Four people linked to the Bosasa saga — including whistleblower and the firm’s former chief operating officer Angelo Agrizzi — have been charged with corruption.
In 2007, the Special Investigating Unit (SIU) began investigating Bosasa after a series of lucrative tenders were awarded to the company by the department of correctional services.
The recent arrests by the Hawks is the first action taken by the authorities since the completion of the report in 2009, nearly a decade ago.
The SIU recommended that the department take action against its former prisons commissioner Linda Mti and its former chief financial officer Patrick Gillingham.
The SIU also recommended that the National Prosecuting Authority (NPA) consider prosecuting the pair for their part in four tenders awarded to Bosasa.
Agrizzi, former Bosasa chief financial officer Andries van Tonder and Gillingham were all arrested on Wednesday. Mti appears on the draft charge sheet, but has not yet been arrested.
The SIU report said: “On the evidence before it, the SIU is accordingly satisfied that the improper and corrupt relationship between Gillingham, [correctional services] commissioner [Linda] Mti and the Bosasa group of companies has seriously undermined the procurement process and exposed the DCS [department of correctional services] to civil suits by competitors who were unfairly treated.”
Bosasa chief executive Gavin Watson was not among those arrested and charged on Wednesday.
Agrizzi recently told the commission of inquiry into state capture that during a holiday in Paris, around the time the SIU report was handed to the NPA, Watson boasted that he was not implicated in the report.
Contravention of the PFMA
A draft charge sheet reveals that Mti has been accused of contravening the Public Finance Management Act (PFMA) and also faces one count of corruption.
According to the draft charge sheet, Mti has been charged with failing to ensure that the procurement processes of the department of correctional services had been properly followed in respect of tenders awarded to Bosasa — a criminal offence under the PFMA.
Bosasa has held multimillion-rand tenders with the department of correctional services since 2004. The controversial firm has amassed billions through its contracts with the department over the last 15 years.
During the course of his testimony before the Zondo commission, former Bosasa chief operating officer Agrizzi confirmed these tenders were retained through Bosasa’s relationship with Mti and Gillingham.
Mti was the accounting officer during the time these tenders were awarded. He has been accused of contravening the PFMA in relation to four tenders.
His charges relate to a 2004 catering tender, reportedly worth R718-million, and the “irregular” extension of the tender. The extension allegedly increased the value of the original tender by R82-million.
The charges against Mti also relate to an access control tender awarded to Bosasa-owned Sondolo IT in 2005. The tender was reportedly valued at R237-million.
Mti also faces charges relating to the R487-million fencing tender awarded to Bosasa-linked Phezulu Fencing. During his testimony before the Zondo commission, Agrizzi claimed that the contract was the biggest in Africa.
The value of the contract exceeded the department’s initial budget by over R140-million, the draft charge sheet says.
A R224-million tender for a television system also forms part of the charges against Mti, who allegedly failed to ensure that the tender bidding process was fair.
According to the draft charge sheet, no bid specifications committee existed in respect of these tenders. Bosasa employees, including Agrizzi and former Bosasa consultant Daniel Mansell designed the bid specifications, the draft charge sheet says.
Mti’s corruption charge relates to allegations that he received favours from Bosasa in exchange for his co-operation in ensuring the firm’s monopoly over department of correctional services tenders.
These alleged favours include free flights, hotel stays and rental cars for him and members of his family.
Gillingham also faces a corruption charge for allegedly receiving favours. During his Zondo commission testimony, Agrizzi confirmed that he had personally paid Gillingham bribes.
The SIU had previously said Gillingham was paid “at least” R2.1-million in bribes, including cars for him and his children.
Agrizzi told the Zondo commission that in 2004 Watson tasked Frans Vorster with purchasing a new Mercedes-Benz E-class for Gillingham. The purchase came soon after Bosasa was awarded the 2004 catering tender from the department of correctional services.
Vorster, Bosasa’s former fleet manager and buyer, confirmed this. During his testimony before the commission, Vorster alleged that four more cars were bought by Bosasa for Gillingham and members of his family.
According to Vorster, in 2005 he facilitated the purchase of a VW Golf for Gillingham’s wife, then in 2006 a VW Polo was bought for Gillingham’s son. Bosasa also allegedly procured a VW Polo for his daughter in 2006, but Vorster said he was on leave when this was done. Van Tonder detailed the purchase of this car. Van Tonder detailed a complex trail of money transfers meant to conceal the true identity of the entity which had purchased the car for Gillingham’s daughter.
Vorster told the commission that in 2007, Gillingham senior was in need of an upgrade. A Mercedes-Benz E320 was subsequently ordered, Vorster said.
According to the draft charge sheet Agrizzi and Van Tonder’s corruption charges relate to the payment of bribes and favours to Mti and Gillingham.
Both Agrizzi and Van Tonder gave evidence before the Zondo commission of inquiry into state capture, incriminating themselves in allegations of rampant corruption and money laundering at the company.
Gillingham, Agrizzi and Van Tonder have also been charged with five counts of money laundering. All five charges relate to favours paid to Gillingham by Bosasa, including the VW Golf, Gillingham’s two Mercedes-Benz’s, the VW Polo and a R62 796 European trip for Gillingham and his wife.
According to the charge sheet, the money that paid for these favours was transferred between accounts to conceal their true source.