Category Archives: Nivashni Nair

The Times: I was just playing with him and then the gas came inside’ – father of dead infant

‘I was just playing with him and then the gas came inside’ – father of dead infant

Jeff Wicks And Nivashni Nair | 29 May, 2017, The Times

A teargas canister had been fired into the settlement‚ in Sydenham‚ as police tried to disperse protesting residents.

“I was just playing with him and then the gas came inside. My wife went out to see what was happening but then all the smoke was inside‚” Khoza said. He said his infant child was unable to breathe.

Corruption: Obed Mlaba & Mike Sutcliffe

eThekweni mayor fingered in probe

Former eThekwini Municipality mayor Obed Mlaba has been fingered in a forensic report on corruption in the municipality, it was announced on Tuesday.

The probe, commissioned by the provincial co-operative governance department, had uncovered maladministration and fraud, MEC Nomusa Dube told reporters in Durban.

The report found that the former mayor unlawfully influenced the supply of a waste volume reduction plant for a landfill site, she said, but did not elaborate.

It recommended that the process be started afresh as its integrity had been “grossly compromised”.

It also contained accusations against a number of senior officials, including former municipal manager Mike Sutcliffe.

Dube said the former municipal manager was found to have contravened the Prevention and Combating of Corrupt Activities Act by not reporting fraudulent and corrupt activities.

The investigation found that 10 councillors had business interests with entities which conducted business with the eThekwini Municipality.

The department has asked the municipality to urgently institute disciplinary action against all the officials and councillors implicated in the report.

The probe was instituted after Auditor General Terence Nombembe said in his 2009/10 that R532 million had been irregularly spent by the municipality.

Dube said irregular expenditure in the past three years amounted to R2.188 billion.

The investigation also found that the municipality had failed to comply with supply chain management processes for infrastructure and housing projects.

It identified excessive and inappropriate use of a section of the supply chain management policy which allowed municipalities to deviate from the normal tender process.

This was intended for use only emergencies, but the eThekwini Municipality had used it extensively for, among other things, housing developments.

It was found that some contractors given tenders in terms of this section received letters of appointment even before submitting tender documents.

Some contractors awarded tenders were not even registered with the National Home Builders Registration Council. Their work was so poor, the houses had to be demolished.

A lack of supervision during housing construction had also led to a waste of taxpayers’ money.

Dube said there was substance to allegations that 30 trainee metro police constables had been referred to illegal driving schools by Metro Police College instructors.

The matter was being investigated by the Hawks, she said.

Fourteen metro police officers were found to be running taxis.

“These police officers were identified because they had outstanding fines ranging from R5100 to R117 250,” she said.

The municipality has been given 21 days to respond to the report. It was expected to brief the media on Wednesday on the outcome of the investigation. – Sapa

Mlaba, Sutcliffe ‘corrupt’

Chris Makhaye

Former Ethekwini mayor Obed Mlaba and former city manager Michael Sutcliffe were among the top officials fingered for wrongdoing, corruption and maladministration in a damning forensic report released on Tuesday.

The two are now officially unemployed after their terms of office ended last year.

Last year, the audit firm Manase & Associates was commissioned by the MEC for cooperative governance to investigate allegations of massive tender rigging, fraud and corruption involving senior municipal officials.

The report was tabled by MEC Nomusa Dube in Durban yesterday. She said the report found irregular spending by the municipality over the last three years that amounted to more than R2.188bn.

The report further stated that there was non-compliance with the Municipal Finance Management Act and abuse of the urgent procurement policy in a bid to award contracts to certain “favoured” companies.

The report also found there was sufficient evidence that Mlaba used irregular and unlawful influence to award a contract in which he had personal business interests. This pertained to the tender for the conversion of waste to energy at Durban’s Bisasar Road landfill site.

Dube said the report also found Sutcliffe allegedly failed to report fraudulent activities to the police, thus contravening both the Municipal Finance Act and the Prevention and Combating of Corrupt Activities Act.

The report stated Sutcliffe only revealed these corrupt activities after more than a year, when he was questioned by investigators compiling the report.

Neither Mlaba nor Suttclife were available for comment.

At least 10 serving and former municipal councillors and more than 13 city officials are accused of corruption and breaking the law by trading with the municipality and not declaring their business interests.

The report advises disciplinary action be taken against the heads of both the treasury and housing for alleged failure to prevent irregular expenditure in the city.

Dube gave the municipality 14 days to act on the report and warned that her department would be keeping a close watch.

She would also ensure that tenders awarded irregularly and monies taken from the municipalities were returned.

Many parties have responded with outrage at the report. The ANC has welcomed the report and said that those officials responsible should face the full might of the law.

“The ANC will not tolerate any corruption and maladministration in municipalities and the provincial government, including ANC-led municipalities. Any form of maladministration only serves to delay the full emancipation of our people from the ravages of poverty and neglect. This we will not allow, irrespective of who the possible culprit may be,” said Sihle Zikalala, ANC provincial secretary.

The DA said the report showed that all was not well with the administration in the city.

“That so many senior officials have been named as being potentially guilty of irregular activities is proof that for far too long now Durban has been run by a coterie of seemingly corrupt individuals,” DA caucus leader Tex Collins said.

He called for all officials who have been named in the report to be placed on immediate suspension pending the outcome of internal disciplinary action or criminal action.

City bigwigs fingered
NIVASHNI NAIR | 08 February, 2012 0

Former Durban mayor, Obed Mlaba, former municipal manager Michael Sutcliffe, 10 councillors and several heads of department and employees have been fingered in a forensic investigation that found high levels of maladministration and corruption in the eThekwini Municipality.

The Manase report, which documents the findings of an investigation instituted by KwaZulu-Natal MEC for cooperative governance and traditional affairs, Nomusa Dube, was tabled yesterday.

It recommends that disciplinary action be taken against managers and employees in almost every department and that millions of rands lost through irregularities be recovered.

