Richmond Municipality kickback scandal

This article was published in The Witness on June 20, 2019. It can be read on News24.

Richmond Municipality’s chief financial officer has been accused of accepting kickbacks of more than R1,2 million to ensure a Durban company was awarded two lucrative contracts.

He is one of six accused in the case, including two companies.

Sanjay Mewalall is facing more than 40 counts relating to alleged “corrupt activities” and fraud, and alternative charges of theft and money laundering.

His wife, Leanne, and her company, Thistle Group (Pty) Ltd, are also accused of benefiting financially from the arrangement.

It is alleged that Mewalall orchestrated the appointment of MKT Services for contracts put out by the Richmond Municipality for electrical consultants for a drivers’ testing ground, and for work in a separate electrification project.

The Mewalalls, along with MKT’s Sindhu Ramandandh Bhogal, appeared briefly at the Durban Special Commercial Crime Court on Tuesday.

A fourth accused is Seema Maniram, whose business, SM Bookkeepers, is alleged to have unlawfully benefited from another project that Mewalall allegedly had a hand in.

MKT Services and Thistle Group are also listed on the draft charge sheet.

The six accused collectively face 92 charges.

Their matter was adjourned to September for the state to peruse necessary documents.

According to the charge sheet, “in most instances, shortly after” money was paid to MKT by Richmond Municipality, Mewalall had either directly or indirectly benefited.

This includes 18 deposits amounting to R570 100 into his account; two instalments on a loan repayment amounting to R60 000; and seven vehicle instalment payments which benefited him and his wife totalling R51 376,64.

A further R13 200 went into his wife’s account, and three deposits of R174 000 went to her company.

The draft charge sheet alleged the appointment of MKT Services for the contracts was “irregular” and that a “corrupt relationship” exists between Mewalall, Bhogal and his company.

It alleged that supply chain management regulations were flouted in the awarding of both contracts to MKT, and that MKT was not registered on Richmond Municipality’s database.

For the drivers’ testing ground project, MKT had allegedly started rendering services before the contract had even been awarded.

For the electrification project, Mewalall had allegedly approved the contract on his own, which contravened his lawful duties.

MKT was allegedly paid R3 370 210,74 by the Richmond Municipality, despite the order for services on the tender offering only R800 000.

Mewalall is further alleged to have received “undue gratification” from two companies for work related to a National Treasury project for integrated financial management and internal control systems to be supplied at local governments.

He allegedly “misrepresented” to a director of company Camelsa — which was unsuccessful in its bid for the services — to make a payment of R100 000 deposit to pay developers for a performance management system. This money was allegedly paid into MKT’s account.

He is also alleged to have told Munsoft, the successful company, that it had to pay R700 000 to subcontractors. R250 000 of this was paid to MKT for “consultancy services”.

A further R450 000 was paid to SM Bookkeepers for accountancy services. Both companies allegedly never provided the services they were paid for.

In total, MKT allegedly received R4 179 351,90 in the three deals.

None of the accused have pleaded to the charges and they are out on warning pending their trial. The case was adjourned until September 6.

A council plagued by violence 

The Richmond Municipality has become notorious for political tensions.

The Witness has carried numerous reports of violence and political killings in the area, with fears being raised that the area would become a hotbed of killings as it was in the 1990s.

In February, a municipal bodyguard survived several gunshot wounds after being shot at while on municipal premises.

In March last year, the municipal manager, Sibusiso Sithole, was shot dead, reportedly by two men as he got into his vehicle. A special task team was set up by police in the wake of the incident.

The deputy mayor, Thandazile Phoswa, was also shot dead last year.

Ward councillor Sfiso Mkhize was killed in a hail of bullets in June 2017.