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OUTA files papers against Hawks & NPA over derailed PRASA investigation

The Organisation Undoing Tax Abuse (OUTA) filed an application on Monday 31 July 2017 to intervene in a case aimed at prosecuting those who siphoned off approximately R5.4 billion in dodgy railway contracts.

OUTA is concerned that the PRASA investigation and prosecution is taking far too long to come to fruition. Essentially, this is an intervention application to compel the Hawks to investigate the corruption at PRASA and the NPA to guide the investigations.

OUTA filed the papers in the Pretoria High Court on Monday (31 July 2017) and the application is due to be heard on 6 November if it remains unopposed.

Should the court grant OUTA permission to intervene in the case between PRASA, the Hawks and the NPA, it will mean that OUTA will become an applicant with PRASA against the Hawks and the NPA. Should the order be granted, OUTA will seek to have the court to order that PRASA must hand over a copy of the confidential affidavits and files contained in PRASA’s case, whereafter OUTA should be permitted to file a supplementary founding affidavit within 10 days of receiving these documents. OUTA will agree to ensure these files remain confidential in accordance with court rulings.

There are two founding affidavits attached to OUTA’s application: The first one supports the intervention and the second outlining the main case against the Hawks and NPA.

In the first founding affidavit, OUTA’s head of legal services advocate Stefanie Fick explains that OUTA essentially wants the same outcome as PRASA indicated it wants, and that the intervention is intended to avoid duplicate proceedings. OUTA’s application arises from a lack of faith in the Hawks and the NPA to carry out a real investigation and the strong public interest in ensuring that this investigation gets underway properly.

Fick says OUTA’s intervention is aimed at ensuring that the investigation into PRASA’s Siyangena and Swifambo complaints is conducted reasonably and brought to finality.

Fick’s affidavit notes that:

  • The Auditor General found irregular and unauthorised expenditure at PRASA totalling about R14.5 billion for 2014/15;
  • The Public Protector found governance failures and suspected corruption in PRASA;
  • The PRASA board’s forensic investigators and auditors uncovered substantial corruption, including around the Siyangena and Swifambo contracts;
  • In July 2015 PRASA opened cases with the SAPS, which referred the cases being investigated by the Hawks;
  • PRASA has provided sufficient information and additional forensic input to assist the Hawks, however two years later no charges have been brought against those clearly implicated in the matter.  This is evidenced by claims made by the Prasa board that the DPCI team allocated to the PRASA investigations has not as yet applied its mind to the documents supplied and has indicated little intention to ensure that the investigations are finalised;
  • PRASA has asked the court to overturn its contracts with Siyangena and Swifambo, on grounds including fronting which is a national priority offence; and
  • PRASA’s criminal complaints about Siyangena and Swifambo “raise issues of fundamental public importance. They concern corruption by a public body concerning a tender that will affect the public for decades to come.”

What the Hawks should be investigating

Fick’s second affidavit outlines the mess in PRASA and the problematic contracts, which the outgoing PRASA board chair Molefe has been trying to clean up, including the disastrous Siyangena and Swifambo contracts which were signed between 2009 and 2013 and together involve about R5.4 billion.

Fick outlines the breakdown in good governance within PRASA particularly with relation to the spending on capital projects, which involves the past Group CEO Lucky Montana (who has since left), and the Group CFO along with others on the board at the time.

“PRASA, under the management of Mr Montana, awarded numerous tenders and contracts that were, at the very least, irregular and, at worst, unlawful and corrupt,” said Fick. They included transactions that exceeded his powers. Furthermore, Montana was involved in property transactions which Fick says appear to have concealed bribe payments.

The current PRASA board was appointed in August 2014 and saw fit to investigate and lay charges against those implicated in its findings. Unfortunately, the term of office of the current board under Popo Molefe ends today (31 July).

The Hawks – first under Major General Berning Ntlemeza and now under acting head Lieutenant General Yolisa Matakata – has failed to investigate properly and has also failed to work with the NPA to guide the investigations. Molefe has worked relentlessly to ensure the 43 criminal complaints they have raised are expedited, however the investigations remain stalled.

Fick says the investigations failed because the Hawks: made multiple changes to the investigation team, leadership and structure; failed to ensure effective asset protection; failed to co-operate with PRASA; and failed to cooperate with the NPA to protect assets and coordinate the investigation.

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