SIU adamant part of R150m Digital Vibes money found its way to Zweli Mkhize's family

The Special Investigating Unit (SIU) is adamant that a substantial portion of the R150m contract the health department awarded to Digital Vibes — a company alleged to have close ties to former health minister Zweli Mkhize — was siphoned to his family.

The SIU filed a joinder application before the Special Tribunal on Tuesday to recoup funds from six companies it alleged had unduly benefited from the contract.

The SIU wants the companies added to a review application to declare the Digital Vibes contract unlawful, set aside and the money paid back to the state.

The companies are Mateta Projects, owned by Mdu Mthethwa, which allegedly received funds from Digital Vibes and distributed it to All Out Trading, Tusokuhle Farming, Azwakele Trading and Projects and/or Sithokozile Khaliphile Mkhize, Cedar Falls Properties and Sirela Trading.

Tusokuhle and Sirela were allegedly linked to Mkhize’s son Dedani, while Cedar Falls was allegedly linked to Mkhize’s wife Dr May Mkhize. She was the sole director of the company. Cedar Falls was alleged to have received R1.8m. The money was allegedly used to pay the bond on a farm belonging to her.

Barry Roux, for the SIU, described an apparent web of payments flowing from Digital Vibes to several companies before ending up in the accounts of companies allegedly linked to the Mkhize family. Roux alleged these companies were used to conceal a trail of money laundering and distance the Mkhize family from illegal activities.

Judge Lebogang Modiba heard arguments from the companies, who said the SIU was clutching at straws and had no case against them.

The companies said they had no direct dealings with the government.

John Pammenter, representing May Mkhize and Cedar Falls, said: “All you will see against Cedar Falls is that the sole director happens to be the wife of the former minister ... But what you will not see in those papers is anything that points a finger at Cedar Falls or its sole director.”

Gregory Harpur, for Tusokuhle and Sirela, submitted that while the companies had dealings with Mateta, it was unfounded for the SIU to say the funds paid to them by the company were the proceeds of crime.

“In the same way that a bank is not enriched when it is obliged to account and is liable to its customer, so too were Tusokuhle and Sirela not enriched because they were obliged to and did perform in terms of the contract [they had] with Mateta,” court papers read.

They argued that money, unless it formed part of an identifiable separate fund, lost its identity and became owned by the banks where it was deposited.

Harpur said the SIU was overzealous and based its accusations of undue proceeds on wild allegations.

“The money was paid from the government to Digital Vibes' bank [account]. It then becomes wholly mixed up with the rest of the bank’s money and lost its separate identity. It was never held in a separate fund.

“The money was then paid from the Digital Vibes bank to Mthethwa’s bank and there again it was mixed up with that bank’s money, and then it gets down to Sirela’s bank and again it's mixed up there, and then to Tusokuhle’s bank where it was again mixed up with other monies.

“It’s a hopeless case to try to trace that money and say the money that eventually ended up with Tusokuhle and Sirela was the stolen money. It wasn’t. It was some other bank’s money and the money had long since lost its identity,” argued Harpur.

On Tuesday, the tribunal heard that Mateta had at one point received more than R10m from Digital Vibes, paid the money to the two companies, but later repaid the funds to Digital Vibes.

Harpur said it was pointless to go after the two companies because the SIU was seeking what could be regarded as a “double payment”, which the SIU had no right to do.

His clients were not implicated in the review application the SIU filed to have the Digital Vibes contract set aside and he accused the SIU of overreach, saying a line had to be drawn somewhere.

Failure to do so would mean the SIU could also try to recoup the money from employees of Tusokuhle and Sirela if they believed these funds were, for example, used to pay their salaries.

Judgment in the case was reserved.

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