Mlaba and Sutcliffe will not face disciplinary action because they are no longer employed by the municipality, but Dube said “appropriate steps will be taken”.

The investigation came after the auditor-general found that the city had irregularly spent R535-million. At the same time the Ngubane audit implicated Sutcliffe and three other officials in irregular housing contracts, whereas Mlaba was alleged to have had shares in a company that nearly landed a R3-billion tender to convert the city’s waste to energy.

The Manase report has found that there is sufficient documentary evidence confirming Mlaba’s involvement in the Waste Volume Reduction Plant at the Bisasar Road Landfill site tender.

Dube said a company linked to Mlaba had allegedly expressed interest in a tender in breach of the municipal code of conduct.

The report says Sutcliffe, who controlled the city’s R25.9-billion budget, contravened the Municipal Finance Management Act when he allegedly failed to promptly report irregular expenditure emanating from dodgy housing contracts in writing to the mayor, MEC and auditor-general.

It has also found that Sutcliffe contravened the act when he failed to take reasonable steps to prevent irregular expenditure.

It adds that Sutcliffe contravened the Prevention and Combating of Corrupt Activities Act by not reporting fraud and corruption in a housing tender to police.

“The former municipal manager only reported this matter two years later, after interviews with the investigating team,” the report states.

The report has found that 10 councillors and 161 municipal employees had business contracts with the municipality.

“[The] council has swiftly and adequately dealt with disciplining all of the initially identified 38 officials. Similar action should be taken against the additional 123 identified employees,” Dube said.

The report has found that there was non-compliance and disregard for the act in several departments and an excessive and inappropriate use of Section 36 of Supply Chain Management policies, which allows heads of department to cite “emergencies” to forgo tender procedures and select their own suppliers.

The investigation has found high-level corruption in the housing department relating to low-cost housing tenders, which were irregularly awarded to unqualified contractors not registered with the National Home Builder Registration Council.

It has further found a “negligent” duplicate payment and the irregular award of tenders to fibre-optic cable suppliers.

The municipal’s human resources department has been implicated in irregularities pertaining to recruitment, selection and appointment of staff, while the electricity department has been found to have abused overtime.

Dube has given the municipality 21 days to respond.

The council is expected to comment on the report today.

Mlaba found to have unlawfully influenced tender

February 8 2012 at 11:57am
By Bheki Mbanjwa

Former eThekwini mayor Obed Mlaba “unlawfully and irregularly” influenced the awarding of a tender for a waste reduction plant at the Bisasar road landfill site, the forensic probe into maladministration and corruption in eThekwini municipality has found.

According to a summary of the forensic report released by MEC Nomusa Dube on Tuesday, the investigators found enough documentary evidence that Mlaba had been “directly involved” in the waste reduction plant tender, while certain employees of the municipality were also found to have colluded with the company that won the tender.

These employees were, however, not named. The forensic report has recommended that the tender process “be started afresh as the integrity of the process has been grossly compromised, and that certain employees of the eThekwini metro be further investigated by the municipality for negligence and/or collusion with the company”.

Last year it was reported that Mlaba had been a “silent partner” in the company that was identified as the preferred bidder for a R3-billion tender for the conversion of waste to energy at the landfill site.

The Obed Mlaba family trust also reportedly owned a further 20 percent of the company, Environmental Waste Solutions (EWS), but later the tender was “hijacked” by another company with a similar name, Our Environmental Waste Solutions, also trading as EWS.

Two of Mlaba’s daughters were directors in the new company, while the major shareholder in the initial preferred bidder was allegedly sidelined.

Meanwhile, as part of the forensic investigation, the report said there was no evidence linking Mlaba’s wife to Isidingo Security, adding that further action would only be warranted should any evidence become available.

The company is a major service provider of security services to the municipality.

Last night Mlaba said he could not comment because he had not seen the report.

“I am no longer part of council and therefore I have not been privy to the report. I am sure that once I have seen it I will call a press conference to clarify some of the issues,” the former mayor said.[_id]=76299

Durban’s rot uncovered

FORMER eThekwini mayor Obed Mlaba, ex-municipal manager Mike Sutcliffe and a host of top city managers have been fingered in a damning forensic report that has finally blown the lid on financial mismanagement and alleged graft in KwaZulu-Natal’s economic heartland.

With a whopping 53% contribution to the province’s GDP, the state of local governance in the eThekwini metro has been a matter of concern, but problems were allowed to continue for years, with the Msunduzi Municipality regarded as the problem child.

Amid sustained media reports about alleged corruption and complaints about a small clique of politically connected buddies winning tenders in eThekwini, the province stepped in ahead of last year’s local government election and instituted a forensic probe.

This after damning reports by the Auditor-General (A-G), the city’s own audit committee and an internal investigation were rubbished by some of the city’s top officials.

The long-awaited Manase forensic report was tabled yesterday in a closed sitting of the full council by KZN Co-operative Governance MEC Nomsa Dube, although councillors were only given an abridged version.

As expected, it fingered Mlaba in a multi-million rand waste disposal tender at the Bisasar Road landfill site, which also reportedly involved his family members.

He was reported last year to be actively seeking a stake in the project, allegedly telling a potential partner that it was “his retirement plan”. There was also alleged collusion between municipal employees and the preferred bidder.

It was found that the awarding of the tender had been “grossly compromised” and that certain municipal employees should be further investigated for negligence and/or collusion with the preferred bidder.

It was recommended that the tender process should start afresh. Mlaba’s fate remains unclear, however.

The report also recommended that Sutcliffe, whose reign as municipal manager ended on January 3, should face criminal prosecution for not reporting certain fraudulent and corrupt activities to the police in terms of the Prevention and Combating of Corrupt Activities Act. He is also alleged to have contravened the Municipal Finance Management Act (MFMA) by not promptly reporting irregular expenditure in writing to the mayor, the MEC and the A-G.

The municipality may also try to recover money from him. In terms of the awarding of controversial scarce skills allowances to senior managers, there was no evidence that Sutcliffe had acted irregularly or beyond his mandate.

