Social Development fund meant for women empowerment bought luxury cars, properties and Rolex watch

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Former Chief Director at the Eastern Cape Department of Social Development (ECDSD) Advocate Vuyokazi Sangoni and accomplice businessman Poovandaren Chetty are set to make another court appearance at King William’s Town Magistrate’s Court on Wednesday.

The pair is facing charges of money amounting to R29 million fraud, theft and money laundering.

They were arrested in August 2020 together with Stanley Khanyile, the former municipal manager of Sedibeng District Municipality and former Head of Department (HOD) for the ECDSD.

But Khanyile was later on shot dead on 3 October 2020 in Alberton, Gauteng.

NPA Spokesperson in the Eastern Cape Anelisa Ngcakani said that Sangoni is charged with fraud while Chetty faces 16 counts of fraud, 18 counts of theft, and 15 counts of money laundering.

Chetty was a Director for Umnotho Development.

Fraud and money laundering

In 2015, the ECDSD was to establish a Provincial Women’s Development Resource Centre in Lusikisiki. The centre was intended to serve as a hub for socio-economic empowerment for women with a focus on skills development programs. It was also intended to be a provincial hub for marketing the products produced by women co-operatives or groups which were funded by the department.

The department then identified an existing government infrastructure in Lusikisiki as a suitable place to house the centre. It was against this background that Khanyile, in his capacity as the HOD, in 2015 allegedly flouted procurement prescripts and processes to ensure that Chetty was awarded the R14.4 million contract for establishing the centre. Khanyile allegedly bypassed procurement processes and on 15 July 2015, together with Chetty, signed a Service Level Agreement (SLA).

The agreement was deemed to have commenced on 01 April 2015 and was to endure for a period of 9 months until 31 December 2015. It is alleged that before the contract was signed, Chetty did not present a business plan to the ECDSD on behalf of Umnotho, which is a requirement for funding in terms of the department’s policy.

Between July and August 2015, the ECDSD paid just over R14 million to Umnotho. Chetty was the only designated signatory to the bank account.

For the 2016/2017 financial year, a tender was advertised by the ECDSD for the training and capacitation of co-operatives. Khanyile and Sangoni, are accused of colluding to ensure that Umnotho won the tender through unfair advantage in the procurement process. They allegedly flouted the prescripts of the procurement policy and did not follow normal departmental procedures.

Umnotho was duly awarded the tender and on 3 May 2016 Khanyile and Chetty allegedly signed an SLA. The second agreement was deemed to have commenced on 03 May 2016 and was to endure until 31 March 2017. The ECDSD paid just over the R15 million to Umnotho.

It is alleged that Sangoni, in her capacity as a Chief Director in the office of the HOD, colluded with Khanyile to flout the procurement processes in order to ensure that Umnotho succeeded.

Chetty allegedly used approximately R14 million from the Umnotho account for his personal benefit in that during August and September 2015 he allegedly bought a Rolex watch, a diamond ring, Porsche and Ferrari motor vehicles and gold coins valued at just over R1 million.

During November 2020 the Grahamstown High Court granted the Asset Forfeiture Unit (AFU) of the NPA a final forfeiture order of about R19 million against assets which were allegedly proceeds of tender fraud.

The court order permanently forfeited to the state the following property:

• R12 177 771.26 credit balance contained in bank account in the name of Umnotho Training and Development Trust.

• A Porsche 911

• R101 000 equity in the Land Rover Discovery

• 52 Gold Kruger Rand Coins;

• Erf No 51 Wedgewood Old Cape Road, Port Elizabeth;

• Renovations for R1 045 649.60 value in property at 40 Swapo Road, Durban North, KwaZulu Natal;

• R2 000 000 and its interest and/or capital increase and dividends transferred from Umnotho Training and Development bank account, and invested Allan Gray Investment account.

• R500 000 and its interest and/or capital increase and dividends transferred from Umnotho Training and Development bank account, invested in Bitcoin invested at Luno Bitcoin company.