Former KZN treasurer Sipho Shabalala began serving his 15-year prison sentence on Tuesday, after Pietermaritzburg high court judge Dhaya Pillay denied his application for leave to appeal his convictions and sentence for his role in the so-called “Amigos Case”.
In June this year, Pillay found Shabalala, 56, guilty of corruption, fraud, money-laundering and contravening the Public Finance Management Act in connection with the award of a R44m contract to Cape Town businessman Gaston Savoi’s company, Intaka, in return for a R1m “sweetener” to the ANC.
Savoi was paid with money from the poverty alleviation fund.
Last week, Pillay handed down sentences amounting to 45 years, but ordered that they run concurrently with the 15 years she imposed for corruption.
Shabalala was first arrested, along with Savoi and others, in 2010 and has been on bail since then.
Pillay extended his bail until the outcome of his application for leave to appeal.
NPA spokesperson Natasha Ramkisson-Kara confirmed on Tuesday that leave to appeal had been denied — and the judge had cancelled his bail.
Advocate Elaine Zungu, director of public prosecutions in KZN, welcomed the court ruling.
She said it was evidence of great strides in the fight against corruption, which would continue.
Pillay, in handing down sentence, said she had considered imposing a heavier sentence but had “restrained herself” given Shabalala’s age and health.
Shababala, who did not testify during his trial, had told a probation officer he had been acting on the instructions of his “principals” when he pushed for the approval of the contract and waiver of procurement procedures.
He (Shabalala) held the purse strings — he was a powerful man and had abused his position. In sitting on the round-robin panel, he had been a player and a referee.
— High court judge Dhaya Pillay
Pillay described his failure to testify as “tragic” and said he was taking the fall while the real villains went free.
Shabalala was initially arrested along with 22 others, including ANC heavyweights Mike Mabuyakhulu and Peggy Nkonyeni, in what became known as the “Amigos Case” — a reference to how the accused referred to each other in correspondence.
Charges were later withdrawn against Mabuyakhulu and Nkonyeni — but the Zondo commission recently recommended they be recharged.
Shabalala is the first accused in the matter to be convicted and sentenced after he applied for a separation of trials.
In convicting him, Pillay found that he, as head of treasury had flouted procurement processes and had put pressure on colleagues to approve the award of contract.
She said he held the “purse strings” — he was a powerful man and had abused his position. In sitting on the “round-robin” panel, he had been a player and a referee — he initiated and recommended the procurement of the plants, known as Watakas, and then pushed for usual tendering processes to be waived.
He did this to secure the so-called donation of R1,053,000 to the ANC from Savoi.
Pillay said not only was the donation “absolutely prohibited”, Shabalala had initially not disclosed it to the party and had used some of it to pay off his debts.
The judge noted the role of then economic development and finance MEC Zweli Mkhize in the saga, saying he had supported the deal and had urged then local government MEC Mabuyakhulu to sign off on the release of funds from the poverty alleviation fund.
She said municipalities had been “burdened” with Watakas, which could not be used at a time of drought .
She found that both MECs and Shabalala had influenced the procurement of Watakas and Shabalala “drove the project” until Intaka was paid, in full, before it supplied any of the purification plants, giving Savoi a “free hand” to manipulate the terms of the deal.
She said it did not matter whether the payment of R1.053m was to bribe Shabalala or a donation to the ANC, or both.
“On either basis it was an unlawful inducement.”
Savoi, and the other accused will be back in court on November 14.
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