The report also recommended disciplinary action against the following top officials:

• Deputy city manager (treasury) Krish Kumar is alleged to have contravened the MFMA by not taking all reasonable steps to prevent irregular expenditure.

• Deputy city manager (infrastructure) Derek Naidoo is alleged to have contravened the MFMA in a similar way. He is also accused of non-compliance with the metro’s supply chain management (SCM) policies as well as failure to exercise due care.

• Housing head Cogi Pather is similarly accused of non-compliance with the metro’s SCM policies and the MFMA, and failure to exercise due care.

Pather and other housing officials are also liable for irregular expenditure.

The report makes it clear that housing is the main problem division in the metro, responsible for R428?million out of the metro’s R532?million irregular expenditure identified by the A-G in the municipal financial year ending on June 30 last year.

• The report recommended that the head of geographic information and policy, Jacquie Subban, face disciplinary action for negligence resulting in duplicate payments, as well as the irregular awarding of two contracts to H20 Networks for the installation of fibre optic cable by way of Section 36 emergency tenders.

It said that the awarding of the contracts to H2O should be investigated by the municipality. Some of the top managers implicated in the report, including Naidoo and Kumar, said they could not comment as they had yet to see it.

Kumar said: “I would like to say that whatever we have done, we did in the best interest of the city and as far as fraud and corruption goes, we were not involved.”

In his reaction, Mlaba told The Witness: “Once I have seen the report, I will have to call a press conference to tell my side of the story.”

Repeated attempts to reach Sutcliffe, Subban and Pather were unsuccessful.

eTthekwini municipal spokesperson Thabo Mofokeng said the city’s new municipal manager, Sbu Sithole (the former Msunduzi administrator), and the mayor, James Nxumalo, would hold a press briefing today.

MEC Dube stressed yesterday that the investigation was not a witch-hunt against certain individuals, but was “intended to confront head-on some of the ills bedevilling this municipality and arrest the rot before it collapses this institution”.

She said it was important to note that no one had been found guilty.

The immediate tasks to be undertaken included:

• The council adopt the report and its findings and provide a comprehensive response within 21 days.

• Urgently institute disciplinary proceedings against all officials and councillors implicated in the report.

• Review and amend the composition of all bid committees.

• Recover council money from all those liable immediately.

• All disciplinary issues be instituted and finalised within a period of three months.

Dube also noted the 38 officials identified by the A-G to have been conducting business with the municipality had been disciplined, but that an additional 123 had since been found to have not disclosed their business interests and would have to be acted against.

Forensic audit of Sutcliffe, Mlaba et al

KZN launches probe into city administration
2011-03-17 11:50

Paddy Harper

A wide-ranging forensic investigation into the embattled eThekwini Municipality after months of allegations of corruption and maladministration levelled against city manager Mike Sutcliffe, his administrative team and councillors, has been launched by KwaZulu-Natal’s Local Government Ministry.

The probe comes in the wake of a city appointed audit being suppressed by city officials and a damning auditor general’s report nailing Sutcliffe’s team for using emergency funding regulations to pay out more than R500 million in irregular expenditure for sub-standard low cost housing projects around the city.

Local government MEC Nomusa Dube said yesterday the earlier audits had provided prima facie evidence of maladministration and failure to abide by regulations around supply chain management and tender procedures and that her ministry had decided to step in and get to the bottom of the matter.

The new probe, which will be carried out by an experienced company of independent forensic auditors and would dovetail with separate investigations by the Special Investigation Unit (SIU) and other state agencies, would cover:

» Irregular expenditure caused by poor budget controls;

» Failure by city officials to follow supply chain management procedures around key infrastructure and housing projects;

» The failure of city official and councillors – including mayor Obed Mlaba – to disclose their financial interests;

Irregular tender procedures and awards;

» The illegal rental and sale of RDP houses;

» Irregularities in staff appointments and abuse of travel and other allowances;

» Fraudulent practices in the Durban Metropolitan Police; and

» Irregularities in the city’s development and planning department.

Dube said the probe would also take in any other information which came to light from the public and officials and said “serious steps’’ would be taken against any city official or councillor who refused to cooperate.

Earlier probes have been hampered by the refusal of key city officials to both cooperate and hand over documentation to investigators.

Dube said that while the city was “not collapsing’’ it was clear that “something wrong is taking place in the city’’.

She said when the probe was completed the city would be forced to take “decisive action and corrective measures’’.

Criminal charges would be laid against any official or councillor found guilty of corruption, fraud or maladministration, while civil action would be taken to recover city funds paid out illegally.She was unable to provide an exact timeframe for the probe to be completed, saying it would be retrospective and would “go as deep as it needs to go.”

– City Press

Mayor and city boss to be probed
Mar 17, 2011 10:11 PM | By NIVASHNI NAIR

Durban mayor Obed Mlaba and city manager Mike Sutcliffe are to be investigated as part of a wider probe into alleged fraud and corruption in the eThekwini Municipality.

KwaZulu-Natal co-operative governance MEC Nomusa Dube said yesterday: “There is something wrong in this municipality and we believe that we need to investigate.

“We have been monitoring the latest developments in the municipality with keen interest and utmost concern.”

The ANC called on Dube to order a forensic investigation after the auditor-general found that the city had irregularly spent R535-million and the Ngubane audit implicated Sutcliffe and three officials in irregular housing contracts of R3.5-billion over the past 10 years.

Mlaba allegedly had shares in a company that nearly landed a R3-billion tender to convert the city’s waste to energy.

Dube said yesterday the investigation would cover:

*Irregular expenditure resulting from inadequate controls over the budget and payment processes;

*Non-disclosure of interests by councillors and officials;

*Irregularities in the awarding of contracts, payments and performance management of telecommunications;

*The alleged illegal rental and sale of RDP houses;

*Irregularities in travel and overtime allowances and appointment of staff; and

*Alleged fraudulent practices in the metro police.

