IN THE KWAZULU NATAL HIGH COURT, PIETERMARITZBURG (REPUBLIC OF SOUTH AFRICA) In the matter between:- CASE NO: CC160/2009 THE STATE and ZAKHELE INNOCENT JABULANI MABASO Accused 1 INDIZA INFRASTRUCTURE SOLUTIONS (PTY) LTD Accused 2 (As represented by Zakhele Innocent Jabulani Mabaso) STATEMENT IN TERMS OF THE PROVISIONS OF SECTION 115 OF THE CRIMINAL PROCEDURE ACT, 1977 (ACT 51 OF 1977) ON BEHALF OF ACCUSED NUMBERS 1 AND 2 1. Accused no. 1 is a businessman and director of companies. He is charged, both in his personal capacity as well as in his representative capacity, on behalf of accused no. 2. 2. Accused no. 1 was, at all times relevant to the charges, the managing director of accused no. 2, Indiza Infrastructure Solutions (Pty) Ltd ( Indiza ). Accused no. 1 is duly authorised to represent accused no. 2 in these proceedings. 3. Accused nos. 1 and 2 plead not guilty to all the charges set forth in the indictment in this matter.
AD THE BACKGROUND FACTS ALLEGED IN THE INDICTMENT 4. It is common cause that the Department of Education for the Province of KwaZulu Natal ( DoE) embarked on a process involving the procurement of books and stationery during 2005. It is admitted that the programme was referred to as the Learner Teacher Support Material programme ( LTSM programme ). This was indeed the avowed objective of the LTSM programme. 5. The accused has no knowledge of the intention of the DoE in regard to the appointment of a single service provider to manage the procurement of textbooks and stationary, as alleged in paragraph 7 of the summary of substantial facts. The fact is that as at 11 April 2005, when the tenders in relation to the LTSM programme were advertised, separate tenders were addressed to interested parties as to the provisions of an Integrated Management System in relation to the provision of textbooks, on the one hand, and the provision of stationary, on the other, being tender number ZNT 1373 E (whereas the tender relating to textbooks was tender number ZNT 1372E.) 6. The tenders were administered by a tender evaluation committee ( TEC ) and their evaluation was assessed by a tender award committee ( TAC ). Both committees were comprised of officials of the Department of Education and the Department of Treasury. 7. On 4 May 2005, the TAC awarded tender number ZNT 1373E, in relation to stationary alone, to Indiza-Motswedi, and awarded tender number ZNT 1372 E to Edusolutions, a company unconnected to accused nos. 1 and 2. 8. On 9 May 2005, one of the unsuccessful tenderers, Kwande Consulting (Pty) Ltd, noted an appeal against the award of the tender to accused no. 2. The implementation of both tenders was suspended pending the determination of the appeal. Page 2
9. The DoE, represented by the chairperson of the TAC, Ms L. M. Ntuli (witness number 2 on the State s list of witnesses) invited accused no. 2 to participate in the provision of consultancy services and the procuring of stationary to schools referred to by the DoE as section 20 schools in terms of its LTSM programme pertaining to stationary pending the finalisation of the appeal. The reference to section 20 is a reference to the same section of the South African Schools Act, 1996 (Act 84 of 1996). The invitation as aforesaid did not extend to Motswedi Outsourcing (Pty) Ltd. Edusolutions was similarly invited to participate in regard to the provision of consultancy services and the provision of textbooks to the same schools. 10. Accused no. 2, duly represented by accused no. 1, thereupon engaged in negotiations with the DoE which resulted firstly in the provision of certain services in connection with the Integrated Management System pertaining to the provision of stationary and, thereafter, in the conclusion of a written agreement styled the Service Level Agreement ( SLA ) on 29 June 2005. 11. The services provided in terms of the oral agreement referred to in paragraph 10 resulted in charges by Indiza upon the DoE in the amount of R 19, 896, 489.76 which amount became due and payable at the time the SLA was entered into the payment whereof was provided for in clause 7.1 of the SLA. 12. At the time of its implementation the SLA was both void for vagueness and illegal for wan of compliance with section 3, 5 and 29(1) of the KwaZulu Natal Procurement Act, 2001 (Act 3 of 2001) read with the relevant supply chain management policies and delegations. Both the oral agreement referred to in paragraph 10 above as well as the SLA was illegal. The agreement referred to in paragraph 10 above was illegal on account of the fact that the persons who purported to conclude it had not authority to do so and the terms pursuant whereto it was concluded were likely to lead to fruitless or vain expenditure, within the Page 3
meaning of section 1 of the Public Finance Management Act, 1999 (Act 1 of 1999) ( PFMA ). The SLA was void for vagueness in that it is not possible to discern from its provisions how the amount payable by way of consultancy fees or the amount for the provision of stationary were to be calculated.. The invalidity, alternatively the unenforceability of the aforesaid agreements was not known by the accused at the time. 12.1. The accused s understanding of the scope, meaning and purport of the SLA was that he was entitled to a profit in regard to the provision of stationary to schools and that he was under no duty to disclose what profit that was. Edusolutions, who similarly entered into a SLA with the DoE was permitted a profit on all its services rendered to the DoE. 13. The SLA was entered into on a fundamentally different basis to the terms regulating the tender as referred to herein above. Examples of differences between the agreement envisaged by the terms of the tender and the salient features of the SLA include: 13.1. the scope of the services to be provided; and 13.2. the amount to which Indiza became entitled to; and 13.3. the terms of payment; and 13.4. the term for which the SLA would endure relative to the term as envisaged in terms of the tender in relation to the same subject matter. 14. On 1 September 2005, accused no. 3 was appointed the acting Chief Financial Officer of the DoE. She was a member of the TAC but was attached to the Department of Treasury before her appointment as acting CFO of the DoE. Accused no. 1 had no association with accused no. 3 and denies any corrupt relationship with her of whatsoever description. Accused no. 1, furthermore, denies that accused no. 3 in fact entertained any bias in favour of accused no. 2 Page 4
and that she in any way acted improperly towards accused no. 2 or that her conduct in relation to accused no. 2 was in any way actuated by a corrupt purpose or motive. 15. The invoices so submitted were scrutinised by officials of the DoE and paid by the Department of Treasury on the basis of authorisations to pay the amounts reflected in the invoice concerned by the DoE. 16. Accused number 1 bore no knowledge of the submission of false invoices as alleged by the State, did not consent to and did not authorised the submission of such invoices and could not have prevented their submission by the exercise of reasonable care, in the event of it being established that any such invoice was false in any material particular. 17. In the premises: 17.1. Accused numbers 1 and 2 deny all the elements of fraud as per counts 1, 12, 15 and 18. 18. Accused nos. 1 and 2 accordingly denies all the elements of the crime of fraud as alleged in the indictment. 19. With regard to counts 2 to 11; 13 to 14 and 16 to 17Accused nos. 1 and 2 deny that any of the documents alleged was forged or uttered, alternatively, in the event of it being established that such was the case, which is denied, they deny that such forgery and uttering occurred with their knowledge or consent or upon the authority of accused number 1. THUS DONE AND SIGNED AT PIETERMARITZBURG ON THIS THE 30 TH JANUARY 2013. DAY OF Page 5
ZAKHELE INNOCENT JABULANI MABASO ACCUSED NO 1 INDIZA INFRASTRUCTURE SOLUTIONS (duly represented by ZAKHELE INNOCENT JABULANI MABASO) ACCUSED NO 2 Page 6