R27m fraud accused could lose all
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The owners of an electrical business, charged with corruption and defrauding the Construction Industry Development Board to gain provincial contracts worth R27 million, stand to lose all their assets if convicted.
This week the Asset Forfeiture Unit acted on a preservation order granted by Pietermaritzburg High Court Judge Piet Koen, seizing control of the uMhlanga home of Shamla and Ravan Chetty, three other properties, dozens of vehicles, plus cash in their bank accounts and those of their company, Namasthethu Electrical (trading as Nationwide Electrical).
The assets will be “preserved” until the outcome of the criminal trial and pending the granting of any confiscation order.
In an affidavit before Judge Koen, Colonel Kubenthren Naidoo, of the Hawks, said the company had scored contracts from the Public Works departments in KwaZulu-Natal and the Eastern Cape – specifically contracts for Addington, Greytown and Livingstone hospitals – because of gradings it had acquired through the submission of fraudulent documentation to the board and in collusion with a board assessor.
The grades determined which contracts a company was eligible to apply for and, had the truth been known, the company would have received lower grades and would not have been awarded the contracts.
Naidoo said disparities were picked up between the financial statements submitted to the board and those submitted to Sars, with their accountant maintaining that Chetty had given him the data and had informed him that “he had to portray the business as being a viable entity and he needed to show financials that reflected strong profitability and liquidity”.
A board assessor had calculated the financial capacity of Nationwide, based on the alternative Sars figures, and said she would have awarded a much lower grading than the one the company had obtained. And, in fact, had she known at the time that the data was false, she would not have awarded any grade.
Naidoo said the company had also made misrepresentations regarding qualified full-time staff.
And on top of this, they had also allegedly paid a board assessor to assist them from within.
In an affidavit attached to the court papers, the assessor in question, Minesh Pema, said he realised the system could be easily manipulated and “saw an opportunity to benefit financially”.
He said when dealing with an application for a specific grading from Nationwide, he had discovered the company did not qualify.
He called Chetty who asked him to “make a plan”.
“I told him to amend the financials and that it would cost him R3 000 for me to use these,” he said.
Pema said in dealing with another application, which lacked the required professional staff, he had agreed with Chetty to endorse the application, to show two more “100 percent” committed professionals.
The value of the assets attached so far is about R17m and the order gives the curator, Eugene Nel, the authority to investigate other possible assets to place under restraint to the full value of R27m.
The criminal trial is due to start next month. - The Mercury