SIU freezes the pension of former Lepelle manager
The Special Investigating Unit (SIU) has obtained a preservation order to freeze the pension benefits of Carel Schmahl, former general manager of operations at Lepelle Northern Water (LNW) to the value of approximately R10.2 million linked to the Giyani Water Project.
The investigation revealed that Schmahl had allegedly tempered with resolutions of a task team meeting and used cost estimates of another company to motivate the appointment of LTE Consulting for a project to provide clean water to villages in Giyani. “LTE Consulting was appointed to build wastewater and water infrastructure to supply Giyani villages with clean water to the value of R95 million.
However, the contract ballooned to R2.2 billion in 30 days without following supply chain processes governing public procurement. “On June 9, the special tribunal granted the SIU a preservation order to freeze pension benefits of Schmahl pending the finalisation of a civil action brought by the anti-corruption agency. The order interdicted and restrained Bidvest Umbrella Pension Fund, Bidvest Wealth & Employee Benefits, and Alexander Forbes Retirement Fund from paying out pension benefits due to Schmahl,” said Kaizer Kganyago, head of stakeholder relations and communications for the SIU.
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Schmahl was dismissed in December 2022 by LNW, acting on a referral from the SIU, for his role in the appointment of LTE Consulting in the Giyani water project. “The investigations revealed that Schmahl’s conduct was inconsistent with the National Treasury practice note on supply chain management in that he did not perform his duties with integrity and was not fair and impartial.
“He allegedly used cost estimates of HWA Pty Ltd in support of his motivation for the appointment of LTE Consulting.” Furthermore, SIU investigation revealed that Schmahl allegedly committed gross dishonesty by misrepresenting resolutions of a task team appointed to advise the Department of Water and Sanitation on intervention, and his actions have resulted in financial losses by the State,” added Kganyago.
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He said that SIU is empowered to institute a civil action in the High Court or a special tribunal to correct any wrongdoing uncovered during its investigations caused by acts of corruption, fraud, or maladministration. He said that in line with the SIU’s mandate, it refers any evidence pointing to criminal conduct to the National Prosecuting Authority (NPA) for further action.