The outcome of the investigation would compel the municipality to take decisive action and corrective measures and would lead to criminal and civil prosecutions if unlawful activities were unearthed, Dube said.

The forensic probe would begin immediately.

‘Leave no stone unturned’
18 Mar 2011 | Mhlaba Memela

KWAZULU-Natal MEC for cooperative governance and traditional affairs Nomusa Dube has appointed a forensic auditing firm to probe fraud, corruption and maladministration allegations in the eThekwini metro

Manase and Associates will lead an investigation into the affairs of the ANC-led municipality. This latest investigation will supersede all previous probes that were conducted into the affairs of the municipality.

The audit firm is tasked with unearthing any irregularities and maladministration concerning the awarding of tenders.

The municipality has hogged the headlines in the past few months following auditor-general Terrence Nombembe’s report indicating that R532million had been spent irregularly by the council.

Recently it also surfaced that mayor Obed Mlaba is part of a company that nearly landed a R3billion deal with the city to convert waste to energy.

The MEC said she had received representations and reports concerning allegations of maladministration, fraud and corruption.

“The documents include reports on an investigation requested by the accounting officer of the municipality undertaken by Ngubane and Company, the management letter of the auditor-general and an internal audit report,” Dube said.

She said it would appear from the findings of these reports that there is prima facie evidence of maladministration and a failure to comply with procedures and legislation.

“There is currently no evidence of any fraud and corruption,” Dube said. “The scope of these reports was, however, limited and it appeared to be additional areas of concern and further allegations, which have not been investigated.”

The forensic firm’s scope of investigation comprises allegations of illegal rentals and sale of RDP houses, non-disclosure of interests by councillors and officials, irregularities in the supply chain management in the awarding of tenders, payments and performance management in respect of telecommunications, human resource irregularities when recruiting, selecting and appointing staff.

Other allegations are the abuse of travel claims, overtime, allowances, development and planning offices, and non-compliance with street traders’ by-laws.

Dube said any other consequential matters that may arise will form part of the investigation.

“The eThekwini municipality still has a healthy balance,” she said.

Cosatu applauded Dube’s decision to institute a comprehensive forensic investigation into the affairs of the eThekwini municipality.

Secretary Zet Luzipho said the move is long overdue and appealed to Dube to “leave no stone unturned”.

Firm to probe eThekwini

March 17 2011 at 09:38pm

A forensic auditing firm has been appointed to probe fraud, corruption and maladministration allegations in the eThekwini municipality, KwaZulu-Natal’s co-operative governance MEC said on Thursday.

“There is something wrong in the municipality and we believe there is a need to investigate,” Nomusa Dube told reporters in Durban.

The allegations relate to the awarding of tenders.

Auditor General Terrence Nombembe’s 2009/10 report indicated R532-million had been spent irregularly in the municipality, which runs the city of Durban.

The Mercury newspaper recently reported that mayor Obed Mlaba was part of a company that nearly landed a R3-billion deal with the city to convert waste to energy.

Dube said she had received representation and reports on claims of corruption, fraud and maladministration. Documents she received included a report following a probe by accountants Ngubane & Co, an eThekwini municipality internal report and the AG’s report.

“It would appear from the findings of these reports that there is prima facie evidence of maladministration and failure to comply with procedures and legislative provisions.

“In view of the seriousness of the allegations, we have deemed it appropriate to institute a forensic investigation.”

Dube however said the municipality would not be put under administration because it was not falling apart. “The municipality is not collapsing. It’s finances are okay.”

She invited whistle blowers to help the department get to the bottom of the problems. Dube said auditing firm Manase and Associates had been appointed to conduct the investigation, which would cover:

– Irregular expenditure resulting from inadequate budgetary controls, controls over payment processes and weak checks and balances.

– Non compliance with supply chain management policies for infrastructure and housing projects.

– Non disclosure of interests by councillors and officials.

– Irregularities in the awarding of contracts, payments and performance management of telecommunications.

– The illegal rental and sale of RDP houses.

– Abuse of overtime and travel allowances.

– Alleged fraudulent practices at the Durban metro police.- Sapa

Rank Corruption in Housing in Durban – A collection of recent newspaper articles

Hawks set to arrest top eThekwini officials
City manager among officials under spotlight

The Hawks have opened an inquiry into allegations of fraud and corruption made last month against senior officials of the eThekwini municipality.

The Times has established that one of the officials under investigation by the police unit is city manager Mike Sutcliffe.

The Sunday Times yesterday reported that the Hawks planned to make arrests in the municipality within days.

The pending arrests – confirmed by a senior Hawks official in Durban – follow a damaging report into R3.5-billion in contracts dished out over the past 10 years.

The report, by auditors Ngubane & Company, recommends that disciplinary and criminal charges be brought against Sutcliffe, his deputy in charge of procurement, Derek Naidoo, housing chief Coughlan Pather and procurement chief Themba Shezi.

The city was also rocked by the auditor-general’s 2009-2010 report, which cited irregular and non-compliant spending.

Both reports were tabled before the city’s executive committee last month.

Yesterday, opposition parties in the eThekwini council called for tough action against the officials implicated in the tender irregularities.

DA caucus leader Tex Collins said that if any municipal official, regardless of status, were found guilty of inappropriate behaviour, criminal charges must be brought against him.

Inkatha Freedom Party caucus leader Mdu Nkosi said criminal charges should be brought against officials found guilty of flouting tender procedures.

“The ANC must stop treating the eThekwini municipality as a branch of the ANC. They must lead by example and use the resources of the community in a proper way,” he said.

Nkosi said the IFP wanted KwaZulu-Natal local government MEC Nomusa Dube to launch an independent investigation into tender irregularities.

But KZN local government spokesman Lennox Mabaso said the department had ruled out intervening at this stage.

“There will be no over-zealous incursion … the minister has met the council. The MEC’s office will monitor developments in the municipality,” he said.

