R38m state vehicle scam exposed

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Johannesburg - State vehicles are stolen by government officials and stripped for cash, while some are rented out to individuals, in an elaborate scam that has netted up to R38 million. This emerged during in-camera hearings held by the standing committee on public accounts (Scopa) in the Gauteng Legislature on Thursday. The Gauteng Department of Roads and Transport briefed Scopa on the extent of the racket, which also includes the abuse of government petrol cards. Gauteng Roads and Transport MEC Ismail Vadi confirmed that the department had investigated three cases of corruption at G-Fleet, a Gauteng government owned entity which manages over 7000 vehicles on behalf of various national and provincial departments, as well as state entities. This involved fraudulent use of fuel cards, theft of motor vehicles and irregular hiring of vehicles to private individuals in the Eastern Cape and KwaZulu-Natal.

Officials who operated a privately-owned garage using state cars for personal gain had also been nabbed.

“Departmental investigations are concluded and were reported to the South African Police Service for criminal prosecution,” Vadi said.

Scopa heard how rogue officials netted up to R38 million through abuse of state cars.

Vadi said disciplinary charges were instituted against a G-Fleet manager responsible for Eastern Cape and KwaZulu-Natal offices. The manager resigned last year.

“The case has been registered with the Hawks in KwaZulu-Natal and a specialist prosecutor from the Commercial Crimes Court has been assigned to the case. The assets forfeiture unit in KwaZulu-Natal has also been engaged in the case,” he said.

Two more officials will also be charged internally, while 10 employees linked to a privately-owned garage were arrested and charged.

Chairperson of Scopa Mbongeni Radebe expressed shock at revelations and raised concerns over the lack of proper systems which should have prevented corrupt activities.

The committee wanted the department to come down hard on those implicated and to call in the assets forfeiture unit to determine whether the assets of those involved can be attached to recoup stolen state money.

“We are urging the officials to act decisively against those implicated in corruption and to recoup the money by involving the asset forfeiture unit,” he said.

Radebe and his committee have given Vadi’s department just 10 days to respond to some of the questions and concerns raised by the committee and to submit a detailed plan of how the department will prevent corrupt activities from happening in future.

“They have to come up with a detailed plan on how they are going to stop this corruption,” he said.

The committee also pointed to a lack of internal controls by the management of G-Fleet, saying the company failed to apply checks and balances as required by regulations and policy.

Vadi said steps had been taken to prevent this occurring in future.

“Preventative measures have been instituted by the senior management at G-Fleet and further investigations led by the department are continuing.”

The department launched an anti-fraud and corruption campaign targeting departmental procurement and tender processes, applications for driver’s licences and taxi operating licences.

Last week, G-Fleet complained to the Gauteng Legislature’s portfolio committee on roads and transport that it was owed R370 million by 90 national and provincial departments and would suspend petrol cards unless government paid up.

CEO Noxolo Maninjwa told the committee letters of demand had been sent to departments and government entities that owe them money.

The worst offenders, Maninjwa said, were:

* Gauteng Department of Health, which owes R109 million;

* Office of the Chief Justice and the Department of Home Affairs were R70 million in the red;

* National Prosecuting Authority owes R11 million;

* Gauteng Department of Infra-structure and Development owes R12 million.

“We’ve been in constant discussion with the service provider managing the fuel cards for us and said if a [client] has not paid us for more than 60 days - which is beyond the 30-day period - [can’t we] begin to terminate or suspend the services we are providing?” said Maninjwa.

The Legislature Monitor