State bilked of R1.6bn
THERE is a possible case for collusion between agriculture, forestry, and fisheries department officials and "others outside the department", Department of Agriculture, Forestry and Fisheries (DAFF) acting director-general Sipho Ntombela said
The indications are that "something wrong has happened", he told a media briefing on an Ernst & Young forensic interim report about alleged procurement irregularities, specifically regarding goods and services procured by the Marine Living Resources Fund from Smit Amandla Marine Services (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.
But in a statement late on Monday the department said the investigation "confirms multi-billion rand corruption in vessel management by SAM".
The report revealed, among other things, 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 having been 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 about R1.6-billion to R2-billion.
"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.
"The evidence indicates that the state was defrauded to the extent of about R1.6-billion, which includes invoices of duplicate payments, [and] invoices without tax or VAT."
SAM director Sithembiso Mthethwa 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.
"We reiterate our company's willingness to participate in an open and transparent investigation into our business practices," Mthethwa said.