Court hears that ‘Radical Economic Transformation’ is central to Zandile Gumede graft case

Former eThekwii mayor Zandile Gumede is all smiles as she leaves Durban High court on Monday where she faced her corruption charge from DSW department.Photo:Mandla Langa

By Des Erasmus

6 Mar 2023

The National Prosecuting Authority’s case against former eThekwini mayor Zandile Gumede and her co-accused, in a R320-million cash extraction scheme from the city’s solid waste department (DSW) will show that the desired outcome was the self-enrichment of ANC leaders and councillors in KwaZulu-Natal, as well as party allies such as mafia-styled business forums, under the banner of Radical Economic Transformation.

Former Durban mayor Zandile Gumede was the “principal controller of the enterprise”, public prosecutor Hazel Siramen told the Durban High Court on Monday, and her methods would become clear as the trial played out.

The state’s evidence includes reams of documents including bank statements, vehicle tracking data, browser histories, emails, cell phone records and invoices. There is also a list of over 112 witnesses that prosecutors can call from.

The much-awaited trial finally started with Siramen providing the opening statement for the prosecution – which took four hours.

Gumede was first charged in August 2019, along with several of her co-accused.

Former eThekwini mayor Zandile Gumede arrived at the Durban High Court on Monday morning, 6 March 2023, where she is facing charges of corruption and racketeering relating to the DSW tender. Photo: Mandla Langa

Joining Gumede in the dock was former ANC executive city councillor Mondli Mthembu (accused #2); former city manager Sipho Nzuza (accused #3); Robert Abbu (accused #4), who at the time of the alleged crimes was Durban Solid Waste’s deputy head for strategic and new developments, and Sandile Ngcobo (accused #5), who was deputy head of supply chain management at the municipality.

These five accused, said Siramen, sat at the top of the enterprise organogram, with the remaining 11 people and six companies on trial alongside them, taking instruction from the quintet.

Siramen said the quintet deliberately subverted all control mechanisms at the municipality to facilitate the criminal enterprise.

According to the state’s hefty indictment, Gumede received R2,881,350 in kickbacks between January 2017 and July 2019 for ensuring predetermined businesses benefited from the waste contracts.

Read more in Daily Maverick: Inside the 2,786-count fraud and corruption indictment against former eThekwini mayor Zandile Gumede and her co-accused

Gumede, who is currently an ANC backbencher in the KwaZulu-Natal legislature and de facto leader of the ANC in eThekwini, is alleged to have received direct electronic payments to her bank account and the bank account of her daughter.

The ANC eThekwini region is alleged to have received a donation of R100,000 from three of Gumede’s co-accused.

Read more in Daily Maverick: ANC set to kiss goodbye to Durban after Zandile Gumede win

Siramen said: “[Gumede] along with [Mthembu] determined the objectives, the structure, the operational dynamics and the beneficiaries of the actions of the enterprise.

“Accused one, in concert with accused two, three, four and five, used her office to capture and co-opt roleplayers in the political structures of eThekwini, including the councillors, the administration, the supply chain management as well as the financial components of the city and to use these to circumvent the outcome of the SCM processes.”

Siramen said Mthembu followed Gumede’s instructions and was the “executive manager of the enterprise”.

Siramen said then municipal manager, Sipho Nzuzua, had “contravened the statutory provisions, regulations, policies and prescripts that govern the functions and duties of accounting officers of municipalities so that he could align his actions to the objectives” of Gumede and Mthembu.

“He used the authority of the office of the accounting officer, acting in concert with [Abbu] and [Ngcobo], to authorise, to approve and to force the approval and authorisation of the administrative, financial and supply chain management functions with respect to the DSW tender in alignment with the objectives of Gumede and Mthembu.”

Siramen said Abbu and Ngcobo were actively involved in facilitating the awarding of DSW tenders to selected service providers and they were purposely placed in positions of authority to circumvent oversight.

She said DSW employees known as Area Cleansing Managers would testify that the newly appointed service providers would inform them that they had been appointed, with no formal notification coming from upper management. The contracts awarded to the service providers were deliberately inflated, according to the state.

Other extraction schemes used by the enterprise included issuing fraudulent weighbridge invoices to claim for fictitious loads taken to the landfill site.

Several councillors would also testify in favour of the state, said Siramen.

Former eThekwini mayor Zandile Gumede was all smiles as she left Durban High Court on Monday 6 March 2023. Photo: Mandla Langa

“Various councillors who were inaugurated at the same time as [Gumede], whose identities have been withheld for security reasons, will present evidence that [Gumede] and [Mthembu] addressed and informed them that the DSW tender was to be renewed, which would benefit the councillors.

“[Gumede said] that the time for radical economic transformation, now referred to as RET, had arrived and that [Mthembu] would elaborate on how the RET programme would be implemented in eThekwini.”

Siramen then outlined a series of meetings that took place between Gumede, Mthembu and the ANC councillors in the city between September and December 2017.

She said the councillors were informed that a DSW contract was to be awarded to four companies and that each councillor had to source four or five community-based contractors (CBCs) to subcontract to one of the four main contractors.

“The councillors will further testify that each ward councillor was to appoint between four to five CBCs, of which one could be used as a vehicle through which the respective ward councillors could benefit from the payments.”

The councillors were allegedly told that the benefitting CBCs had to be ANC-affiliated structures such as the MKMVA and business forums like Amadelangokubona – known for threatening construction businesses with violence if not given a cut of contracts.

“Furthermore, the criteria that the councillors should use to appoint CBCs, was that the members or directors had to be members of the ANC and had to be aligned to a certain faction of the ANC.

“The councillors of other political parties were excluded from participating in this RET programme that accused one and two created in relation to the DSW contract,” said Siramen.

An amount of R45-million had originally been budgeted for the DSW contract, which was to run over three months. The contract was for various waste collection activities, including the collection of waste from illegal dumpsites as well as residential waste collection.

But the contract kept on being extended illegally, with its value eventually ballooning to R320,995,973.

Together, the accused face 2,793 different counts on charges that include racketeering, fraud, fraud by omission, corruption, contravention of the Municipal Finance Management Act, contravention of the Prevention and Combating of Corrupt Activities Act, contravention of the Organised Crime Act and contravention of the Local Government Municipal Systems Act.

The trial continues on Tuesday. DM

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