Oct 20, 2010 11:47 PM

http://www.timeslive.co.za/local/article719008.ece/Simelane-gets-his-hands-dirty

Chief of NPA returns to court for KZN tenders trial

The National Prosecuting Authority yesterday brought out its biggest gun, Menzi Simelane, to prosecute former Ithala Bank CEO Sipho Shabalala on fraud and corruption charges.

Shabalala, who also headed the KwaZulu-Natal Treasury, his wife, Beatrice Ntombenhle Shabalala, his attorney, Sandile Kuboni, and Uruguayan businessman Gaston Savoi handed themselves over to the police in Pietermaritzburg early yesterday.

Two former senior Department of Health officials, Busisiwe Nyembezi and Yoliswa Mbele, and businessman Lindelihle Mkhwanazi, also surrendered to the police.

Shabalala, as the head of the KwaZulu-Natal Treasury between 2004 and 2007, is accused of using R44-million from the provincial Poverty Alleviation Fund to pay Savoi's company, Intaka Investment, for water-purification plants at an inflated price and allegedly received a kick-back of R1.05-million.

Shabalala allegedly told the provincial administration that the funds were needed urgently and claimed that Intaka Investment was the only supplier of the plants.

"At a certain stage, Shabalala became aware of the quality of drinking water in KwaZulu-Natal. He decided, without testing the market, or a determination of the existence of manufacturers and suppliers of water-purification plants, that Intaka Investment was the only manufacturer and supplier of water-purification plants," the charge sheet states.

"He further decided that the ordinary procurement procedures be circumvented."

Shabalala's wife has been charged with money laundering for allegedly keeping R300000 of the alleged R1-million kickback in a bank account of her company, Blue Serenity.

Shabalala's lawyer was also charged with money laundering. He allegedly deposited money said to be a kickback into his trust account.

"Kuboni subsequently utilised part of the portion of the money to pay Shabalala's creditors and distributed the remainder amongst Shabalala and his wife's company," the state alleges.

Nyembezi and Mbele, who worked in the provincial Department of Health, are accused of manipulating tender processes and ignoring the defects of the oxygen units in the purification equipment in their awarding of the contract to Savoi's Intaka Holdings.

Mkhwanazi, who at the time was the boyfriend of former health MEC Peggy Nkonyeni, is accused of money laundering in that he allegedly received R1-million from the Department of Health for services that he did not render.

Representing the state in the Pietermaritzburg Regional Court yesterday, Simelane put on a prosecutor's robe for the first time since his appointment as head of the NPA last year.

NPA spokesman Mthunzi Mhaga told The Times that Simelane was "not afraid to get his hands dirty" and had to lead by example.

He refused to say whether Simelane would remain as the prosecutor in this trial, or why he had chosen this particular case to return to the front line.

Simelane said the state did not oppose the granting of bail.

The bail of Shabalala and his wife was set at R50000 each. The other accused, excluding Savoi, paid R30000.

Savoi was released on a warning because he is out on bail for a similar case involving alleged tender fraud. The seven accused appeared to be in high spirits during their first court appearance and battled to hide their smiles.

Savoi pulled his cellphone from his pocket and began taking photographs in the courtroom.

The accused will appear in court again on December 2.