An explosive report has detailed how the OR Tambo district municipality allegedly paid more than R168m to companies — some of which had not even lifted a finger.
At the centre of the questionable and allegedly illegal payments is municipal manager Owen Hlazo, who has been placed on precautionary suspension.
The council has given him until Monday to explain why he should not be suspended.
CFO Moabi Moleko, who reportedly refused to sign off a number of “illegal payments”, now fears for his life and has hired private bodyguards as he fears “an attack any time”.
These details are contained in a report tabled in council on Wednesday by acting mayor Robert Nogumla as mayor Thokozile Sokanyile was in quarantine.
It could not be established over what period the questionable payments were made.
According to Nogumla’s report, Hlazo allegedly paid:
- R133,9m in tranches of R91,1m, R28m and R14,8m, in “unexplained advance payments” to Amatola Water;
- R12,6m to Ruwacon to supply material to Signal Hill in Mthatha. It is yet to be delivered;
- R10,3m to Gcinasonke Construction for the Mqanduli bulk sewer though work was not done;
- R9,9m to Khwalo Construction for the same Mqanduli project, also without any work being done;
- R2,5m to Valatone to deliver water tanks though there is no evidence the company delivered them; and
- R1m to Phonenix Tanks to deliver water tanks though there is no evidence the company delivered them.
Hlazo on Friday said he was consulting his legal team to challenge his suspension.
“Yes, I am aware of the report because I was in that council meeting. However, it would not be ethical to speak about such allegations in [the] media before I have responded to council first.
“While I am on suspension, I cannot go to the papers and discuss the allegations,” Hlazo said.
In his council report, Nogumla said private investigators should be roped in to probe the allegations.
“The office of the executive mayor has received complaints of financial irregularities, mismanagement and unorthodox financial practices. These allegations, if proved at a later stage, place the municipality in a serious and compromising financial position.
“Viewed altogether, these allegations suggest corrupt financial practices or theft of municipal finances. The situation is also alarming, with the suggestion of money laundering, alternatively, unauthorised municipal loans disguised as advance payments to companies for members of the public,” he wrote.
“When all the allegations are viewed, I considered them to be so serious and thus constitute an act of serious misconduct on the part of the accounting officer, our MM.
“In view of the seriousness of these allegations, I propose an investigation by an independent investigator who must focus on municipal projects, payments to contractors and service providers, and the existence of these projects and other exposing financial practices by the municipality.”
The deputy mayor recommended that Hlazo be suspended pending the finalisation of the probe as a way of protecting junior staffers who apparently blew the whistle.
Relating to Moleko, Nogumla told the council: “There have been threats to the CFO because of his refusal to process illegal payments. He has now hired his own bodyguards because he fears for his life. He is always expecting an attack any time.”
Asked about the claims, Moleko said he could not respond to the questions as he could not verify he was speaking to Dispatch.
“Please speak to the mayor. How did you get the report?
“Many people have been phoning me on this phone. Rather e-mail me so I can think clearly and give you clear answers.”
The e-mail account Moleko provided to DispatchLIVE turned out to be invalid. A similar e-mail listed as his on the internet bounced back.
DispatchLIVE also sent queries via WhatsApp on Thursday and Friday, but Moleko did not respond.
Nogumla on Friday refused to comment, and instead referred DispatchLIVE to Sokanyile’s chief of staff, Sisa Mpehle, who referred queries to council speaker Xolile Nkompela.
Nkompela confirmed that after the report was tabled and adopted in council acting municipal manager Fezekile Mphako was instructed to open a criminal case against Hlazo by Wednesday.
Nkompela also confirmed that Moleko had received death threats which he had reported to police but did not provide a case number.
Asked about the alleged payments to Amatola Water, at the time of writing on Friday spokesperson Nosisa Sogayise said documents which would form part of their response were “not readily available”.
Attempts to source a comment from Ruwacon were unsuccessful on Friday as its landline went unanswered, while an online company search for both Gcinasonke and Khwalo Constructions yielded no positive results as no records of them on Legal City could be found.
When DispatchLIVE conducted an online company search, there were more than 210 records for Valotone, with three of those listed and called on Friday, saying they had never had dealings with the municipality. The other companies could not be contacted.
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