The Ngubane report, which has outlined financial mismanagement and tender irregularities, has recommended that members of the city’s tender adjudication committee be charged with misconduct and that multi-million-rand contracts awarded for housing in Chatsworth be suspended.

Irregularities uncovered in the Chatsworth projects include, according to the Ngubane report, bid rigging, the awarding of tenders to city employees and city councillors, and bypassing the tender process in favour of certain suppliers, consultants and contractors.

The report said Sutcliffe refused to be interviewed by the forensic auditors during a meeting about the Chatsworth project on May 14 last year “until information regarding the investigation is proved to him”.

The auditor-general’s report uncovered R532-million in irregular expenditure and a host of supply-chain management contraventions for the year to the end of June 2010. Unnamed council sources have reportedly said Sutcliffe is feeling the pressure from “all sides” for the first time in his eight-year tenure. His contract expires in June.

New probe into KZN housing

March 3 2011 at 12:08pm


ALLEGED irregularities in a housing contract awarded by the eThekwini municipality to a company operated by controversial former metro policeman S’bu Mpisane are the focus of a new investigation by the state corruption watchdog, the Special Investigating Unit.

The project – at Lamontville in the south of Durban – has been in the crosshairs of the SIU since September, when investigators visited the site. On this visit, it emerged that while the project had officially been signed off as completed, less than half of the almost 1 000 planned units had actually been built.

In terms of supply chain management regulations, monies can only be paid on completion of projects and once the handiwork has been certified as completed.

The Mercury can confirm that payment for the project – R37 112 768 – was released in three tranches by the provincial government to the eThekwini municipality in November and December 2007.

But when the SIU went to Lamontville for a site inspection in September 2010, they found that, even three years later, only 470 out of the 952 units had been built.

In the meantime, although the first phase of the project was still far from completion, the eThekwini municipality was looking for more funding.

Only a month after the SIU’s site visit, in October last year, the municipality asked the provincial government for additional funding to the tune of R82 million to extend the Lamontville project to 1 531 units at an increased subsidy of R55 706 per unit. As approved in July 2007, as part of the government’s “project-linked subsidy”, each of the original 952 units was subsidised to the tune of R38 984.

Although the R82m increase was approved by the province, the money has not yet been handed over to the municipality. SIU spokeswoman Marika Miller this week confirmed that investigations were ongoing.

The initial investigation came after Human Settlements MEC Maggie Govender requested that the SIU investigate concerns around the Lamontville housing project.

Last year, the developer in the Lamontville project, Zikhulise Cleaning, Maintenance and Transport, was ordered to repair several homes and destroy and rebuild at least two, as the department declared them substandard.

Zikhulise is managed by former metro policeman Mpisane and owned by his wife, Shauwn, the daughter of the late Florence Mkhize, a former prominent eThekwini councillor.

Meanwhile, three officials from the provincial human settlements department – Zodwa Dlamini, Sharone Fleshman and Ntombi Masuku – were arrested by the police earlier this year for alleged involvement in the illegal sale of departmental property, and charged with separate counts of fraud totalling R1.1m.

The eThekwini municipality could not be reached for comment

Chihuahuas bite back
Zohra Mohamed Teke
Thursday, 24 Feb 2011

Now there are calls for the eThekwini city manager’s head to roll and for criminal charges to be brought against him

Mike Sutcliffe once described the ANC as his “favourite South African brand” and dismissed critics as “whining Chihuahuas” after earning their wrath over Durban’s street name changes.

Now there are calls for the eThekwini city manager’s head to roll and for criminal charges to be brought against him.

This follows explosive allegations in a forensic audit report implicating Sutcliffe and his top team in fraud and corruption in eThekwini municipality’s housing tender and procurement process involving billions of rand . His political career hangs by a thread, as swords are drawn. The silence of supporters within his party has been deafening and not gone unnoticed.

But Sutcliffe describes the report by audit firm Ngubane & Co as a “political witch-hunt”, and challenges its authors to prove the allegations against him.

In a letter to the chairman of the council’s audit committee, Sipho Nzuza, Sutcliffe says those implicated were not given an opportunity to respond before the report — commissioned by the committee after the suspension of two officials suspected of fraud — was made public. “Allegations in the report are completely without substance, they are considered defamatory and there is no evidence to suggest any impropriety, fraud, corruption [or] negligence in the conduct of the city manager ,” he says.

The matter prompted city mayor Obed Mlaba — not regarded as a Sutcliffe supporter — to rebuke his officials for speaking out on the matter before investigations were concluded.

Then, reports began to emerge about Mlaba’s own alleged links to council contracts via his daughter’s company , despite rules barring council families from tendering for contracts. Mlaba said he was not aware of those contracts.

While a senior ANC KZN source has called the report “flawed, meaningless and one-sided”, Ngubane & Co is standing by it. It also says its probe was limited by “nonco-operation from officials, including the city manager” and has called for “deep investigation” into the real beneficiaries of tender-rigging.

The report, it seems, is the tip of the iceberg but with local elections around the corner the ANC is trying to limit exposure of corruption within its ranks.

Some observers believe it is unlikely that Sutcliffe — once the ANC’s blue- eyed boy — will be asked to stay on for another term .

Day of reckoning for eThekwini
Report may be bad news for controversial city boss, writes Edward West

ETHEKWINI city manager Michael Sutcliffe, the African National Congress (ANC) municipal leader many Durbanites say they “love to hate”, seems unlikely to be considered for another term after his contract expires this year after eight years in office.

Top city officials and councillors have been accused of fraud and corruption by a forensic audit investigation into the city by Ngubane & Co.

The report makes allegations against Mr Sutcliffe and mayor Obed Mlaba, and eThekwini municipality is claimed to have “irregularly awarded” R3,5bn worth of contracts over the past 10 years.

Mr Sutcliffe has previously done his best to dismiss the Ngubane audit investigation and, among other things, has claimed that it was not conducted properly and that tangible and documentary evidence had not been provided for many claims in the audit.

