No bail for ‘belligerent bully’ Mhlathuze Water CEO

Suspended Mhlathuze Water CEO Mthokozisi Pius Duze — accused of R38m corruption and fraud and of intimidating witnesses — has been denied bail.

Durban specialised commercial crime court magistrate Garth Davis said his conduct had shown him to be a “belligerent person who is willing to bully individuals”.

“Witnesses are deserving of protection,” he said in a written ruling handed down late on Tuesday.

Last week, the magistrate granted bail of R25,000 to KZN premier “chief of staff” Dr Nonhlanhla Mkhize, who is not an accused in the corruption matter but has been charged, along with Duze, local attorney Sthembelo Mhlanga and Siphiwe Mabaso — a “debt collector” accused of pretending to be a National Intelligence Agency (NIA) agent — with intimidation and defeating the ends of justice.

The charges mainly relate to allegations that Mkhize sent Mabaso — whom she described as an NIA agent — to the home of Mhlathuze Water board chairperson Thabi Shange, threatening and forcing her to give him a recently completed forensic audit report which implicated Duze and Mhlanga in wrongdoing.

Shange alleges Mabaso forced her to call Mhlanga “to sort out their differences”.

Mhlanga attached the report to an email he sent the board in which he made veiled threats, mentioning he had just finished a stint as an acting judge.

In the bail application, the state put up cellphone records of all four accused, showing they had contact with each other just before and after Mabaso met Shange.

Davis said this evidence appeared to be “damning”.

He, however, granted bail to Mhlanga — in the amount of R250,000 — and set bail for Mabaso at R25,000.

I can be ruthless. When I’m pushed to the corner, and you’ll not see the kindness of me, the last person who can leave Mhlathuze ... it’s me, I’ll be the last man standing here.

—  Suspended CEO of Mhlathuze Water, Mthokozisi Pius Duze

Regarding Mhlanga, he said there was no indication of him using the report to further undermine the investigation into the fraud and corruption.

He said due to the amount of money involved and “the inclination that there might be to interfere with witnesses”, the amount of bail should reflect this. Mabaso, he said, was probably just a “paid worker”.

He said he had not been fully appraised of the threats he made to Shange and their consequences.

Turning to Duze, Davis said there was evidence that he had threatened staff at the water board, auditors who were conducting the probe and a forensic investigator.

He said the state’s fears — that he would intimidate witnesses — were not without foundation.

He referred to a transcript of a meeting where Duze had addressed senior employees, which displayed “a disturbing set of comments pregnant with threat and consequences”.

“His own words indicate a great deal about his character, personality and belligerence,” the magistrate said, “which were unbecoming of his role as a highly paid leader of a large state utility.”

The transcript reflects that he said: “... Because I can be ruthless. When I’m pushed to the corner, and you’ll not see the kindness of me, the last person who can leave Mhlathuze ... it’s me, I’ll be the last man standing here. I can push all of you out. All of you, one by one like flies gone, gone, gone, and I will deal with you in CCMA gone, gone, gone tomorrow morning, gone, I will fire you without reason ... gone just like that ... ”

Davis said this innuendo came straight after he referenced the auditor-general SA audit (which kick-started the Hawks investigation) — a “thinly veiled warning to staff to toe the line”.

He said at that time, Duze had not been charged.

Now he had been charged, “circumstances had changed”. 

“He also has the means to intimidate those involved ... he hires, at his own cost, bodyguards armed with weapons of war to protect him.”

Referring to the corruption charges, the magistrate said it appeared that the state had a strong case against Duze and Mhlanga and two other accused — former Mhlathuze CFO Babongile Mnyandu and attorney Thabiso Khumalo. The latter two, granted bail early last week, are alleged to have colluded to appoint Mhlanga Inc to a panel to do legal work for the water authority.

He said evidence suggested that Mhlanga Inc had been paid R1.2m even before its appointment was signed off by Duze and Mnyandu.

The law firm was part of a panel of 16 service providers, but had been given 80% of the work and had pocketed more than R37.9m from this.

The evidence was that the firm, with only 10 staff members, did not have capacity to perform the work and Duze and Mnyandu had authorised “outsourcing” to another firm.

Witness statements showed that invoices were presented to the water authority when work had not been done.

Mhlanga Inc was, at one time, paid R21m in fees, generated over 64 days, during the height of the Covid-19 lockdown.

The state alleges Duze received R16m and Mnyandu R760,000 in “kickbacks” from Mhlanga.