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Cape Town - There is a possible case for collusion between
agriculture, forestry, and fisheries department officials and "others
outside the department", DAFF acting director general Sipho Ntombela said
on Tuesday.
The indications are that "something wrong has
happened", he told a media briefing on an Ernst & Young forensic
interim report on alleged procurement irregularities, specifically regarding
goods and services procured by the Marine Living Resources Fund from Smit
Amandla Marine Services Pty Ltd (SAM).
Ntombela emphasised that it was an interim report, and
further investigations would have to be done by the relevant authorities, which
could lead to action against the individuals concerned.
"At this stage, the report doesn't touch on any
individual who might have been involved.
"The investigation that would take place from now would
then look at those aspects. Is there a case of criminal intent on the part of
the people that were involved?... [S]o we don't want to pre-empt that kind of a
process," he said.
However, in a statement late on Monday, the department said
the investigation "confirms multi-billion rand corruption in vessel
management by SAM".
"The Ernst & Young forensic report confirmed
substantial evidence of irregular contracts awarded to SAM, or different guises
thereof, since 1995 until 31 March 2012."
The report revealed, among others, that the agreement
concluded in 2005 and subsequent extensions, between SAM and the department,
failed to comply with the tender board regulations, with departmental
procurement policies, National Treasury and income tax regulations, and the
Public Finance Management Act.
As an example, there was a contract extension entered into
worth millions of rands by mere letter, without any proof of any tender process
followed or supporting documentation.
"For instance, the contracts signed, particularly those
signed in 2000, 2005, and 2010 were irregular and were deliberately drafted to
have maximum benefit for SAM, amounting to approximately R1.6bn to R2bn.
"The state had no protection in any of these contracts
and the available evidence suggests complicity and corruption between
government officials and Smit Amandla Marine."
These extensions also exceeded the required number of years
for open tenders and were without any specified contract price.
This gave rise to substantial expenditure running into millions of rands, which was highly irregular in terms of the Public Finance Management Act.
"The evidence indicates that the state was defrauded to
the extent of approximately R1.6bn, which includes invoices of duplicate
payments, (and) invoices without tax or VAT.
"Invoices worth up to R600m have recently been
uncovered, (which were) hidden away from the investigators and could indicate
more extensive defrauding of the state. Furthermore, payments were made to SAM
as recently as after the termination of the contract, after March 2012,"
the department said.
The Cape Times on Tuesday quoted SAM director Sithembiso
Mthethwa as having said: "We dismiss these outrageous allegations and note
with dismay that after more than six months, Smit Amandla Marine has not been
approached by either Daff or any investigating body to respond to these
allegations, despite requests for dialogue.
"Once again, we call for a formal process to defend Smit Amandla Marine and to clear our name, and we reiterate our company's willingness to participate in an open and transparent investigation into our business practices," Mthethwa said.
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