The tabling of the Ngubane report by the city council today comes hard on the heels of the ordering by the mayor of a full-scale forensic investigation into the city’s financial affairs, which followed the recommendations of the city’s audit and risk committee, based on the Ngubane report, the a uditor- g eneral’s 2009-10 report and the city’s internal audit department’s report. The a uditor-g eneral said in his report, published last week, there had been irregular and non- compliant expenditure of R534m at the municipality last year.

The political fallout from the claims of corruption has been widespread. Relations between the city politicians, headed by Mr Mlaba, and the management of the city are reputed to be strained, something pundits say has been worsened by the death late last year of the ANC’s eThekwini regional chairman John Mchunu, a close ally of Mr Sutcliffe.

The Democratic Alliance (DA) in KwaZulu-Natal has called for the suspension of Mr Sutcliffe, his deputy and head of housing, and the party has questioned the inactivity of the mayor while the alleged graft took place, noting Mr Mlaba’s daughter had also been a beneficiary of irregular expenditure and tender procedures.

Eleven councilors and two municipal officials are alleged to have been beneficiaries of tenders handed out by the municipality.

“The report alleges that Michael Sutcliffe, Derek Naidoo and Cogie Pather have been failing in their duties to manage their respective responsibilities which have led to R502m in irregular expenditure.

“Their protests and threats of legal action this week have been the cries of desperate men trying to cling on to power,” says DA eThekwini spokesman on economic development, Dean Macpherson.

Inkatha Freedom Party’s (IFP’s) eThekwini councillor Prem Iyir says although eThekwini’s councilors have not yet officially seen the Ngubane report, the IFP supported the independence and credibility of the report.

The IFP also supported Mr Mlaba’s stance on the issue that any officials or councilors discovered to have been corrupt in the report, should be dealt with according to due process.

The ANC in the province has clamped down on corruption, something that has been evidenced in the KwaZulu-Natal provincial government, where seeds of a no- tolerance culture toward corruption has led to a number of officials in various departments being brought to book.

Mr Mlaba’s third term as mayor comes to an end after the local government elections and although he cannot be reappointed, it is possible that he may be redeployed.

Mr Sutcliffe’s contract period ends in June , although he has indicated he would not mind being reappointed. At the moment, neither seems likely.

City officials’ fate in balance
Investigator to assess damning Durban audit report
Feb 23, 2011 9:38 PM | By NIVASHNI NAIR

The fate of Durban’s city manager, Mike Sutcliffe, and three other senior officials is in the hands of an independent forensic investigator assessing the damning Ngubane & Co audit report.

The full eThekwini council yesterday approved an executive council decision to appoint an independent forensic firm to investigate the report, which implicated Sutcliffe, his deputy in charge of procurement, Derek Naidoo, housing head Coughlan Pather, and procurement head Themba Shezi in irregular housing contracts of R3.5-billion over the past 10 years.

The report, which Sutcliffe and his administration have challenged, recommended bringing criminal or disciplinary charges against the four.

Ngubane & Co found they overstepped their mandate and ignored procedures in awarding contracts for a Chatsworth housing project.

It also recommended charging all members of the bid adjudication committee with misconduct.

Ngubane & Co investigated the financial affairs of the municipality after the auditor-general’s 2009-2010 report cited irregular and non-compliant spending of R534-million at the municipality.

It found that 53 contracts, totalling more than R16-million, were awarded to councillors and companies owned by employees of the city and that contracts worth R42.5-million were given to government employees outside the city.

Durban’s mayor, Obed Mlaba, said yesterday the new probe would “prove or disprove” any findings against Sutcliffe and his administration.

The independent forensic investigation firm is expected to be appointed soon as the deadline for the completion of the probe is two months.

The council’s DA caucus leader, Tex Collins, told The Times that the four had “nothing to worry about if their hands were clean”.

“If any members of the 20000 employees of the city have honestly never done anything wrong, then they have nothing to fear, but if there is a slight whiff that they have, then they better watch out because they will be pinned down,” he said.

The report, which has not yet been made public, could influence the looming local government election.

Sutcliffe and Naidoo were appointed by the ANC.

Mlaba admitted yesterday that the city’s image was tarnished.

“Our municipality has been one of the most envied and now that image is tarnished. We need to rally behind efforts to clean up and maintain the position as one of the best municipalities in Africa,” he told the city council.

When the allegations surfaced, Sutcliffe tried to save his image in the hopes of being reappointed when his contract ends in June.

He called the Ngubane & Co report a “witch-hunt” and pointed out 90 inaccuracies. –

Investigate, suspend and charge, say auditors

February 18 2011 at 12:29pm


THE FIXING of old council houses in Chatsworth and how contractors were appointed to do the work are at the core of an explosive report by Durban auditing firm Ngubane and Co.

The report calls for criminal charges or disciplinary proceedings to be brought against city manager Mike Sutcliffe, Derek Naidoo, the deputy city manager: procurement and infrastructure, housing head Cogi Pather and procurement head Themba Shezi.

It has also been recommended that four service providers used in the Chatsworth project be suspended until a full investigation is completed.

They are Vaughan Charles and Associates, RGZ Project, Uhlanga Trading Enterprise and Doctor Khumalo Construction.

The Ngubane report also recommends that all bid adjudication committee members be charged with misconduct.

In 2009, the municipality’s internal audit unit tasked Ngubane and Co with investigating whether procurement procedures had been followed in the rehabilitation of council homes in Westcliffe, Bayview and Crossmoor.

The council wanted to spruce up its old rental stock before selling it.

The report on the investigation alleges top city officials overstepped their mandates or ignored procedures in awarding contracts for the project, the cost of which was initially estimated at R30.8 million.

It also says witnesses are afraid to speak because they fear for their lives.

Ngubane and Co had a wide-ranging mandate that included:

* Performing a value-for-money audit of goods and services bought.

