Mpisane couple do a deal
THE Durban High Court yesterday accepted an out-of-court settlement which has given back a municipal housing contract controversial business Sbu and Shauwn Mpisane, but has stripped them of future preferential treatment.
The eThekwini Municipality gave in to the couple’s legal demands last week when it agreed to settle the R176-million owed to their company, Zikhulise Cleaning, Maintenance and Transport, for houses that it had built and also to honour the contract by allowing them to build the remaining 2,825 houses.
The Mpisanes will earn about R141-million for those houses.
But the couple had to give up their privilege to bypass the city’s procurement process to get back their contract.
One of the conditions of the settlement is that the company gives up all preferential rights to allow other players in the market an opportunity to bid for housing contracts.
The couple’s housing contract dates as far back as 1997 when it received the tender from the provincial Department of Housing.
The department then handed the housing project over to the municipality with a condition that the contractors be retained.
Since then the Mpisane’s have won contracts worth R300-million from the city despite complaints of shoddy workmanship and Shauwn Mpisane’s VAT fraud conviction in 2005.
In court papers opposing the Mpisane’s application for the reinstatement of the housing contract earlier this year, the city admitted that the procurement process was flawed.
In most instances it had used Section 36 of the procurement policy to bypass the normal public tender route.
The settlement was discussed during a executive council meeting yesterday while the court was expected to deliver a summary judgement on the matter.
However, Zikhulise’s advocate Alan Boulle told the court that the matter had been settled.
But Shauwn Mpisane’s legal woes are not over.
She is accused of submitting revised financial statements to SARS that understated the profit made by her company in 2008.
The State alleges that company book-keeper Kishal Reddy forged four invoices, allegedly on instructions from Mpisane, that showed inflated purchases of more than R5-million.
She faces 118 charges relating to tax evasion and fraud, and charges of contravening the Close Corporations Act by managing a business though convicted of tax fraud in 2005.
The trial will resume in October.