In a significant legal win for the Special Investigating Unit (SIU) and the Ekurhuleni Metropolitan Municipality, the Special Tribunal has dismissed a counterclaim by Kubwa Kazi Construction, Lebaka Construction, and their directors. The case involves allegations of fraud linked to the Vosloorus Taxi Rank construction project, with the contractors accused of submitting a fraudulent R1.97 million invoice for undelivered materials.
Details of the Fraud Case
The fraud allegations stem from a 2014 contract worth R17.8 million, awarded to Kubwa Kazi Construction and affiliates for the construction of the Vosloorus Taxi Rank. According to the SIU, investigations uncovered:
- Fraudulent Invoice: A fake invoice for R1.97 million was submitted, claiming payment for materials that were never delivered.
- Collusion Among Defendants: Individuals including Jacob Phungula, Veronica Z. Mabena, and Joy M. Seale allegedly collaborated to submit fraudulent documents.
- Admissions of Fraud: Some defendants reportedly admitted to knowing about the false claims.
Counterclaim Dismissed by Special Tribunal
The defendants filed a counterapplication, alleging that the Ekurhuleni Municipality owed them payment for an unrelated project. However, the Tribunal dismissed this claim on 14 January 2025, stating:
- The Tribunal lacks jurisdiction to entertain unrelated claims.
- The defendants were ordered to cover the legal costs incurred by both the SIU and the municipality.
SIU Investigation and Proclamation R28 of 2018
The SIU investigation, authorised under Proclamation R28 of 2018, focused on maladministration, unauthorised expenditure, and fraud in public transport facility contracts in Ekurhuleni. The Vosloorus Taxi Rank project was a key focus.
As per the SIU Act, the unit has the authority to:
- Refer evidence of criminal conduct to the National Prosecuting Authority (NPA) for prosecution.
- Initiate civil actions to recover funds lost to corruption and maladministration.
Significance of the Ruling
The SIU hailed the Tribunal’s decision as a milestone in safeguarding public funds, stating:
- “The dismissal of the counterclaim strengthens the case against the accused and sends a clear message that attempts to derail justice will not be tolerated.”
This ruling marks progress in the SIU’s broader mission to combat fraud and corruption in municipal projects.
Key Takeaways
- Contract Value: R17.8 million
- Fraudulent Invoice: R1.97 million
- Tribunal Decision: Counterclaim dismissed, legal costs imposed on contractors
- Next Steps: Evidence to be referred to the NPA for prosecution
The SIU continues its efforts to hold those responsible for defrauding public funds accountable, ensuring justice for the residents of Ekurhuleni.
