This is how seven people ‘got their fibrils into R255m asbestos tender’

Businessman Edwin Sodi and two companies involved in “masterminding” an allegedly corrupt R255m asbestos audit project in the Free State were paid R51m before they had even started the work.

This is contained in a 39-page indictment prepared by law-enforcement agents against Sodi and six other accused, including three government officials.

The Hawks arrested five of the men on Wednesday in a well co-ordinated raid. A Gauteng-based businessman handed himself over on Wednesday afternoon, while a KZN-based businessman handed himself over on Thursday.

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The seven and their companies are also accused of attempting to steal R25m from the state and are expected to appear in a Bloemfontein court on Friday.

According to an indictment seen by Sunday Times Daily, the accused and their five companies face 60 charges, including corruption, fraud, money-laundering, contravention of the Prevention and Combating of Corrupt Activities Act (Precca) and contravention of the Public Finance Management Act (PFMA).

Apart from Sodi, the accused are human settlements head of department Nthimotse Mokhesi, human settlements officials John Matlakala and Thabane Zulu, Sello Radebe, Abel Manyeki and Sarah Mlamleli.

The companies are Blackhead Consulting, Diamond Hill Trading 71, 605 Consulting Solutions, MasterTrade 232 and ORI Group.

The arrests follow a tender the Free State department of human settlements awarded in 2014 to audit and assess households in the province with asbestos roofing.

The tender was awarded to Blackhead Consulting and Diamond Hill Trading. The joint venture later subcontracted MasterTrade 232 to do the audit. MasterTrade, in turn, subcontracted ORI Group to do the audit and assessment for R21.3m.

According to the indictment, Sodi and Blackhead Consulting were appointed in March 2014 by the Gauteng human settlements department for the asbestos eradication project.

“The first phase entailed an assessment to be carried out from March 2015 to April 2014 at a rate of R650 per house,” the indictment states.

The contract price amounted to R255m. An advance payment was made by the department to Sodi, Blackhead and Diamond Hill to the value of R51m.

The state alleges the price was inflated to R850 per house.

It further states that in May 2014, Sodi and Blackhead Consulting formed a joint venture with Diamond Hill and requested an appointment on risk “audit and assessment, handling of hazardous material and disposal of asbestos in the Free State”.

“The rates were outlined as door-to-door assessment at R1,300 per house, excluding VAT, and removal and disposal to an approved designated site at R32,760 per house,” the document reads.

On June 19 2014, Mokhesi requested approval to participate in a national department of human settlements contract. A month later, Mokhesi made a further request to participate in a contract between Gauteng human settlements and Blackhead Consulting, in terms of Treasury regulations.

In August, the Gauteng department approved the participation. The indictment states Mokhesi was assisted by Zulu in his submissions.

In October, Mokhesi appointed Sodi, Blackhead Consulting and Diamond Hill as the “professional resource team for the eradication of asbestos in the Free State” province.

“A service-level agreement was entered between the department and Sodi, Blackhead and Diamond Hill. The contract price amounted to R255m. An advance payment was made by the department to Sodi, Blackhead and Diamond Hill to the value of R51m,” the indictment says.

Two months before receiving an appointment letter from the Free State government, Sodi, Blackhead and Diamond Hill allegedly subcontracted work worth more than R44m to Radebe and MasterTrade 232.

During October, Sodi, Blackhead and Diamond Hill allegedly subcontracted work worth more than R21m to Manyeki and ORI Group.

The indictment states that in 2015, the auditor-general found the contract between Blackhead, Diamond Hill and the Free State human settlements department was irregularly procured. The companies were paid a further R139m in 36 payments.

The auditor-general found that the contract between Blackhead, Diamond Hill and the Free State human settlements department was irregularly procured.

Sodi, Blackhead, Diamond Hill, Radebe, MasterTrade 232, Manyeki and ORI Group did not adhere to the asbestos regulations, nor did they consult the South African Institute for Occupational Hygiene, as stipulated in the regulations, says the indictment.

Sodi, Blackhead and Diamond Hill allegedly paid R600,000 on behalf of Zulu as part payment for a vehicle, after Zulu allegedly assisted them in their appointment, it adds.

Sodi, Blackhead and Diamond Hill are also accused of paying Mokhesi R650,000 as a gratification.

The indictment further alleges that Zulu was also paid R1m.

A day before his arrest, Sodi told the Zondo commission of inquiry into state capture that his company made several payments to prominent ANC figures.

The ANC leaders flagged were health minister Zweli Mkhize, labour and employment minister Thulas Nxesi, ANC treasurer-general Paul Mashatile and deputy ministers Pinky Kekana and Zizi Kodwa.

He said he generously donated to the ANC, particularly during the 2014 election campaign.

Nxesi has promised full co-operation with law-enforcement agencies and the state capture inquiry regarding a R45,000 payment Sodi made for “underprivileged” schoolchildren at his request.

“In 2017, I was part of a general appeal to raise money to keep three children in school — the children of deceased trade unionists in financially distressed circumstances following the deaths of their parents,” Nxesi said on Thursday.

“Several sources were approached, including Mr Sodi. Mr Sodi made the following payments: R15,000 for school fees deposited directly into the learner’s school account, and R30,000 was paid directly for accommodation of two learners to allow them to continue with their schooling.”

Nxesi insisted that this did not amount to “gratification” as he personally had not benefited from it and  Sodi had not received anything from the minister in return.