There's something fishy about this abalone deal
Fisheries finance boss among four officials who could face charges over the appointment of controversial fish-processing company Willjaro
The Fisheries Department’s finance chief and three other officials could face criminal charges of fraud and corruption after a forensic investigation into a R45-million contract.
The investigation was commissioned last year by Agriculture, Forestry and Fisheries Minister Senzeni Zokwana after red flags were raised about the appointment of fish-processing company Willjaro to sell 90 tons of abalone, confiscated from poachers, to buyers in China.
The report of the investigation, seen by Times Select, also makes critical findings about Willjaro. The company — whose contract was subsequently suspended following lengthy court action — responded by accusing the investigative outfit which compiled the report, The iFirm, of conducting a smear campaign.
The report was submitted on May 31 last year, and Zokwana said based on its recommendations he had appointed lawyers to draft charges against implicated officials.In an e-mailed response, his office said: “The minister is engaging with the security cluster in order to formulate a comprehensive and decisive response to mitigate corrupt and illicit activity.”
In a further twist, Zokwana is the target of a damning report compiled by the National Health Education and Allied Workers Union, which represents many disgruntled Daff staff.
In a report submitted to the Presidency, the union slammed the iFirm report as “propaganda” and made allegations of nepotism and mismanagement within Daff.
The union wants Zokwana’s “immediate removal”.
Zokwana’s office hit back at Nehawu and said a ministerial task team had been set up to address its concerns.
The iFirm, owned by retired Gauteng police commissioner Mzwandile Petros and retired Mpumalanga police commissioner Thulani Ntobela, said in its investigative report that Daff’s chief financial officer, Jacob Hlatshwayo, was the “main player” in a scheme that sought to ensure Willjaro was chosen to process the abalone in December 2016.
The contract would originally have been worth R1-million to the company.Hlatshwayo and three other officials are alleged to have faked an “emergency” by claiming 90 tons of abalone were going to rot due to a broken freezer — a claim the report found was false — and that the Cape Town store was “in danger of being attacked if the abalone is not sold”.
The report claims this was done in order to skip the normal tender process and instead go into a “three-quotation system” to quickly find a supplier to sell the abalone to buyers in the Far East.
Daff’s chief director for finance, Zoliswa Lufele, supported Hlatshwayo’s claims of an emergency. E-mails attached to the report show she called for Willjaro’s contract to be increased to R5-million because of the situation.
The original contract said the fish-processing company would get 30% of the total sale value of the abalone, which was fixed at $45/kg, while the Marine Living Resources Fund would get 70%.
Court documents show that an erratum later pushed the sale price up to $130/kg. This means Willjaro would have made as much as R45-million off the 90 tons of abalone based on exchange rates over the three months in which it would have been marketed, processed and sold.
A Daff supply chain management employee told iFirm investigators Willjaro was unknown to the department until December 6 2016 when Abigail Booth, the acting director of supply chain management at the time, gave an instruction for the company’s name to be added to the supplier database.The report found Willjaro “did not meet the criteria of being invited to quote as they did not possess any licence for fish processing”.
But on December 9, Willjaro acquired a licence by buying shares in processing company Fishimpex, and on December 15 it was awarded the contract ahead of two processors who were already service providers for the department.
Documents show that at the time of Willjaro’s appointment, there was no authorisation to deviate from normal tender procedures.
Noloyiso Pinda, who was in charge of helping to appoint a company for the contract, is purported to have told The iFirm in an interview that she received an approved “submission for deviation” only on January 20 2017.
The report said Booth and Lufele backdated their signatures on the submission to December 1 and December 5 respectively.Pinda was also alleged in the report to have had a “corrupt relationship” with Willjarro chief executive Gershom Ramazan, forwarding him internal e-mail correspondence about the contract.
Hlatshwayo, Pinda, Booth and Lufele refused to comment, referring questions to Daff director-general Mike Mlengana.
Mlengana said the department planned to appoint a “very strong objective auditing firm” to conduct a “broad, detailed” investigation into numerous allegations against officials.
Ramazan denied any wrongdoing relating to the contract.The iFirm report recommended that Hlatshwayo and Lufele be charged with financial misconduct under the Public Finance Management Act of 1999.
It also recommended that Hlatshwayo be charged with misconduct for inciting and victimising junior employees to go along with the plan. It said Booth and Lufele should be charged with fraud for backdating the documents.
Zokwana suspended Mlengana in July 2017‚ pending investigations into allegations of gross misconduct.
“The DG faces charges of alleged gross misconduct relating to misappropriation of state funds and failure to comply with the Public Finance Management Act and failing to disclose his business partner’s alleged involvement in certain department tenders,” Zokwana’s office said at the time.
“Mr Mlengana also faces charges of alleged insubordination in relation to failing to suspend department officials involved in fraudulent activities; and the contravention of the Marine Living Resources Act.”
Mlengana returned to work in April this year after the Pretoria High Court found his suspension was unlawful.
Western Cape Hawks spokesperson Captain Philani Nkwalase confirmed that an investigation relating to various allegations of fraud and corruption was underway.
“It is premature to provide any further details. When investigations are finalised a media statement will be released,” said Nkwalase.