November 23 2010 at 09:30am

http://www.iol.co.za/news/south-africa/kwazulu-natal/amigo-lawyers-in-dock-1.875700

Three Durban lawyers were arrested on Monday on money laundering charges relating to the “cleansing” of the million-rand kickback businessman Gaston Savoi allegedly gave former KZN treasury head Sipho Shabalala in return for government contracts.

Nozibele Phindela, Jabulani Thusi and Ian Blose - all directors of city law firm Kuboni & Shezi (now Kuboni Inc) - were arrested at their city centre offices and taken to Pietermaritzburg, where they made a brief court appearance. The law firm itself has also been charged with money laundering.

They now become accused numbers 11, 12, 13, and 14 in the high-profile case in which Shabalala, his wife Ntombi, Savoi, ad- advocate Sandile Kuboni, two former health directors-general Busi Nyembezi and Yoliswa Mbele, and the head of Rowmoor Investments, Lindelihle Mkhwanazi, are facing criminal charges relating to the award of contracts to Savoi’s Intaka Holdings.

It is alleged that tender procedures were by-passed in order to award Intaka contracts for water purification and oxygen plants for the departments of health and local government.

In return, it is alleged, Savoi gave Shabalala just more than R1-million.

It is the State’s case that this money was laundered through the trust account of Kuboni & Shezi at a time when advocate Sandile Kuboni was running the law firm and the three lawyers in the dock yesterday were employed there.

The State says that after Sandile Kuboni left the firm they took over the business and between May and August 2007, started to disperse the alleged corrupt payment to a number of entities on the instructions of Shabalala and his wife.

In total they are facing 17 counts of money laundering.

Before yesterday’s arrests, the State had subpoenaed the records of the law firm - more particularly the file with the code-name “Salamax” - which contained the records of who authorised the payments and when and on whose instructions.

According to documentation before the court, the money from Savoi was paid into the Salamax account on March 12, 2007, just one week after Intaka received payment from the provincial department of local government for R44,5m for 20 water purification plants for which, it is alleged, it should have only charged R14m.

The State, in a forensic report, claims to have proof of the money laundering but wanted the records to assess who had actually given instructions for payments.

However, the three present directors of the law firm put up a fight, and refused to give the documents, citing attorney-client privilege. Last week the matter was to be argued before a Durban civil court magistrate but it got nowhere because the magistrate said she did not have jurisdiction to hear it.

At their brief court appearance before magistrate Chris van Vuuren yesterday, they were granted bail of R15 000 each and cautioned to appear in court again on December 2, when they will be in the dock with their co-accused.

Savoi is also standing trial in the Northern Cape on similar charges involving MEC John Block. - The Mercury