Whistle-blower illuminates its rival’s dark secret
Winner of a lighting tender loses Cape Town Civic Centre lighting contract for failing to disclose its fraudulent past
A firm hired to install energy-efficient lighting at Cape Town’s council HQ kept city officials in the dark about its criminal past.
Namasthethu Electrical snagged a R33m tender by concealing a fraud conviction and giving a fictitious Cape Town address.
The company’s former directors, husband and wife Ravan and Shamla Chetty, had their home in Umhlanga and other properties, cars and cash seized by the Asset Forfeiture Unit pending a probe into allegations of corruption which ended with a criminal conviction for Ravan in 2013.
An unsuccessful bidder for the 18-month Cape Town Civic Centre contract, signed in November 2014, lodged an appeal which illuminated the conviction.
The high court in Cape Town terminated the contract last month, but not before the KwaZulu-Natal company pocketed R24m.
The Chettys, whose company traded as Nationwide Electrical in 2013, were charged with defrauding the Construction Industry Development Board to land contracts worth more than R12m in KZN and the Eastern Cape.
Ravan, a former lecturer, admitted bribing a board official to give his company a higher grading in order to gain profitable contracts. This entailed falsifying financial statements and claiming two staff were qualified and registered engineers and permanently employed.
Ravan and the company were fined R400,000, half of which was suspended. He was also handed a suspended five-year prison sentence.
Terminating the lighting contract in March 2016, Cape Town said Shamla committed fraud by not disclosing this information to the city and by submitting the fraudulently obtained CIDB certificate. She also gave a false Cape Town address when in fact the company operated from three containers at the Civic Centre.
Namasthethu denied that the company and Shamla had been convicted of fraud, and challenged Cape Town’s cancellation of the contract. But Judge Nolwazi Boqwana was not convinced, and ordered the company pay the council’s legal costs.
Nazeem Price, CEO of Citrine Construction – the unsuccessful bidder that blew the whistle on Namasthetu – said his company has been vindicated by the judgment. “But the horse has bolted, and we hope the city can learn from this. There isn’t much we can do, but we will continue to do our best as a company and do the right thing for the industry.”
Namasthethu’s lawyer, Khulekani Makhanya, said the company would appeal. “The city is withholding payment, arguing that our client failed to disclose [the conviction] and therefore the contract is void. We are maintaining that there is no conviction,” he said.
Council spokesperson Luthando Tyhalibongo said the alleged fraud had been reported to the police. “Because the tender award to Namasthethu was voided, the city will consider an enrichment claim for money paid to Namasthethu without a valid legal cause,” said Tyhalibongo.
“The city will also continue with procedures to ensure that Namasthethu does not obtain tender work in the future.”