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Former NMBM officials among those arrested for fraud, corruption

The Hawks Serious Corruption Offences team recently arrested nine suspects, including two former Nelson Mandela Bay municipal officials, on multiple charges of fraud, corruption and money laundering exceeding R56.4 million actual loss, with a potential loss of approximately R200 million.

Nine suspects arrested for fraud
Nine people, of which two are former officials of the Nelson Mandela Bay Municipality, have been arrested on multiple charges of fraud and corruption.

The suspects, aged between 30 and 65 years, were warned to hand themselves over to the Hawks this morning (Friday) and are expected to appear in the Port Elizabeth Magistrates Court during the course of the day.

According to a statement released by the Hawks, the suspects also include two influential community office bearers and five businesspeople. The nine people will be charged along with six juristic people (entities).  The tenth person that was to be arrested recently passed away.

“The Metropolitan Municipality was among those selected for a rapid bus system in 2010 and the Integrated Public Transport System (IPTS) project was administered with funding allocated by the National Treasury. In the same year, another project called, Implementation and Maintenance of an Institutional Contracts Management and Administration System (ICMAS) was undertaken,” the statement read. 

“The service providers chosen for these two projects were reportedly irregular and their prices allegedly inflated. The matter was reported to the Hawks for investigation in September 2018 following an audit report by the National Treasury between October 2014 and March 2017. 

It is alleged that the suspects operated a syndicate with common purpose to unlawfully circumvent the prescribed procurement processes to benefit specific suppliers or consultants irregularly and fraudulently,” the statement further read. 

It is also alleged that influential office bearers colluded with municipal officials and controlled decision-making in the appointments of specific people in critical municipal posts. This was purportedly done to influence procurement processes and the appointments of entities willing to advance the interests of the syndicate. 

The statement also mentioned that the alleged objective was to ensure a steady stream of unlawful payments from the municipality to members of the syndicate where the funds were distributed to other syndicate members.

“This now forms the second leg of our investigation. On the first leg conducted in April 2017, we arrested six suspects that included two company directors, one entity, one municipal official and one person from Eastern Cape Province Rugby Union,” the statement concluded.

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