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Sunday Times STLive By Mzilikazi Wa Afrika, Rob Rose and Stephan Hofstatter , 2012-04-22

All Expenses Paid

WELL-FUNDED: Panganathan 'Timmy' Marimuthu
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There was drama yesterday as state lawyers threatened to interdict the Sunday Times from publishing its two-year investigation into how the R300-million secret service fund, under the control of crime intelligence boss Richard Mdluli, was looted.

Businessman Panganathan "Timmy" Marimuthu, a close friend of suspended national police commissioner Bheki Cele, with a conviction for drug dealing , and his family were paid more than R1.6-million from the fund in less than two years.

An extensive trail of documents shows that:

  • Marimuthu managed to get a string of relatives and cronies hired as "secret agents", including his wife, Neermala Moodley, daughter Shantal, son Lonvendren, brother Christie Mari-muthu - who is a former police officer previously accused of crimes - his son-in-law Viganderan Redhi and close friend Ariffa Govender;
  • "Medical claims" for more than R37000 were submitted to the fund on September 19 last year for "dentistry" done on Marimuthu by an Umhlanga dentist, to replace crowns;
  • Marimuthu's son, Lonvendren, claimed from the fund's medical aid for the treatment of "acute bronchitis";
  • An amount of nearly R50000 was claimed for the delivery of Marimuthu's grandson to his daughter Shantal in December last year. Shantal has been signed up as an "agent" for R25000 a month and given the rank of lieutenant-colonel; and
  • "Rental" payments of R25000 a month for 36 months were claimed by Ephesians 321 Construction, a company owned by Shantal, for "safe premises". A letter to the fund's overseer, Major-General Solly Lazarus, on January 29 2011 said the premises were needed so Cele could meet "undercover agents" with a "cover story that is watertight and would withstand any form of deep scrutiny".

Police are allowed to sign up secret agents, but are generally not allowed to recruit agents who have criminal convictions. The evidence suggests that the decision to sign up Marimuthu and his family was part of a political gambit cooked up by crooked crime intelligence officials.

Early yesterday state lawyers contacted the Sunday Times, demanding that documents relating to this story be handed over, and threatening to interdict the paper. However, after consultations between lawyers for the Sunday Times and the state, no interdict application was launched.

The friendship between Marimuthu and Cele dates back to the days when the police commissioner was MEC of transport in KwaZulu-Natal. Cele, Lazarus and the head of crime intelligence in KwaZulu-Natal, Major-General Dina Moodley, were VIP guests at Marimuthu's lavish 50th birthday party in the posh suburb of La Lucia, Durban, last July.

Lazarus reports to Mdluli, whose family members were also signed up as covert agents and implicated in looting the secret service fund.

In 1992 Marimuthu was sentenced to three years' jail for drug dealing after he was caught with 3 990 mandrax tablets - but never spent a day behind bars.

Evidence given to the Jali Commission into corruption in South African prisons in 2002 alleged Marimuthu paid R100000 to Westville Prison officials to avoid spending time in prison.

Marimuthu is understood to be the "prominent KwaZulu-Natal" individual named in a report by Major-General Mark Hankel as central to the looting of the secret service account.

Marimuthu and his wife Neermala Moodley were given the use of a black BMW X5, fitted with police-style blue lights, for more than a year - a vehicle understood to have been bought with secret service funds. The vehicle apparently vanished after questions began to be asked in crime intelligence circles about Marimuthu's role in the SA Secret Services, according to insiders.

Marimuthu was signed up as a "secret agent" early last year after an intelligence officer whose name is known to the Sunday Times wrote to Lazarus on February 18 2011 saying the "contact person" - not named - should be used as an agent because he is a "critical element" of a network that crime intelligence was interested in. The official is close to Cele and Marimuthu, and also attended Marimuthu's birthday party.

"An amount of R100000 is recommended as an operational expense to the contact person, and R25000 to each of his sub-contacts," the letter states. Marimuthu is understood to be the "contact person"; the "sub-contacts" are understood to be his family members. Lazarus approved the order.

Confronted with the allegations, the intelligence officer said: "I can't comment about the matter. I can't confirm or deny whether I gave money to Marimuthu."

Marimuthu referred all questions to his lawyers and warned the Sunday Times not to contact any member of his family. "You guys are tormenting my family. Stop it," he said.

His lawyer, Reg Thomas, refused to answer detailed questions, saying: "We will respond if our client is called to do so at the appropriate forum. If he is charged, we will respond. If not, then we won't."

Thomas said Marimuthu "is not an agent of the crime intelligence division, or member of the SA Police Service", and "did not bribe anyone from the Correctional Services Department".

Thomas would not explain why Marimuthu submitted his dental claim to the fund if he was not an agent, nor why he had been driving the BMW X5 understood to be owned by the fund.

Although Thomas denied Marimuthu was ever an agent, he conceded his wife Neermala Moodley and daughter Shantal " were employed by the state, yes".

He said that any exposure of their identities in the press was illegal.

When contacted, Shantal Marimuthu said: "I've got nothing much to say, other than the fact that allegations are allegations."

When asked why the secret fund paid for her child's birth, she said "you people need God - you have nothing better to do than antagonise innocent people".

She referred further questions to Thomas, who said: "We're not going to assist to verify anything at this stage."

Marimuthu has a chequered history, including being charged with murder in 1985 and convicted for dealing mandrax in 1992. H e never went to jail .

Evidence given to the 2002 Jali Commission showed that Marimuthu's three-year prison sentence on the drug charges was changed to "correctional supervision" due to "sinister" efforts by certain government officials.

The Jali Commission found that "unacceptable efforts were made to ensure that Mr Marimuthu did not spend a day behind bars, and the suspicion remains that there is a strong likelihood that money changed hands somewhere".

Fisher Joseph, a prisons anti-corruption investigator, testified that "we were anonymously informed that Marimuthu has paid a lot of money to certain officials to stay out of prison".

Reports at the time said Marimuthu held parties for politicians at five-star hotels while under "house arrest".

Hankel's report said the recruitment of this "prominent person" was intended to "influence [Cele] in favour of crime intelligence" - a rationale he described as "an abuse of the agent programme".

"It is alleged that especially the family members of the prominent person go about their normal private lives with no benefit to the SAPS. They were allegedly employed as a favour or as part of a pay-off to the prominent person," he said.

Although Hankel focus ed primarily on Mdluli, he concluded that the "extent of the criminal activity and maladministration in respect of the secret services account has serious implications, not only for [crime intelligence], but for the country as a whole".

In a bizarre response to questions e-mailed to him, Cele's spokesman, Vuyo Mkhize, said: "With all the respect that may be due, General Cele requests that Sunday Times first provide him with an objective assurance that its involvement in the matters pertaining to the SAPS and, particularly, the Crime Intelligence Division, is strictly and solely as an independent reporter of news, for him to see any point in resuming his well-documented cooperation with the paper in so far as its reportage is concerned."

Lazarus refused to answer questions from the Sunday Times. -Additional reporting by Mandla Zulu

  • investigations@sundaytimes.co.za