Two people under the employ of Setheo Engineering were arrested and will appear in the Johannesburg Commercial Crimes Court today and charged for fraud.
Setheo Engineering is a company that was awarded a contract by City Power in 2015 for the construction of a new substation in Eldorado Park, worth R126 million. It was the same company that colluded with the two City Power officials, who were in June suspended, for a forward payment of almost R66 million, without evidence of any physical work done at the substation.
The case was brought to my attention earlier this year, when employees of sub-contractors connected to the construction project protested against City Power’s main contractor, Setheo, and threatened to burn the substation down. Community leaders of Eldorado Park and surrounds prevented the attempted destruction of the substation, which is used to supply electricity to Eldorado Park and surrounding areas.
The latest arrests follow my oversight visit with all stakeholders, including representatives from Setheo Engineering, to the substation in late June.
During this visit, I instructed City Power Officials to request Absa Bank to verify the authenticity of the bank guarantee Setheo Engineering had submitted to Council, which totaled just over R14 million.
An investigation by Absa then revealed that the bank guarantee was indeed fraudulent. It further revealed, amongst other things, that Setheo Engineering holds no accounts with Absa; that the account number mentioned in the guarantee does not exist and that the Absa logo was copied and pasted from an unknown source.
Used to thriving under previous administrations who inculcated a culture of corruption and deceit, Setheo Engineering has invested more into taking me to court for speaking out against their corrupt dealings, than actually completing the work they were intended to do. Their case was thrown out.
Setheo Engineering is yet another example of the previous administration’s failure to observe proper financial management in the City.
Of course, adhering to proper financial practices was not high on the ANC’s agenda as they were too preoccupied with looting state resources instead of providing services for our residents.
These findings have given us, through the City’s Anti-Corruption Unit led by General Shadrack Sibiya, fresh zeal to pursue investigations into corrupt companies who collude with selfish and fraudulent City officials to rob our residents of the money intended to ensure they have access to quality services.
We will continue working together with all institutions within the criminal justice system, such as the Hawks and SAPS, to ensure that corrupt individuals and companies have nowhere to hide in the City.
I remain committed to ensuring that legal action is taken against the contractor for the recovery of monies owed to the residents of this city.
I would also like to encourage people to report any fraudulent and corrupt activities through our 24-hour tip-off hotline 0800 002 587, or visit the City’s Group Forensic and Investigation Services (GFIS) department offices situated at 48 Ameshoff Street in Braamfontein.