* Establishing if there had been any irregularities in procurement.

* establishing if the alleged irregularities entailed financial misconduct, non-compliance and or criminal conduct.

In the event of irregularities being found, the company was to establish who had been responsible for these and the prejudice the municipality suffered. It was also required to provide evidence that could be presented at criminal, disciplinary and civil proceedings.

In its report the company said it had had to deal with several limitations.

These included the safety of individuals.

“Employees who formed part of the investigation at all levels of the organisation are fearful to co-operate with the investigation team, for fear of reprisal.”

Witnesses apparently also claimed that Sutcliffe and Naidoo were allegedly responsible for serious violations of the supply chain management regulations, but they were afraid to reveal their identities and would co-operate further only if they were protected.

The report says external individuals were also prepared to co-operate, but they also required protection.

Ngubane claimed that supply chain management staff had repeatedly avoided the investigation team and that Pather had not given his full co-operation to the team.

The Ngubane investigation also found that the directors of Inyanga Trading 377, the preferred supplier of paint for the Chatsworth project, were the wives of two senior managers in the municipal housing department.

Magandran “Magan” Naidoo and Thavandran “Devan” Govender are in charge of the rental housing stock. They are married to the company’s directors, Ronnika Naidoo and Jannika Govender. All four work for the council.

Among the alleged irregularities found by Ngubane and Co were:

* Circumventing the outcome of tender processes in favour of certain companies.

* The awarding of contracts to employees and councillors of the eThekwini municipality.

* The suspected irregular awarding of R3.5 billion in contracts since 2000 in ways that deviated from the city’s supply chain management policies.

* Intentional exclusion of the supply chain management component from the housing unit’s procurement processes and restricting procurement functions to key officials.

* Lack of segregation of duties.

* Fruitless and wasteful expenditure in acquisition processes of the housing unit.

* Overexpenditure on housing projects and poor management of finances and projects.

* Failure to keep a proper record and registry of documents for audit purposes.

* Inciting subordinates to unprocedural and irregular conduct.

* Failure to take remedial action in cases of serious and substantial contravention of statutes, regulations and policies of the municipality and local government.

The Ngubane and Co team says that in interviews with municipal officials and other witnesses, it received information relating to further irregular conduct of senior officials at eThekwini.

In addition to its recommendations on the Chatsworth project, it calls for further deep investigation into the following projects:

* The South Central and Northern regions rehabilitation project.

* The R293 Rehabilitation Project.

* The Lamontville Rehabilitation Project.

Report fingers top Durban officials

February 11 2011 at 08:42am
By Wendy Jasson da Costa

The eThekwini municipality is sitting on a damning forensic report that fingers some of the city’s top officials for alleged financial irregularities.

The report, which follows an investigation by Durban accounting and forensic investigations firm, Ngubane and Co, calls for disciplinary action and investigation into the city’s financial affairs.

The report has not been tabled or given to all executive committee members but was discussed at a closed committee meeting this week. Municipal manager Mike Sutcliffe and city treasurer Krish Kumar were asked to leave that meeting, although the reasons are unknown at this stage.

On Thursday eThekwini mayor Obed Mlaba said he was not prepared to divulge any of the report’s details.

Questioned on who the report fingered and what it said about Sutcliffe, Mlaba said: “Whether the city manager is in trouble or not, I don’t know at this stage.”

Mlaba said no other information would be coming from him as the municipality’s financial issues were under investigation and he would not respond to rumours or allegations by the opposition.

“We are a committee (exco), we act as a collective, even as different parties.”

This comes amid reports of tensions between Mlaba and Sutcliffe, with the mayor allegedly feeling that he had been isolated by senior officials on mayoral decisions.

These tensions, it is alleged, date back to the days of the late ANC regional chairman, John Mchunu, who was apparently the only one briefed and consulted by Sutcliffe on major decisions affecting the city.

Earlier this week, Desmond Msomi, the managing director of Ngubane and Co, confirmed the existence of the report, but said he could not divulge anything about the investigation as the firm had been commissioned by the municipality’s internal audit unit and was bound by confidentiality rules.

DA councillor Tex Collins on Thursday said he did not have a copy of the report, but “information at hand suggests that several highly placed individuals within the administration should in fact be suspended pending the outcome of further forensic investigations”.

Apart from the Ngubane report and the 2009/10 audit report, which has not yet been made public, Mlaba this week called for another full-scale investigation into the city’s money matters.

In his 2009/10 audit report, auditor-general Terence Nombembe highlighted the city’s R532 million in irregular expenditure as well as its lack of internal controls and supply chain management contraventions.

That report also underlined 25 cases of alleged procurement fraud and irregularities, as well as the delivery of municipal housing which was under investigation.

In his State of the Nation address on Thursday night, President Jacob Zuma said the government had directed the Special Investigating Unit to probe alleged maladministration or corruption in various government departments, municipalities and institutions.

The unit’s Willie Hofmeyr on Thursday night confirmed that the agency was investigating housing irregularities in the municipality.

Minority Front councillor Patrick Pillay said: “The writing is on the wall, the days of irregular and wasteful expenditure are over. The flouting of tender regulations and usage of section 36 freely and without due consideration to the city and its ratepayers will soon be over.”

Sutcliffe and Kumar could not be reached for comment on Thursday night. – The Mercury

February 9 2011 at 08:53am
By Gugu Mbonambi

Shock probe into city finances

The eThekwini municipality’s executive committee yesterday ordered an unprecedented probe into the city’s financial affairs by an outside auditor.

The independent audit, unanimously endorsed by all parties on exco, comes a week after Auditor-General Terence Nombembe red-carded the city for R532-million in irregular expenditure and a host of supply chain management contraventions for the municipal year ending June 2010.

The city nevertheless received an unqualified audit opinion, raising eyebrows in opposition quarters.

The DA’s spokesman for economic development, Dean Macpherson, told The Mercury last night that the audit was likely to encompass the entire municipality “from the municipal manager to the janitor”.

