STATEMENT BY THE EXECUTIVE MAYOR OF CAPE TOWN, ALDERMAN PATRICIA DE LILLE

CITY OF CAPE TOWN: FORENSIC INVESTIGATIONS

The City of Cape Town is determined to root out fraud and corruption, wherever and whenever it may occur. Therefore the City, arguably more than any other metro in South Africa, takes proactive action to identify any criminal activity and deals with it to the full extent of the law.

As part of a multifaceted corporate governance structure within the City of Cape Town, a forensic department has been established and operationally placed in the office of the City Manager. The mandate of this department is to investigate allegations of corporate crime.

The City continuously evaluates and re-evaluates our systems and control measures to ensure that weaknesses or gaps are eradicated; however, we find that a small minority of people with criminal intent have attempted to defraud the City and its ratepayers.

These attempts to defraud the City impact on all of us because at the end of the day service delivery can be negatively affected. We are seized with a number of cases where prospective service providers to the City attempt to gain contracts or tenders by misrepresenting their HDI status. In essence, we find that this sort of conduct erodes the fair and equitable processes put in place by our Supply Chain Management Department.

The importance of internal controls underpinned by information received from concerned ratepayer's has lead us to uncover, what we believe to be a crime syndicate, that  has defrauded the City by submitting false claims and bank account numbers in respect of service refunds. This investigation is on-going, however, by acting swiftly we have prevented losses in the amount of approximately R800 000. 

The City's forensic department is actively engaged with the Special Commercial Crime Unit (SCCU) and the Directorate of Priority Crime Investigations (Hawks). We meet on a monthly basis with representatives of these units to discuss cases that the City has reported for criminal investigation.

By way of example a recent matter that has been finalised in court last week involved a service provider who fraudulently obtained contracts with the City to the approximate value of R1 900 000 by "cover quoting". The owner of this entity, Mr Nigel John Du Plooy was found guilty of fraud and received a R30 000 fine or twelve months imprisonment together with a further twelve month imprisonment suspended for five years on condition that he is not convicted of a similar offence.

We value the assistance of community members in our fight against fraud and corruption. This is best illustrated where a number of community members recently came forward with information that a now former City employee demanded money from them in order to illegally allocate them housing which was not due to them.

The City investigated all these claims which resulted in the court finding Ms Nomkhitha Matinisi guilty of eight counts of corruption and she was sentenced to five years in jail of which two years was suspended on condition that she was not convicted of a similar offence. 

The City has adopted a zero tolerance approach towards fraud and corruption and fraudsters must realise that we will pursue them to the full extent of the law. This is best illustrated by the recent High Court application award for a provisional restraint order dealing with realisable property of a former City employee Robert Fredericks, his wife Yolande Fredericks and her father Basil van Schalkwyk.

This order was made in terms of section 26 of the Prevention of Organised Crime Act No. 121 of 1998. The forensic department investigated allegations that Robert Fredericks illegally awarded City contracts to his father-in-law and wife and the preservation order was obtained to prevent any dissipation of assets prior to the court case which is set down for hearing on 14/15 June 2012.

It is vital in the fight against fraud and corruption for staff, ratepayers and citizens to always be vigilant and report suspicions of fraud or corruption to the City's Hotline at  0800 32 31 30.

Statement issued by the City of Cape Town, April 4 2012

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