Hawks, SIU close curtain on more than a decade of shady dealings at Mhlathuze Water Board

Investigations by the Hawks and the Special Investigating Unit (SIU) uncovered a web of corrupt activities and financial mismanagement at KwaZulu-Natal’s Mhlathuze Water Board, once chaired by delinquent director Dudu Myeni.

The alleged malfeasance dates back to more than a decade ago.

The SIU also investigated other water boards including Umngeni Water, Amatola Water and Limpopo’s Lepelle Northern Water, at which investigators are seeking to set aside a R4.1 billion contract in the Giyani water project that was meant to supply at least 55 villages with much needed water.

R3 billion has already been spent but the project remains incomplete eight years after it commenced.

ALSO READ: SIU takes water board officials to task over corruption, maladministration

6 people in the dock

Mhlathuze is based in Richards Bay, and supplies bulk water to municipalities such as Mkhanyakude, King Cetshwayo and Zululand.

On Thursday, the Hawks arrested six people in connection with alleged corruption at the bulk water supply water agency. They include a 58-year-old director in the KwaZulu-Natal premier’s office and her 47-year-old accomplice.

Also Read: Hawks arrest director-general in KZN premier’s office

The duo faces charges of defeating the ends of justice and intimidation. Also in the dock is a Mhlathuze senior official and service providers.

“The chairperson of Mhlathuze Water Board reported allegations of irregular appointment of service providers [for legal services] without following the supply chain management protocols of Mhlathuze Water Board, as well as contravention of section 51(1) of the Public Finance Management Act, Act 1 of 1999 by not complying with the operational policies of the public entity.

“Investigations revealed that some senior officials are implicated in the irregularities which resulted in the Mhlathuze being prejudiced by an amount of +/ – R37 million,” said Hawks spokesperson Brigadier Thandi Mbambo.

They are all expected to appear in the Durban Magistrate’s Court soon.

READ MORE: Mokonyane made me do it, says official in dodgy Giyani water project

Allegations of looting against Myeni

Prior to her destructive years as SA Airways (SAA) chairperson, Myeni, who was declared a delinquent director and forbidden from holding any directorship position, headed the Mhlathuze board.

During the testimony of ‘Mr X’, the state capture commission of inquiry heard how R2.3 million was siphoned from the water agency within weeks in 2015 while Myeni was at the helm.

Mr X detailed how his company Isibonelo Construction was used for payments derived from inflated invoices to be laundered to a company called Sifezakonke Engineering. The money was paid in tranches and disappeared as soon as it reached Sifezakonke.

Isibonelo received the cash without performing any work at the water utility.

At the time, Nomvula Mokonyane was the minister of water affairs.

In 2016, according to a 2020 report by Corruption Watch into the graft in the water supply sector, alarm bells rang when a merger was proposed between Umgeni Water and Mhlathuze.

“There were fears that the proposal was not being driven by efficiencies to be gained from rationalisation. Umgeni, the country’s second largest water board, has long been targeted by unscrupulous business people seeking to partner with public officials to make a quick buck.

“In 2016, Dudu Myeni, the controversial chairperson of Mhlathuze and head of the Jacob Zuma Foundation, had been found by courts to have overstayed her legally allowed tenure in Mhlathuze and had to vacate her position.

“The subsequent concern was that the merger of Umgeni and Mhlathuze would allow Mokonyane to appoint Dudu Myeni as chairperson of the merged entity instead and thus gain control over Umgeni’s sizeable project portfolio and financial reserves.

“To further facilitate the merger and perhaps a wider plan for the two institutions, Mokonyane had dismissed the Umgeni board and appointed an acting chief executive accountable only to herself,” read the report.

ALSO READ: Giyani water project suffers further, as ‘Zuma and Mokonyane’s billions’ evaporate

SIU probe

SIU investigators in June presented before Parliament’s Standing Committee on Public Accounts (Scopa) the wide ranging probe at water utilities and at the Department of Water and Sanitation.

SIU programme manager Gina Howes at the time said three cases from the department were before the courts, seven others were reffered to the Asset Forfeiture Unit (AFU) and 23 to the National Prosecuting Authority (NPA).

At Mhlathuze, the SIU found that:

• Correct procurement processes were not followed
• Controls and policies in place were not sufficient to mitigate the risk of financial loss suffered by Mhlathuze Water Board
• Documents critical to the investigation were either lost or destroyed negligently or intentionally, and that hampered the investigation
• Mhlathuze Water Board failed to keep records of financial transaction which reflected that R9,9 million of payment vouchers were untraced. Most of the original contracts for tenders awarded totalling over 19 million were not found and/or did not exist
• The entity failed to protect its records and thereby contravening section 50(1) and section 51(1)(a)(i) read with section 86 of Public Finance Management Act
• Failure to enter into written contracts with suppliers, contravening section 32 of the Water Act

READ MORE: Dudu Myeni is officially a delinquent director