Inside the 2,786-count fraud and corruption indictment against former eThekwini mayor Zandile Gumede and her co-accused
The indictment against former eThekwini mayor Zandile Gumede and her co-accused in the multimillion-rand Durban Solid Waste (DSW) fraud and corruption case details how Gumede – now a sitting member of the KwaZulu-Natal legislature – allegedly received R2,881,350 in kickbacks between January 2017 and July 2019 for ensuring predetermined businesses benefited from waste contracts.
The long-anticipated indictment has been two years in the making, and reveals how the waste contract process was manipulated to benefit the implicated service providers, connected eThekwini employees and ANC councillors, and how Gumede deciding on who the contract went to – including those in the infamous Radical Economic Transformation faction of the ANC – was allegedly aimed at increasing her political clout and personal bank account.
Daily Maverick was told at the courthouse that the extent of the corrupt spending had been revised down from R430-million to about R320-million, excluding VAT.
The 324-page indictment was handed over to defence teams acting for the 22 accused – which includes five companies – in the Durban Specialised Crimes Court on Tuesday.
Included in the indictment are three sitting eThekwini ANC councillors, Mthokozisi Nojiyeza, Bhekokwakhe Phewa and Sduduzo Khuzwayo, who were arrested only last week.
They were part of Tuesday’s full line-up, which stretched from the dock and over three court benches. Gumede (Accused No 16) was flanked by her ANC eThekwini Region acolyte – and former eThekwini councillor – Mondli Mthembu (Accused No 15), and city manager Sipho Nzuza (Accused 17). Nzuza’s wife is Accused No 18.
Accused No 1 is Robert Abbu, now retired, who at the time of the alleged crimes was DSW’s deputy head for strategic and new developments.
Accused No 2 is Sandile Ngcobo, who at the time of the alleged crimes was the chairman of eThekwini’s Bid Adjudication Committee.
As previously detailed by Daily Maverick, Ngcobo was shifted to the municipality’s disaster management unit in October last year to circumnavigate his bail conditions.
The remainder of the accused are the companies, their representatives and businessmen Hlenga Sibisi and Craig Ponnan.
The indictment lists the “main role players” as being Abbu, Ngcobo, Sibisi, businessman Zithulele Mkhize of Uzuzinekele Trading, Bongani Dlomo of Omphile Thabang Projects, Ponnan, Mthembu, Gumede and Nzuza.
Senior State prosecutor Ashika Lucken told the court that at “last count”, there were 2,786 counts against all of the accused.
Charges include fraud, fraud by omission, corruption, contravention of the Municipal Finance Management Act, contravention of the Prevention and Combating of Corrupt Activities Act, contravention of the Organised Crime Act and contravention of the Local Government: Municipal Systems Act.
The matter stretches back to 2016, when a 2013 contract using 27 suppliers to supplement the “refuse collection capacity” of DSW was set to expire and needed to be renewed.
Abbu was responsible for initiating the supply chain management (SCM) process to ensure service providers were chosen for the new contract, something he should have started about a year before the old contract expired. But he allegedly allowed the process to stall, despite numerous reminders and pleas from his colleagues.
When a call was finally put out for the contract, just months after Gumede had been inaugurated as mayor in August 2016, about 1,088 quotes were received from potential service providers. According to the indictment, “Abbu did not cause these quotations to be evaluated” so that service providers could be appointed for the new contract.
The State further alleges that Gumede had told the ANC councillors who were inaugurated with her that “the time for radical economic transformation (RET) had arrived”, and that then councillor Mthembu (Accused No 15) would explain how RET would be implemented at the municipality.
Gumede and Mthembu later “informed the councillors that the old DSW contract was due to expire [and] that four contractors would be appointed for the new DSW contract, and that Community Based Contractors (CBCs) would be appointed as sub-contractors to the four main contractors”, according to the indictment.
Gumede and Mthembu enabled large numbers of ANC ward councillors, ward committee members, members of business forums and organisations like the MKMVA and Amadelangokubona, to benefit financially from the new DSW contract, thus increasing the possibility of being favourably regarded in the political arena by these beneficiaries because of the continued benefit that they received.
The duo also allegedly told the councillors to go to their wards and find “between four and five” community-based contractors. Of these, one each was to be “used as a vehicle through which the respective ward councillors could benefit from the payments that would accrue from the main contractors….”.
According to the indictment, “Gumede and Mthembu instructed that the remaining CBCs should be appointed for the benefit of the other structures of the ANC and business forums like Amadelangokubona Business Forum and the MKMVA.” These meetings took place between September 2017 and December 2017.
It was stipulated by the duo that only CBCs that had ANC members as directors or members should be used, and that they had to be aligned to “a certain faction of the ANC”, presumably Gumede’s and by extension, that of former president Jacob Zuma.