Nombembe’s audit report noted that 25 cases of alleged procurement fraud and irregularities were under investigation, including the delivery of municipal housing.

The latter is already the subject of a probe by Willie Hofmeyr’s special investigating unit in line with a national proclamation signed by President Jacob Zuma.

The new audit was announced by mayor Obed Mlaba, after exco met in committee yesterday with various parties, including Herman van Zyl from the auditor-general’s KwaZulu-Natal office, the municipal risk committee, and its external and internal audit committee.

City officials, including municipal manager Michael Sutcliffe and financial officer Krish Kumar, were not present.

Exco resolved that an outside independent auditor be appointed to conduct the investigation.

Given that a local government election is scheduled for May, and Sutcliffe’s term of office ends in June, any investigation would have to be completed by then.

Mlaba indicated that he wanted it finalised within two months.

He said that the city had been the subject of various media reports based on the auditor-general’s findings.

While exco appreciated that the municipality was in a “financially stable position”, it was concerned about the findings.

This related particularly to non-compliance with supply chain management regulations in the housing unit and Section 36 awards – which are supposed to be used in exceptional circumstances as they deviate from normal procurement processes. Other concerns include the revenue management system and municipal staff and councillors doing business with the municipality.

Mlaba said he had been mandated by exco to lead the process of appointing a company or persons to head the probe.

He said the city was committed to clean governance and urged those with information to come forward once the audit firm had been appointed.

“We will have zero-tolerance to anything that is untoward in our city. All political parties represented in exco are one when it comes to this investigation.”

DA caucus leader Tex Collins said that such an investigation transcended politics because it affected all Durbanites.

“This affects people living in the most humble dwelling in rural areas, to people in the biggest mansions in Umhlanga, and as councillors we are bound by the council code of conduct to ensure that the city’s books and processes are correct,” he said.

The Mercury has published articles relating to the awarding of Section 36 contracts, and reported that at least 20 councillors were among those believed to have flouted the law by doing business with the municipality.

A fortnight ago, Van Zyl told exco that any company with a budget the size of eThekwini’s – R24,1-billion in the past financial year – would usually have a dedicated person to ensure it followed internal controls and financial regulations.

Sutcliffe declined to comment last night, including whether he believed the knives were out for him. In a Sunday Tribune interview this year, he expressed interest in retaining the job, incurring the wrath of some comrades who believed he was lobbying for the post through the media and that new blood at the helm of the city was necessary. – The Mercury

ANC chief’s fat-cat deals

March 12 2010 at 07:19am
By Wendy Jasson da Costa

The chairperson of the ANC’s biggest and most influential region in KwaZulu-Natal, John Mchunu, has been awarded tenders worth at least R40-million by the eThekwini municipality.

Mchunu recently made headlines for allegedly vetoing the completion of a R1.5m elephant sculpture project for the new Warwick Avenue interchange, apparently because it was the symbol of the IFP.

Now, The Mercury has learnt that Mchunu benefited financially from tenders awarded to two of his companies, Inyameko Trading 148 cc and Zakhele and Mondli Trading Enterprise cc.

Although he is legally entitled to tender for work in the municipality, opposition parties have slammed it as “highly unethical” since eThekwini is governed by the ANC, and have claimed nothing in the municipality happens without Mchunu’s approval.

The revelation comes while the issue of lifestyle audits and “tenderpreneurship” tears the ANC and its alliance partners apart.

Mchunu yesterday acknowledged involvement in construction work and that he was a tender beneficiary, but said there was no conflict of interest and that he had declared his business affairs in the legislature’s register of members’ interests.

Inyameko Trading 148 cc received work totalling R37.3m from the municipality between 2005 and February, 2010.

The municipality’s website lists the firm as a sub-contractor in the pipeline replacement project.

Inyameko Trading is also a Masakhe company, which is an emerging contractor development programme of the Public Works Department.

Zakhele and Mondli Trading Enterprise, which has pocketed R4.4m to date, received a municipal tender in 2008 to “rehabilitate units that are structurally unsafe homes”.

Municipal manager Michael Sutcliffe said: “I have no idea what business he is part of or what his role may be. If he is involved in business, I would hope he has declared that interest as it would be illegal for an MPL to not declare his interests.”

Both Sutcliffe and Mchunu denied that the ANC exercised influence over the tender awarding process in the municipality.

However, Cosatu spokesperson Zet Luzipho said: “People have gone into tenders to enhance wealth, not service delivery,” and said that while he would not talk about individuals, he strongly believed that the government would solve many problems by eliminating tenders.

Other MPLs were outraged on learning that Mchunu had benefited from municipal contracts.

The ACDP’s Joanne Downs said called the revelations “absolutely shocking”.

“He has a huge influence and you can’t tell me his position does not affect the outcome of tenders.”

She said there was a problem with the way in which the ANC awarded tenders, because it consolidated its power, but not by rightful means.

The DA’s John Steenhuisen said many of the municipality’s officials, including Sutcliffe, reported directly to Mchunu.

“For tenders and contracts in Durban, the buck stops with him.”

Steenhuisen asked why Mchunu appeared to spend “more time in city hall than in the legislature”.

He said the municipality’s tender board previously consisted of councillors, but that was now prohibited by the Municipal Finance Management Act.

Minority Front leader Amichand Rajbansi said he believed the municipality’s tender committee should be changed every three months to ensure impartiality.

Derek Luyt, of the public service accountability monitor, said the law or code of ethics for all senior public servants should be amended to compel them to put their interests into a blind trust.

“No politician, no matter from what political party, should be tendering for government business. For us it’s not a question of whether it’s legal – there is something wrong if there is a conflict of interest,” he said.

Responding to a list of questions from The Mercury, Themba Shezi, head of supply chain management and procurement in the municipality, said politicians were legally barred from participating or influencing the tender process.

Asked about the influence of the ANC in awarding of tenders, he said: “The law applies to everybody, including ANC members.”