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A businessman who received R29m in alleged irregular payments from the Eastern Cape Department of Social Development used his ill-gotten gains to buy a Rolex watch as well as a Porsche and Ferrari.
Poovandaren Chetty, the Director of Umnotho Development appeared in court in King Williams Town on Friday alongside the former Head of the Eastern Cape Department of Social Development, Stanley Khanyile, and the former Chief Director in the office of the HOD, Vuyokazi Sangoni.
They are charged with contravening the Public Finance Management Act, fraud, theft and money laundering which involves just over R29 million.
The National Prosecuting Authority said that King Williams Town Magistrate, Nkosinathi Mjekula, granted Chetty R200 000 bail, Khanyile was granted R50 000 bail while Sangoni was granted bail of R20 000.
NPA spokesperson, Anelisa Ngcakani, said that Khanyile has been charged with two counts of contravention of the PFMA and two counts of fraud.
“Sangoni, on the other hand, has been charged with one count of fraud while Chetty faces 16 counts of fraud, 18 counts of theft, and 15 counts of money laundering,” she said.
The charges relate to the establishment of a Provincial Women's Development Resource Centre in Lusikisiki.
“It is alleged that in 2015, Khanyile, in his capacity as the HOD, allegedly flouted procurement regulations by signing a Service Level Agreement with Chetty without him submitting a business plan on behalf of Umnotho, which is a requirement for funding in terms of the department’s policy,” the NPA said.
“Between July and August 2015 the ECDSD paid just over R14 million to Umnotho and that Chetty was the only designated signatory to the bank account.
The state further alleges that Khanyile and Sangoni had colluded to ensure that Umnotho won another tender during the 2016/2017 financial year “for the training and capacitation of co-operatives.”
The two government officials allegedly flouted the procurement policy and did not follow normal departmental practices when Umnotho was awarded the tender and a Service Level Agreement concluded on 3 May 2016.
“The second agreement was deemed to have commenced on 03 May 2016 and was to endure until 31 March 2017. The ECDSD paid just over the R15 million to Umnotho.”
Chetty is alleged to have misused approximately R14 million from the Umnotho account for his personal benefit in that during August and September 2015 he allegedly bought a Rolex watch, a diamond ring, Porsche and Ferrari motor vehicles and gold coins valued at just over R1 million, according to Ngcakani.
She said Khanyile and Chetty were arrested by the Anti-Corruption Task Team on Thursday in Gauteng while Sangoni was arrested in East London.
Their next court appearance will be on 16 October 2020.