Freshly arrested councillors Nojiyeza, Phewa and Khuzwayo (Accused No 20, 21, and 22 respectively) were described by the State as being part of the RET “process”.
It was in October 2017, according to the State, that municipal manager Nzuza had appointed Abbu as “Head Special Projects” – a post that had not previously existed – on the instructions of Gumede and Mthembu. Abbu was appointed to the post to circumnavigate his DSW line manager, Ray Rampersad, and therefore speed up the awarding of the contracts to the four companies, using “special projects” to do so.
About a month after being appointed to head up the specifically created special projects post, Abbu “compiled a request to deviate from the formal SCM processes of eThekwini and to invite quotations from suppliers for the new DSW process”, according to the indictment.
The deviation request was tabled before the Bid Adjudication Committee, which was chaired by Accused No 2, Ngcobo. The request was approved, despite the earlier mentioned 1,088 bids already having been received. In other words, the perception of an unnecessary emergency situation was forced.
Nevertheless, a further 475 quotes were received after the deviation was approved. A day before the closing date for the bids, Abbu again sought a deviation for the same contract. The submission was signed by Abbu and Ngcobo on 12 December 2017. Ngcobo then took it to the Bid Adjudication Committee and it was approved.
On 18 December 2017, the companies Uzuzinekele (Accused No 6), Ilanga La Mahlase (Accused No 3), Omphile Thabang (Accused No 8), and El Shaddai (Accused No 11) were invited to submit bids “to the exclusion of all other service providers”, and won the contract.
And, according to the indictment: “some of these service providers were not registered on the supplier database of eThekwini or the Central Supplier Database of the National Treasury”, which was a prerequisite and was also used as a database for the contact details of suppliers.
Furthermore, cellphone records show that when decisions were being made about the new tender, there was communication between Gumede, Mthembu, Nzuza, Ngcobo, Abbu, Sibisi, Craig Ponnan (Accused No 14) and the directors and members of the four companies.
The State alleges that the cellphone records further show that there was communication between the accused “long before being invited to submit quotations”.
The State also found that several invoices claimed by the companies were seriously questionable and should have raised red flags.
In one example, a claim for “16,000kg of refuse was claimed to have been disposed of by a passenger vehicle with a 1.6 litre engine on several occasions”, while in several others, the vehicle tracking data of some vehicles that were reported to be doing waste collection showed the vehicles in completely different locations.
“On occasion, vehicles belonging to DSW were used to support claims in respect of the main contractors.”
Nevertheless, an amount of R45-million had been budgeted for the contract, which was to run over three months. But Gumede and Mthembu (as Exco members) and Nzuza approved the extension of the contract and the cost overrun. The contract value eventually ballooned to an amount of R320,995,973.33.
According to the indictment: “The combined conduct of Nzuza, Ngcobo, Abbu, the officials of eThekwini employed at the landfill sites… and the nominated service providers appear to be synchronised to one objective. If the participation of any one of these role players was absent in the transactions under review, Gumede and Mthembu would not have been able to fulfil the objective that they had communicated to the councillors in relation to the new DSW contract.”
The State described the actions as “carefully planned” and running over about 18 months.
The result of this, according to the indictment, was that “Gumede and Mthembu enabled large numbers of ANC ward councillors, ward committee members, members of business forums and organisations like the MKMVA and Amadelangokubona, to benefit financially from the new DSW contract, thus increasing the possibility of being favourably regarded in the political arena by these beneficiaries because of the continued benefit that they received”.
Furthermore, “the cash flow analysis reveals that Gumede, Nzuza, Ngcobo and their family members received benefits from the four main contractors of the new DSW contract during the period of the contract”.
According to the indictment, so brazen were the backhands that the lead contractors made several electronic bank transfers directly to Gumede and her daughter’s bank accounts which, it is alleged, paid for items that included bricks for the former mayor’s home, trips to the optometrist, vehicle repairs and R48,650 worth of airtime for Gumede’s cellphone.
A further R150,000 was paid by contractor Illanga to Selby Gumede, who the State claims was linked to Zandile Gumede’s eponymous foundation, and another R100,000 was transferred by three of Gumede’s co-accused into the Standard Bank account of the ANC eThekwini Region “in favour of Gumede”.
There is also a payment of R824,450 that was deposited into Gumede’s bank account by a “person known to the State”.
In another entry the indictment states that “K. Hlela paid R1,6-million for Gumede’s rent home [sic] at 47 Illchester Avenue, Sunningdale”. This was the address Gumede listed as her primary address on her bail application in May 2019. It is unclear who “K. Hlela” is.
The matter was transferred to the Durban High Court for a pretrial hearing, which is expected to take place on 14 June. All of the accused remain free on bail of varying amounts. DM
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