Publication: Fin24 Issued: Date: 2006-08-20 Reporter: Makhudu Sefara Reporter: Jackie Mapiloko

Shaik Firm 'Has Extra R1.5bn'

 

Publication 

Fin24
Date 2006-08-20

Reporter

 Makhudu Sefara, Jackie Mapiloko

Web Link

www.fin24.co.za

 

Durban - A consortium partly owned by Durban businessman and convicted fraudster Schabir Shaik has kept more than R1.5bn of taxpayers' money it shouldn't have. City Press has established that Prodiba, which was allocated a tender to manufacture the country's credit-card drivers' licences, has raised more than R2bn in the past seven years.

In terms of the contract, Prodiba was to have kept R548m of a total R2.055bn generated through licence fees.

The calculations were done on the basis of information obtained from the transport department and Prodiba.

The department said it cost taxpayers R150 to get a licence, and R40 of this was supposed to be sent by it to Prodiba.

Although Prodiba's website said 11 million people had converted or acquired new drivers' licences by August last year, officials said on Friday that the latest figure stood at 13.7 million people.

Profit share could be more

If R40 is deducted from the R150 paid by 13.7 million people, Prodiba would have R548m.

But, Prodiba's share could be even more.

Transport department spokesperson Collen Msibi confirmed that the issuing fee for drivers' licences was R150, but that Prodiba's share depended on the number of cards it produced.

"Our contract with Prodiba is that the more cards it produces, the more its profit share.

"So, the standard share is R40, but it can increase to R60 depending on the volume of cards manufactured.

"According to the rate of people getting licences, Prodiba could be making more money," said Msibi.

The transport department, which was led by Mac Maharaj at the time the decision was taken, was to have paid Prodiba its share as people got their licences.

Contract renewed without authority

It now turns out the department had "no clue" how much it made or paid to Prodiba or whether it was owed any money.

The five-year contract with Prodiba, which had expired, was recently renewed by an official who did not have the authority to do so *1.

When the department wanted to take action against the employee, he resigned and the matter was never pursued.

City Press has learnt that parliament's select committee on public accounts (Scopa) will adopt a resolution on Tuesday asking auditor-general Shauket Fakie to undertake a forensic investigation to establish where the money is.

Scopa chairperson Themba Godi said it was worried by the chaotic state of affairs relating to the management of funds flowing from the drivers' licence contract.

Did not have 'foggiest idea'

"Our concerns stem from the fact that when we summoned senior department officials to account to us, they had no clue what was going on," he said.

Godi said that once the resolution was adopted, it would immediately be sent to Fakie.

"We became seriously worried when we discovered that even the new director-general (Mpumi Mpofu) does not have the foggiest idea what is happening with the account into which money from the licences was supposed to be deposited. This is worrying," said Godi.

He said the resolution would have the terms of reference and the timeframes by which the A-G ideally should have finished his work.

Although the national treasury had accepted post facto (after the fact) the signature of the unauthorised official renewing the contract, Godi said Scopa had asked a deputy director-general to brief it this week to ensure there was "no collusion and that this post-facto acceptance of the signature was above board".

Trip to Disneyland

"Listening to the department, one had a sense of people with a hands-off attitude to the account. They did not come across as people in total control of the situation.

"If we were satisfied they were in control, we would not have considered a forensic audit," said Godi.

He said that since Shaik had been found guilty by Durban High Court, the portfolio committee also wanted to investigate if there was a way of disengaging him because of his criminal activities.

The awarding of the contract in 1997 by Maharaj's department caused controversy because it was later discovered that Shaik, who was Prodiba's non-executive chairperson, had paid for a trip to Disneyland for Maharaj and his wife, Zarina.

Shaik also had made several payments into the Maharajs' bank accounts before and after he had left the cabinet in 1999.

FirstRand, where Maharaj had served as a non-executive director after leaving politics, investigated the claims and found that Shaik had made total payments of R328 898 allegedly for work done by Zarina.

However, there were two additional payments of R100 000 each for which the bank could find no proper explanation.

'Money is still there'

Shaik was convicted of bribing ANC deputy president Jacob Zuma and is out on appeal.

Prodiba's bureau manager, Riaan Visser, was aware of an impending forensic audit, but said his company had not done anything illegal about the accounts.

"A forensic audit is going to take place and it will prove that although we have access to the department's account, we haven't touched the money. All their money is still there," he said.

Visser would not comment on the balance of each account.

Msibi said he was not aware of an impending forensic audit, but knew that an opposition member of parliament had proposed that Prodiba be investigated.

He said if an investigation was being conducted, he did not think it had anything to do with Prodiba's alleged illegal operation of the two accounts.

"I don't think this can be correct. How can a department have an account and not know what goes on in it? It's not possible," said Mnisi.

When told the new director-general did not have a "clue" about the management of the two accounts, Mnisi said: "It can't be true, we are fully aware of our own affairs."

Shaik owns one-third of Prodiba

Godi said money received by the government was not recorded in its financial statements.

"The D-G also said it was unable to access the money for its own use," he said.

The contract was awarded in 1998 to Prodiba, one-third of which is owned by Schabir Shaik.

Another third is owned by Thomson CSF Holdings, the French arms company named in the case against Shaik *1. Face Technologies owns the remainder.

With acknowledgements to Makhudu Sefara, Jackie Mapiloko and Fin24.


*1       This is nonsense. The Department of Transport new that the contract was coming up for renewal and was investigating ways for preventing its renewal based on the Shaikh conviction. This was long before the unauthorised official suddenly approved the renewal.

This is unlawfulness or negligence on a grand scale by the Department.

The official is probably now working for Prodiba or Nkobi Holdings or Thomson-CSF (now Thales International) or got such a grand backhander that he's retired and living a luxurious life in the Bahamas or some non-extraditable haven.

But this is not a job for a polluker like Fakie, it's a job for the DSO.


*2      The torture never stops.