting (Pty) Ltd and its Director, Velenkosini Lindokuhle Mtshali.
The suspects initially appeared in the Durban Specialised Commercial Crimes Court on 29 September 2022. As reported by Newcastillian News on 3 October 2022, KZN Regional Spokesperson for the National Prosecuting Authority (NPA) Natasha Kara explained that the state alleged that between 2018 and 2019, the men colluded to illegally extend an expired contract for Bonakude Consulting to provide consulting services to the municipality.
“It is also alleged that Mswane and Hlongwane contravened the MFMA by incurring irregular and wasteful expenditure,” Kara said at the time.
Moreover, Kara explained that further allegations showed that Mtshali and Bonakude Consulting received the proceeds of unlawful activities from Mswane and Hlongwane after they were paid for the non-existent contract.
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While the court granted them bail of R20 000 each, the legal proceedings are back underway yet again at the Specialised Commercial Crimes Court (SCCU) from 1 November 2022. According to reports, the State is clamping down on corruption cases, in which the above-mentioned matter was earmarked as a case of interest by the SCCU.
Furthermore, during a media briefing on Friday, 21 October 2022, the Director of Public Prosecutions in KwaZulu-Natal Elaine Zungu, said that all serious and complex corruption cases were being dealt with by the Specialised Commercial Crime Unit (SCCU)
The Unit is fully capacitated with:
- Three Deputy Directors of Public Prosecutions (one being a Regional Head)
- 14 Senor State Advocates (4 are on contract)
- Six Junior State Advocates
- Two Regional Court Prosecutors
- Six Administrative Officers
With the Unit enrolling 88 cases since the beginning of April 2021, Zungu explained, “Most of the SCCU cases involve Asset Forfeiture Unit (AFU). The reason for involving the AFU is to recover the money which was allegedly stolen and or properties bought from the usage of the stolen money. We are also involving the Tax Unit in some of our cases as we are looking at any contravention of the tax legislation in some of our cases.”
In addition to this, Zungu highlighted that the NPA was promoting a multi-disciplinary team approach in regard to how they approached complex corruption cases. Whereby, the division has focused on the enrolment of corruption cases especially those which will have an impact.
Due to corruption cases coming in from all over the province, Zungu emphasised that the Unit had recently enrolled several impactful cases involving corruption charges against government officials and private sector officials.
“We are focusing on the “clean audit cases” arising at Municipalities, as well as SIU (Special Investigating Unit)-referred cases. In some recent cases, SIU has also been engaged and also forms part of the PGI sessions. The reason for involving the SIU is because they have often conducted preliminary investigations leading to the referrals. They have also consulted with witnesses and or other persons of interest,” she elaborated.
The SCCU has also received 16 SIU referrals in this financial year. Six of these cases have been referred to DPCI (Hawks) to open case dockets.
“In three of the 16 referrals, we declined to prosecute. In seven of the SIU referrals, the Prosecutors are guiding the investigations. There are a total of seven SIU cases that are on the court roll,” added Zungu.
Moreover, it should be noted that in July 2022, President Cyril Ramaphosa signed a proclamation authorising the SIU to investigate allegations of corruption and maladministration against Newcastle Municipality’s previous administration.
In addition to the SIU investigating the affairs of the Newcastle Municipality, the President’s proclamation stated that any financial losses suffered by the State as a result of maladministration must be recovered.
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In fighting and uprooting corruption in KwaZulu-Natal, Zungu pointed out that the Chief Prosecutors in their respective Clusters, were requested to identify their 6 month priority corruption cases. Additionally, Chief Prosecutors have set up dedicated Prosecutors within their respective Clusters to deal with these cases. The High Court general section has also been given corruption cases to deal with.
In terms of working together, Zungu highlighted that there has been improved collaboration and engagement with the AFU.
In KZN, according to Zungu, the Prosecutors referred several matters to the AFU for them to determine whether the Unit would be successful in bringing applications for preservation orders in certain matters. Whereafter, the AFU recorded that it had received a total of 167 dockets.
“The Asset Forfeiture Unit with its asset recovery powers, is a key tool in the NPA’s fight against corruption and it will continue to do so diligently, especially in instances where state funds earmarked for service delivery are diverted for private gain. It is hoped that the restraint will result in the proceeds of this crime being recovered back to the State through forfeiture orders,” affirmed Zungu.
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