How Dudu Myeni's water board 'laundered more than R2m in 40 days'

The Zondo commission of inquiry into state capture heard on Tuesday that R2.3m siphoned from Umhlathuze Water was allegedly laundered in 2015 using various companies.

The activities happened while Dudu Myeni was chair of the board, said a witness known as Mr X.

His company, Isibonelo Construction, was used as the conduit for money paid via inflated invoices to be disbursed to a company called Sifezakonke Engineering. 

In January 2015, Klomac Engineering, a water board supplier, paid R2.39m into Isibonelo's business account, at the instruction of Mbiniseni Majola, an internal engineer at Umhlathuze, testified Mr X. 

Isibonelo received the money without doing any work for Klomac, he said.

The payment from Klomac to Isibonelo was deposited on January 26 and, about a month later, "vanished" to Sifezakonke, on Majola's instructions.

The transfers to Sifezakonke happened in tranches, the first being a R150,000 payment on February 2.

Mr X's company transferred a further R850,000 to Sifezakonke a day later.

On February 11, Isibonelo transferred another R1m from its business account to a money-market account.

Asked why he did this, Mr X said: “Isibonelo had a separate account, which was a money-market account. As a legitimate business we did business on our own, which we would be paid for, but then there was money in our account which was not ours.

“So we had to shift the money from Klomac, which was not ours, so we could receive our own income without confusion.”

The R1m that was transferred from Isibonelo's business account to its money-market account was transferred back to the business account on March 9.

Thereafter, “I transferred R1m to Sifezakonke as per instruction from Mr Majola”, said Mr X. 

The witness was also probed on whether Majola ever requested cash payments from the monies paid to Isibonelo by Umhlathuze suppliers.

“Sometimes he would request hard cash, but it was never equal to the [amounts transferred] because of bank limits,” he said.