Publication: Sunday Times Issued: Date: 2007-06-17 Reporter: Mpumelelo Mkhabela

Consortium Dumps Shaik to Keep Contract

 

Publication 

Sunday Times

Date

2007-06-17

Reporter

 Mpumelelo Mkhabela

Web Link

www.sundaytimes.co.za

 

Bad for business: Schabir Shaik

‘[Law] prohibits the government from dealing with criminals’

Fraudster loses his cut of driver’s licence deal

Convicted fraudster Schabir Shaik has lost his multimillion-rand stake in the consortium that produces the country’s driver’s licence cards.

The Prodiba consortium has been forced to ditch the jailed Durban businessman’s Kobitech after the Department of Transport threatened to cancel the entire deal.

The department moved to stop the contract because of the consortium’s association with Shaik. This followed pressure from Parliament’s Standing Committee on Public Accounts (Scopa).

The Public Finance Management Act and tender rules prohibit the government from dealing with convicted criminals.

Shaik’s Kobitech had a 33.3% stake in the R600-million-a-year contract before it was booted out.

Transport Director-General Mpumi Mpofu yesterday confirmed that she had received a letter from Prodiba this week stating that Shaik’s company was no longer part of the consortium.

This was in response to a letter she had written to Prodiba’s MD, André Appelgryn, asking him to explain why the department should not cancel the contract.

In the letter to Appelgryn, Mpofu said: “The government is obliged to promote the highest possible ethical standards in its dealings with the private sector. This is undermined by bribery and corruption, which fall within the realm of unethical and fraudulent behaviour.”

Speaking to the Sunday Times, Mpofu said the government no longer had the legal obligation to act against the consortium because Shaik’s company had been “eliminated” from the contract.

Mpofu said Kobitech’s stake had been “sold off” ­ but she could not say who had acquired it.

The Transport Department awarded the contract for manufacturing driver’s licences to Prodiba in 1997.

Prodiba was formed from a consortium of Face Technologies, Kobitech (representing Shaik’s Nkobi Holdings) and Thomson CSF (later renamed Thales), the French company implicated in the fraud and corruption *1 which saw Shaik sent to jail for 15 years.

The awarding of the contract by the department, whose minister then was Mac Maharaj, created controversy later because of the relationship between Maharaj, his wife, Zarina, and Shaik, at the time a non-executive chairman of Prodiba.

The five-year contract was renewed in controversial circumstances in 2004 ­ concluded by an official who did not have the authority to renew it.

The renewal of the contract came under fire from Scopa and the Auditor-General.

Scopa chairman Themba Godi said this week the watchdog body would closely monitor the developments around the Prodiba contract.

“We are looking forward to seeing this matter being brought to its finality,” Godi said.

With acknowledgement to Mpumelelo Mkhabela and Sunday Times.


*1       Why is Thomson-CSF not blacklisted?

The SCA has ruled that its conduct was criminal.