Sekhukhune District Muni recovers millions after fraud

Two more officials of Sekhukhune District Municipality (SDM) were served with letters of intention of suspension and the Hawks is proceeding with investigations after the municipality was reportedly defrauded with millions during July this year when more than R5,4 million that was destined for payment of service providers, were paid into private accounts.
This was revealed by SDM Executive Mayor, Stanley Ramaila during a media briefing at a venue in the city on Monday. Ramaila said that in fraudulent activities, the municipality paid out an amount of R4 503 122,19 on 5 July and also paid R948 891,93 on 9 July into wrong accounts, amounting to R5 452 014,12.
“Upon the discovery of the incident, the acting Executive Mayor, acting Municipal Manager and the acting Chief Financial Officer immediately intervened and all financial institutions were informed of the fraudulent activity and were instructed to freeze all the accounts, forensic auditors from the panel of accountants were engaged to institute forensic investigations into the matter and attorneys were appointed to engage with the banks and approach the court for an order to freeze the funds and also seek redress from the primary banker and other banks who continued to allow withdrawals even though an instruction was issued to freeze the funds.
A criminal case was opened with the SAPS in Groblersdal and was elevated to the Hawks. As a precautionary measure, four officials have been suspended pending internal labour processes,” Ramaila said.
Ramaila was delighted to confirm that amounts of R3 042 961,68 and a further R845 344,62 were recovered from Absa and Nedbank respectively and that a recovery from an interest bearing account at the Peermont Group realised another R900 000, bringing the total amount recovered successfully to R4 788 306,30. R663 707,82 is still to be recovered through claims from the insurers of Absa and Nedbank.
“It is worth noting that all the money stated as recovered has been deposited back into the district municipality’s account. And further note that apart from the four officials who were suspended in July, a further two have been served with intentions to suspend.”

Story: BARRY VILJOEN
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