Ex-spies in battle over secret cop slush fund

The South African Police Service is being held to ransom by three former crime intelligence officers who have frozen the bank accounts of a covert police company.

The trio have applied for the liquidation of Universal Technical Enterprise CC (UTE). They want a slice of R32-million stashed in bank accounts belonging to the company.

The company bankrolls covert operations - paying police informers, buying vehicles, renting houses and even setting up businesses for the spies.

Colonel Lerato Thwene, Mulangi Mphego - who was suspended for allegedly interfering in the corruption investigation of former top cop Jackie Selebi - and Brigadier Zwelibanzi Nyanda have gone to the High Court in Pretoria in a bid to have UTE liquidated.

The court battle has laid bare the goings-on over UTE and its slush fund, which has allegedly been looted by several senior crime intelligence officers, including former crime intelligence boss Lieutenant-General Richard Mdluli.

A secret report said to have been handed to the then acting national police commissioner, Lieutenant-General Nhlanhla Mkhwanazi, in 2012 outlines how secret funds from UTE were used to buy a holiday home on the KwaZulu-Natal North Coast for the exclusive use of the unit's top officers.

Mphego, Thwene and Nyanda, who claim they are still members of UTE, confirm that there is "a significant amount of money" in the company's bank accounts and that a portion of this included advance payments made by the SAPS "for intended future services".

They say that it "appears quite probable" that a portion of the funds would have to be returned to the police. "Despite our best efforts, the applicants [the trio] are unable to determine the exact amount that has to be returned to the SAPS and for this reason we require the intervention of a liquidator."

But they state: "The balance of the funds belongs to the applicants."

They claim that because of changes in the SAPS leadership, including the appointment of national commissioner General Riah Phiyega and other senior appointments in crime intelligence, "the relationship between the respondent [UTE] and SAPS has come to an end".

But Phiyega and Colonel Heine Barnard from crime intelligence, who are both opposing the liquidation, have denied the trio's claims.

Phiyega, in an affidavit, confirms that the company is funded by the police's secret service account and that more than R32-million is in its bank accounts. "Crime intelligence officers perform their functions by conducting network operations and undercover or covert operations," the affidavit reads.

Phiyega says that Mphego, Thwene and Nyanda "caused the bank to freeze the accounts" of UTE, although they are no longer involved with it.

"The crime intelligence division is unable to access the money to provide a much needed service in combating and detecting crime in the RSA.

"I am the accounting officer of the SAPS. I have a duty to intervene in these proceedings and ensure that the respondent [UTE] does not get liquidated ... by persons who have no right to bring the application."

Barnard says in his affidavit that crime intelligence has always assigned senior officers in the unit "to manage and control the secret funds". He says the trio cannot be allowed part of the cash in the company's bank accounts because it is prohibited by provisions in the Secret Service Act.

Mphego, Thwene and Nyanda said they were the registered members of the closed corporation. Their lawyer, Marlon Stuart, said a handwriting expert who examined a document stating they had resigned from the company found it to have been forged.

The DA's Dianne Kohler Barnard, who called for the shutdown of this front company when it first became public, said the slush fund "was basically an ATM for certain members of crime intelligence".

govenderp@sundaytimes.co.za