MEDIA STATEMENT: JUSTICE AND CORRECTIONAL SERVICES COMMITTEE CONCERNED ABOUT OFFICIALS FACING STATE CAPTURE INVESTIGATIONS

The Portfolio Committee on Justice and Correctional Services today received a progress report on the State Capture Commission’s recommendations from the Department of Justice and Constitutional Development and the Special Investigative Unit (SIU) where members of the committee expressed grave concerns over resignations of the affected officials of the department before the conclusion of the investigations.

The Chairperson of the committee, Mr Bulelani Magwanishe, said the committee is extremely concerned about this phenomena as it seems in most investigations disciplinary cannot follow as officials have resigned and left the public services before the conclusion of investigations. “We are, however, encouraged by the SIU getting freezing orders, including in relation to pension funds of officials, to ensure some of the money is being recouped. However, the committee made it clear that criminal actions against those officials should also be considered and instituted,” said Mr Magwanishe.

The SIU appeared before the committee today to update the committee on its investigations regarding Transnet, South African Airways (SAA), PRASA, Eskom, DENEL, Alexkor and the Free State Department of Human Settlements.

Regarding Transnet, the committee heard that SIU is investigating, among other allegations, irregularities in the contracts acquisition of the 1064 Locomotives with contracts with Original Equipment Manufacturers (OEMs) valued at R54 billion, relocation of two OEMs from Koedoespoort to Durban facility at a cost of R1.4 billion and maintenance of locomotives by CSR and the appointment and contracts awarded by Transnet with three Transactional Advisors (McKinsey, Trillian and Regiments), the interest rate swap transactions concluded with Nedbank and contracts awarded to Neotel (Pty) Ltd for the supply of CCTV Cameras at the ports to the value of R882 million.

Regarding SAA, the committee heard that areas of investigations included a contract to Airchefs SOC Ltd which was allegedly awarded irregularly and with the interference of the former SAA Board Chairperson, Ms Dudu Myeni. It was found that Ms?Myeni instructed that the appointment of LSG be cancelled, and the services be reinstituted with AirChefs. The committee heard that on 9 October 2015, a resolution was taken by the board in which the award to LSG Sky Chefs was cancelled and the services were awarded without a tender process.

Regarding Eskom, the committee heard that an allegation of irregularly awarded contract to Tegeta was investigated, and regarding DENEL, the committee heard that investigations included the awarding of three pilot bursaries. The committee heard that at Alexkor investigations included maladministration of the affairs of the entity in respect of marketing, valuation, sale and beneficiation of diamonds, pursuant to agreements concluded between Alexkor and service providers.

The committee heard that the SIU also focuses on big companies that are involved in these contracts in order to hold them accountable. The committee welcomed the SIU’s confirmation that in some instances, where there is concrete evidence pointing at officials, criminal referrals follow against individuals.

Several members of the committee called for civil litigation in order to recoup the lost funds and that must be followed by consequences to ensure accountability. The committee also called for consequences for companies or individuals who colluded with officials to get business contracts through corrupt and nefarious means.

Mr Magwanishe said the committee is always pleased to listen to the SIU. “Your contribution in the fight against crime and corruption is noted in a positive manner.” The committee planned to get a briefing from the National Prosecuting Authority on matters of prosecution, but due to unavailability of time the meeting had to be postponed.

Source: Parliament of South Africa