Jailing of ex-treasury chief ‘is evidence that KZN is making strides in its fight against corruption’

15 Sep 2022

The former head of KwaZulu-Natal’s treasury, Dumisani Sipho Derrick Shabalala, has begun a 15-year jail term. His bid for freedom went up in flames after the Pietermaritzburg High Court dismissed his application for leave to appeal against his sentence and conviction.

Shabalala’s appeal was dismissed on Tuesday, resulting in him forfeiting his bail and immediately being sent to jail. Last Thursday, he was handed 15 years’ imprisonment for his role for receiving R1.5-million from Intaka Investments for the acquisition of Wataka water purification plants valued at R44-million.

This followed his conviction for fraud, corruption, money laundering and contravention of the Public Finance Management Act. The corruption occurred between 2004 and 2007 when Shabalala formed a relationship with Uruguayan businessman Gaston Savoi and the company Intaka Investments.

Read more in Daily Maverick: “‘Amigo case’: Testimony of how a R144m tender was irregularly awarded to Gaston Savoi”

The National Prosecuting Authority’s KwaZulu-Natal spokesperson, Natasha Ramkissoon-Kara, confirmed that the refusal of his application for leave to appeal resulted in Shabalala forfeiting bail and starting his sentence immediately.

The Director of Public Prosecutions in KZN, Elaine Zungu, said the court’s decision is evidence “that KZN is making strides in our fight against corruption”.

“We will continue with our mandate of rooting out corruption, especially in the government sector. We commend the stellar work done by the prosecution team and the investigation team from the Hawks,” Zungu said.

Troubles not over

However, this is not the end of the road for Shabalala. He is also implicated in a related matter involving Savoi which became known as the Amigos Case and which involved the manipulation of tender contracts. Savoi is Intaka Holdings director and his company and Intaka industrial director Fernando Praderi are also co-accused.

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PricewaterhouseCoopers forensic auditor Trevor White previously testified in the Zondo Commission of Inquiry into State Capture that the businessman was introduced into KZN government circles by then head of the provincial treasury Shabalala, who was his initial accomplice in another collusion scheme.

The first arrests in the Savoi case – of 21 suspects charged with racketeering, corruption and fraud – were made in 2010 and 12 years later the matter is still dragging before the courts.

The charges in the Savoi matter relate to racketeering, fraud, corruption, money laundering and infringement of the Public Finance Management Act. It is the NPA’s contention that Savoi and others participated in a criminal enterprise involving the supply of water purification plants and oxygen self-generating units in the KZN and Northern Cape health departments and provincial hospitals.

The NPA further alleges the accused conspired in different ways with highly placed officials within the provincial administration to secure contracts by unlawful means for the provision of water purification and oxygen plants.

Former ANC Northern Cape chairperson John Block, who is also implicated in the Savoi case, is serving 15 years in jail. He was found guilty in another matter on charges of fraud, corruption and money laundering by the Northern Cape High Court in 2015, and sentenced in December 2016.

The Savoi matter has been remanded until 14 November 2022 when an application for a permanent stay of prosecution will be heard. DM

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Troubles not over