‘Dubious relationship with truth’ gets eThekwini city manager barred from work

eThekwini city manager Sipho Nzuza, an accused in the Durban Solid Waste (DSW) corruption and fraud matter, has been barred from going back to work by order of court.

In a 40-page written ruling dismissing his application for relaxed bail conditions, Durban regional court magistrate Garth Davis imposed even harsher conditions, finding he had not been honest with the court and, in essence, was not a fit and proper person to be the city’s accounting officer.

Davis also ruled that he may not communicate with any of the witnesses in the matter, and that he may not be involved in any disciplinary proceedings or tender and supply chain management processes for the duration of the trial.

Nzuza and his co-accused, including former mayor Zandile Gumede, have been served with indictments to appear in the Durban High Court. A trial date is expected to be set later this year.

Nzuza was arrested in March last year and became accused number 17 on the charge sheet comprising councillors, city officials and service providers alleged to be involved in the R320m racket.

He was granted bail with conditions.

“Rather starkly, this application has caused the spotlight to fall upon the role played by the custodians or gatekeepers of public funds within the municipality ... and with those charged with oversight responsibility to fail to perform or are corrupt themselves with devastating consequences,” Davis said.

Giving a brief overview of the state’s case, Davis said during March 2018 the head of the City Integrity and Investigation Unit (CIIU), Mbuso Ngcobo, authorised Integrity Forensic Services (IFS) to probe irregularities at DSW.

IFS reported that councillors and employees had acted in common purpose to defraud the municipality by circumventing supply chain management to secure the award of tenders in favour of certain service providers.

The report immediately implicated senior managers Robert Abbu and Sandile Ngcobo, accused numbers one and two on the indictment.

Davis said Abbu was no stranger to controversy and had been implicated previously in another corruption matter.

But when his line manager drafted a notice of intention to suspend him, Nzuza had intervened and instructed he rather be transferred to a new post in the office of the city manager, “head of special projects”.

When challenged about this, Nzuza told the deputy city manager of trading, Philemon Mashoko, that he had been “instructed politically” to do this.

It was in this position that Abbu, with Ngocbo, manipulated the DSW tender, with resultant benefits given to municipal officials, including payments, house renovations and, in two instances, Jaguar cars.

Davis said the investigating officer had told the court cellphone tracking at the time of the award of the tender “showed a large mesh of calls” taking place between Gumede, Nzuza, Abbu, Ngcobo and the four service providers.

While Nzuza, in his evidence, admitted this, he said it was due to the high-profile nature of the tender and the urgency to resolve service delivery.

But Davis said: “The suggestion by senior counsel (for Nzuza) that this kind of communication is normal ... needs to be seen in the context where office bearers are expressly forbidden from interfering with SCM issues.”

He said at the outset the state had wanted to use Nzuza as an “accomplice” 204 witness, given he had admitted to knowledge of the tender manipulation, but said he was “under duress” from Gumede and executive committee member councillor Mondli Mthembu.

He was only arrested when the state deemed he was no longer cooperating and believed he was assisting the other accused. 

He was initially suspended from work, though no disciplinary proceedings were initiated against him.

“This is an unfortunate recurring theme in this matter. No disciplinary proceedings have been completed against any of the accused in this matter, with the result that, as the investigating officer put it, those responsible for the fraud remain on the crime scene.”

After his suspension lapsed, he took special leave, but returned to work as city manager in September last year.

He was rearrested in November for breaching his bail conditions, with allegations that he had interfered with potential witnesses and had been involved in tender issues. To get bail he agreed to new conditions, which effectively prevented him from performing his functions as city manager.

This, he said in his renewed application to be able to return to work which began in January this year, impaired his right to work.

He said he was the best person for the job and believed he could  “turn around the financial difficulties the city is in”.

But Davis disagreed.

He said it was unfathomable that Nzuza had not disciplined Abbu and Ngcobo and “it suggests strongly that they were protected”.

His excuse that the evidence had been removed by the police was not true.

According to evidence the docket had been given to him and, if it had not, there was no record that he had asked for it. He had simply abdicated his legal responsibility.

Davis said Nzuza had been instrumental in hiring Morar Incorporated to investigate the Revenue Management System and he had seemingly stifled an investigation into how R58m was paid to Morar without any paper trail or e-mail record.

Six days before Nzuza was arrested the city awarded a R19m tender to a company called Uhlanga, previously owned by Hlenga Sibisi, who was already accused number five in the DSW case.

Sibisi had, days before, resigned as a director and been replaced by the sister of accused number three, Mzwandile Dludla.

This, Davis said, “screams of being a front” to remove the company’s blacklisting and “it is not in dispute that the overall responsibility for oversight rests with the city manager” who, at that time, was acutely aware of the various links that Dludla and Sibisi had to the alleged corruption and pay-offs to council employees.

Referring to a letter written by Treasury head Krish Kumar addressed to the (new) mayor, Mxolisi Kuanda, Davis said it was obvious Nzuza was placing him under intolerable pressure and it was conclusive proof Nzuza was involved in supply chain management issues which, at that time, his bail conditions specifically barred him from.

Davis also referred to evidence of the investigating officer that witnesses were under severe psychological stress because of Nzuza’s presence at work and were now reluctant to testify.

It is clear that by virtue of his position he is able to greatly influence tender processes. He has caused tenders to be granted that appear patently unlawful.

—  Durban magistrate Garth Davis

Davis said Nzuza, who earns R3,6m a year, and others had chosen to ignore their legal obligations to provide meaningful oversight over the fiscus of the municipality.

“At the outset, CIIU and IFS investigation revealed huge fraud and illegal peddling of influence involving the mayor and councillors, that the city manager had admitted to being influenced to being part of what was known months before his arrest. Having full knowledge of this, council and executive committee did nothing.”

He said Nzuza had been dishonest, painting himself as a person who uncovered the crime rather than being involved in it; he had protected others and favoured those charged with large tenders which a minimum of investigation would have exposed as being potentially fraudulent.

“In light of the seniority of the city manager, his powerful position and his ability to negatively impact on those employed has clearly led to witnesses being intimidated and being reluctant to testify.

“It is clear that by virtue of his position he is able to greatly influence tender processes. He has caused tenders to be granted that appear patently unlawful, the Morar one with no supporting documentation and the Uhlanga tender which is bedevilled by blatant fronting.”

The costs of these two tenders is R77m and the latter one occurred at a time when he knew he was about to be arrested. It cannot just be coincidence that the beneficiaries just happen to be two of the accused in the DSW matter.

“He has a dubious relationship with the truth.”

Nzuza’s lawyers did not respond to a request for comment, but he has an automatic right to appeal to the high court.