Special Investigating Unit on arrest of nine accused in Alfred Nzo District Municipality corruption scandal

The Special Investigating Unit (SIU) welcomes the arrest and court appearance of nine individuals and two business entities in connection with the irregular yellow fleet procurement contract between Kwane Capital (Pty) Ltd and the Alfred Nzo District Municipality (ANDM) in the Eastern Cape province. The accused appeared before the EmaXesibeni (Mount Ayliff) Magistrates’ Court on charges of fraud, corruption, money laundering, and contravention of the Municipal Finance Management Act (MFMA). The Yellow fleet refers to six trucks, six sprinkler water tankers, and three jet vacuum tankers that were meant for water supply, sanitation and infrastructure support in the municipality.

These arrests follow referrals made by the SIU to the National Prosecuting Authority (NPA) after uncovering evidence of serious maladministration and corruption during its investigation under Proclamation R36 of 2017.

The accused include:

• Mcebisi Rudolf Mlonzi, Director of Kwane Capital
• Bambangazibini Tabata, Kwane Capital employee
• Former ANDM officials Xolani Masiza, Paul Mahlasela, and Zuko Mani
• Former Avis and Barloworld employees Clive Else and Shawn Govender
• Monalitho Muba and Xola Bomela, together with their company Chumani Water Solutions

The accused were granted bail of R10 000 each.

The SIU investigation revealed that the ANDM paid R75 million to Kwane Capital for trucks, water tankers, and jet vacuum tankers without budget approval and in contravention of Regulation 32 of the Municipal Supply Chain Management Regulations. Kwane Capital misrepresented ownership of the vehicles, unlawfully used the name of Avis Fleet and induced the municipality into contracts that were invalid and unlawful.

Fraudulent licensing and vehicle examination were also uncovered, with roadworthy certificates issued despite GPS data showing the vehicles never attended testing stations. The municipality suffered an actual or potential financial loss of R60.7 million due to overcharging and excessive profit margins.

The SIU has instituted a civil action in the Special Tribunal to review and set aside the contract and to recover losses suffered by the municipality.

In line with the Special Investigating Units and Special Tribunals Act 74 of 1996 (SIU Act), the SIU refers any evidence of criminal conduct uncovered during its investigation to the NPA for further action. The SIU is also authorised to initiate civil proceedings in the High Court or a Special Tribunal in its name to correct any wrongdoing uncovered during its investigation and to recover financial losses suffered by the State, including funds paid for services not rendered.

Enquiries:
Spokesperson
Kaizer Kganyago
Cell: 082 306 8888
E-mail: KKganyago@siu.org.za

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