Magistrate Garth Davis, who on Monday said he had never seen “so many zeros” relating to the amount of alleged fraud involving eThekwini metro’s Durban Solid Waste (DSW) unit, had stern words for the city’s municipal manager, Sipho Nzuza, during his appearance in the Durban Commercial Crimes Court for violation of his bail conditions. 

The metro’s opposition councillors and members of the public have pilloried Nzuza for his insistence on maintaining control of some municipal matters that he should no longer be involved in because of the criminal charges he is facing and his accompanying bail conditions. 

An arrest warrant was issued for Nzuza last week for the bail contraventions, signed by Davis.  

Nzuza is out on R50,000 bail for his alleged role in the R430-million DSW tender case involving former eThekwini mayor Zandile Gumede, senior councillor Mondli Mthembu, high-ranking officials and suppliers. 

Although it is clear that Nzuza has turned State witness, the alleged fraud and corruption happened under his watch as the accounting head. Among other things, it has been alleged by the State that service providers were paid millions for work not done. 

The State on Monday made it clear that Nzuza had violated at least two of his stringent bail conditions, which were set on March 10 and agreed upon by the State and defence. 

The Hawks’ lead investigator in the case, Lieutenant-Colonel Frank Mphaki, told the court that Nzuza had been signing off on award letters for tenders, attending virtual meetings in which some of the witnesses against him were present, and had also sought, in writing, weekly updates from the two senior officials delegated to take over some of his responsibilities so that Nzuza would not be in violation of his bail conditions.

Mphaki said Nzuza had “chaired a virtual management meeting of eThekwini Municipality where senior officials of eThekwini were in attendance. The agenda [included], among others, progress reports on the reports of [the City Integrity and Investigations Unit – CIIU], progress on consequence management, supply chain management [SCM] and finance-related matters”. 

“In respect of matters related to the CIIU, the meeting discussed new and finalised cases of the CIIU and an update on disciplinary proceedings. 

“On the SCM-related matter, the meeting discussed an ongoing security tender and Nzuza requested an update on the status of the tender process.” 

The CIIU, among other things, investigates alleged maladministration and corruption within eThekwini Municipality. 

Mphaki said that although Nzuza had delegated authority to the two senior managers for SCM functions, “the authority appeared to remain with Nzuza in that he required that each decision taken in relation to the delegation be reported to him on a weekly basis”. 

Despite the letters of delegation, Nzuza continued approving award letters for various tenders, said Mphaki. 

You need to understand what the court is trying to do; it is not to punish you, but to prevent something from happening that will undermine the administration of justice. Regarding the charges of tender fraud, [having] witnesses report to you is a very uncomfortable situation.

The two senior officials who had been delegated his powers are among the witnesses in the case.  

Davis told Nzuza the matter of him contravening his bail conditions – as has been widely reported – had “festered”. 

“You need to understand what the court is trying to do; it is not to punish you, but to prevent something from happening that will undermine the administration of justice. Regarding the charges of tender fraud, [having] witnesses report to you is a very uncomfortable situation.” 

Advocate Griffiths Madonsela SC was representing Nzuza. He was accompanied by advocate Credo Mlaba and two juniors. Davis implied it was difficult to believe that with such an extensive and experienced team, Nzuza failed to comprehend his bail conditions.  

Madonsela said there had been no “mischief making” on Nzuza’s part. Instead, the municipal manager was performing his duties according to the terms of delegation of powers as found in the Municipal Finance Management Act (MFMA). “We used the words of the act [as reference],” said Madonsela. 

According to the act, even though he had delegated some of his authority, Nzuza still had to “oversee” what was being done, Madonsela added. The “dilemma” was with the “language” of the act as interpreted in the bail conditions. 

But the magistrate was not convinced. “Why, when there were difficulties with [the interpretation of the] act, did he not go to his legal team, and then approach the lead prosecutor, and say: ‘We need to resolve this, we are not sure what to do?’” 

That probably should have happened in “hindsight”, Madonsela eventually said. “We could have placed it before court to resolve the matter.” 

Prosecutor Hazel Siraramen said it was the State’s contention that there had indeed been a violation of bail conditions, and that Nzuza saying his “hands were tied” because of the act was simply not good enough. 

Echoing Davis’s words, she said: “[Nzuza], as a recourse, could have come back to court for clarity.” 

It was eventually agreed that paragraphs nine and 11 of the original bail conditions would be amended. 

Your client needs to understand, we can’t lose sight of the fact. I am quite old, I have never come across a charge sheet with so many zeros in it, such large numbers emanating out of this council, for fraud matters. It’s a large amount of money.

These entailed Nzuza refraining from involvement in any disciplinary issues “completely until this condition is reviewed by this court on or before 10 December 2020”, as opposed to the earlier condition, where he was restrained from involvement in disciplinary cases that involved officials charged in relation to the DSW matter. 

Paragraph 11 of the original bail conditions still stood, she said, and in addition, Nzuza was to, “notwithstanding several sections of the MFMA, as well as municipal supply chain regulations, in particular Regulation 5, not participate directly or indirectly in any or all supply chain management processes irrespective of the amount of the tender value of the tender concerned”. 

Davis told Nzuza there was enough prima facie evidence in the affidavit of Mphaki and the two others deposed by the senior officials, to “worry anyone”.

“I am going to use a ridiculously simple example of why it would worry anybody, that one extrapolates to the bigger picture in matters such as this, which are highly complex and involve large quantities, but the principle remains the same. 

“Nowhere in this building would you find a handyman, for example, from a crèche, charged with abusing children, allowed to remain at work. For absolute obvious reasons… because protection of witnesses, the safety of witnesses, prevention of crime going on, are all relevant considerations. 

“In respect of your matter, there was a spirit [of agreement] in proceedings [for bail conditions], of which you were fully aware, because you are represented by a senior counsel and an advocate. The prosecution consists of two senior State advocates. There are a lot of very senior people in this room. You have access to some of the best legal advisers in the world. 

“But in respect of your bail conditions, it comes with a cost that can’t be measured in money. If you breach your bail conditions, you run the risk of your bail being cancelled, you are then detained in custody until your trial is heard.  

“History tells us corruption matters take a long time to finalise. The more high profile, the longer it takes; the more money that the litigants have, the longer it takes. That’s just an unfortunate reality.” 

It was “untenable” that senior city officials who were witnesses in the case against him were still reporting to Nzuza, said Davis, “even if the process is required by the governing regulations and statute. At least now, the die is cast, you know exactly what it required.” 

Davis told Madonsela it was “implicit in the spirit of the entire [bail] agreement” that witnesses felt they were being catered for, that there was no opportunity for interference in processes, and that Nzuza “would not sign off on tenders”. 

“Your client needs to understand, we can’t lose sight of the fact. I am quite old, I have never come across a charge sheet with so many zeros in it, such large numbers emanating out of this council, for fraud matters. It’s a large amount of money. 

“Some of the witnesses [in the case against him] are submitting reports to him [at work]. That goes against the spirit of what was being sought to achieve.”

Nzuza was released from custody, and his original bail amount reinstated. He is set to appear with Gumede and the other accused on December 10. DM