Gauteng Premier David Makhura has set up an independent forensic investigation into allegations of a multi-million rand money laundering scheme involving officials of the Department of Social Development and several NGOs.
This comes after a whopping R5 million ‘disappeared’ in the botched conduit transaction.
The Gauteng provincial government had admitted to bypassing its own financial controls by using the NGOs as a “conduit” to transfer about R42-million to third parties that rendered services in the province.
It was during the conduit transaction process that the R5million went missing.
The Gauteng department of social development (GDSD) and an East Rand-based NGO – A Re Ageng – have since engaged in a court battle over the botched conduit transaction.
It all began after a huge sum of money was transferred from the department to one A Re A geng. The Citizen reported that A Re Ageng director Mpuleng Lenyehelo was uncomfortable when an amount of over R10 million was transferred into the NGO’s Absa Bank account with an untraceable account and reference number.
A similar transaction was made successfully to the same account in June last year, in which an amount of R13 million was sent to A Re Ageng with instructions to send the money to the Life Recovery Centre “as a matter of urgency”.
Weeks after the department sent A Re Ageng the R10 million destined for Life Recovery Centre – precisely in October- it was discovered that R5 million had disappeared from A Re Ageng’s bank account.
While A Re Ageng is accusing the Gauteng social development department of flouting regulations in the two transactions, the Gauteng Treasury is now investigating A Re Ageng for the missing money and three other NGOs with which the department have conducted conduit transactions.
The NGO had alleged it was surprised to find that R10 million had been deposited into their Absa Bank account, without a recognizable reference, and without prior warning.
But the department dismissed the claim, insisting the NGO knew about it.
Meanwhile, the matter continues tomorrow at the South Gauteng High Court. The Gauteng government is now seeking to recover the full amount (R10 million) sent to A Re Ageng after it obtained a court order to freeze the NGO’s accounts.
Since last year, the Gauteng government has hogged the headline for various debacles. The latest was the death of over 100 psychiatric patients after they were recklessly transferred from the licensed Life Esidimeni private homes to 27 unlicensed facilities.
Ombudsman’s investigations found that the patients died of cold, hunger, a general lack of care. The debacle subsequently led to the dismissal of Qedani Mahlangu as Gauteng Health MEC. She was replaced by Gwen Ramokgopa, who once served Health MEC between 1999 and 2006.