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Dated: February 6 2013
By DAILY NEWS REPORTER

The former financial manager of Indiza Infrastructure Solutions has testified that she resigned after less than a year in the post, having discovered fraudulent invoices which her boss was unwilling to discuss.

Jillian Broughton, who was hired by Indiza managing director Jabulani Mabaso in August 2006, said she quit in May 2007 after she discovered that invoices had been created and then submitted to the KZN Department of Education.

“I was not comfortable with the way things were done,” Broughton told the Pietermaritzburg High Court on Tuesday.

Mabaso is on trial and is accused of defrauding the department of R200 million. It is alleged that he made his staff fabricate and inflate invoices.

According to Broughton’s evidence, these invoices were made in the name of African Spirit Trading and Palm Stationers, which were submitted to the education department.

Broughton said Mabaso would have been aware the invoices were forged because he was solely responsible for making payments to suppliers.

Broughton herself only became aware of the forged invoices when a department official contacted her to verify the details of Palm Stationers.

When she confronted Mabaso with a forged invoice and asked him how they should proceed, Broughton said Mabaso was “not agreeable to discussing it”. That is when she made the decision to resign.

Mabaso has pleaded not guilty to four charges of fraud, seven of forgery and seven of uttering. The charges relate to a tender awarded to Indiza by the KZN Department of Education for the supply of stationery to schools in 2005.

Indiza acted as an agent for the department, procuring stationery from suppliers and facilitating its supply and distribution to schools in the province.

Indiza is being liquidated.

The State alleges that African Spirit Trading was a company created by Mabaso, which served as a supplier of stationery to Indiza at inflated prices, which in turn supplied the department.

Mabaso is out on bail of R500 000. The trial continues.

Original article here

Dated: 15/02/2007
Source: KwaZulu-Natal Provincial Government
Title: Cronje: Report on re-opening of schools and plans for improvement
Click here for the Original Article Here

Below are excerpts from the report.

In regard to stationery, honourable members are aware of an ongoing dispute between the Department of Education and Indiza. Indiza demanded to be paid an amount of R128 million rand for previous work. I wish to reiterate that at the time Indiza indicated that they would stop deliveries and refused all communication with the Department, almost all schools had received basic stationery such as exercise books, pens and pencils. Learning and teaching should therefore not have been adversely affected by Indiza’s actions. In addition, reports from our schools and circuits indicate that some deliveries are indeed still taking place.

Only eight schools have now reported to us that they have not received the core stationery from Indiza. The Department is currently analysing the status of the schools and the orders supposedly placed with Indiza. It is only then that we can verify whether the schools did place orders or whether they should have ordered stationery on their own, depending on whether or not they are section 21 schools. Section 21 schools had the 2007 school funding norms allocation transferred to them in the second half of 2006 already and would therefore be able to purchase their own stationery from an alternative supplier should Indiza fail to deliver.

Let me place it on record that the sum of R128 million owed by the Department is not in dispute. The issue is who it is that the Department should pay. The Department awarded a contract to a joint venture called Indiza Motswedi. However, the invoices received came from Indiza Infrastructure Solutions, a different legal entity. We therefore cannot pay this entity without risking litigation against us from Motswedi. We have organised several meetings between Indiza and ourselves, five of which were unilaterally called off by Indiza. We believe firmly that it is in everyone’s interest if this matter were to be speedily resolved through the Department being provided with invoices from Indiza Motswedi as well as details of their bank account. I wish to signal that we have no intention of leaving this matter to go on without an end. In this regard, should such details not be provided, we intend approaching the High Court to expedite the resolution of this matter.

Witness tells of inflated invoices

January 31 2013 at 02:06pm
By SHERLISSA PETERS

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Durban – The businessman accused of defrauding the KZN Education Department of R200 million allegedly made his staff fabricate and inflate invoices.

This was according to a special investigator in the case involving Jabulani Mabaso, who was testifying before the Pietermaritzburg High Court yesterday.

Alan Nixon, an investigator with the now disbanded Scorpions at the time of the probe into Mabaso and his company, Indiza Infrastructure Solutions, said the unit had received a tip-off from an informer of a multimillion rand fraud.

He then interviewed a former employee of Mabaso’s, Jillian Broughton, who will also be called as a State witness.

Broughton told Nixon she had resigned from Indiza shortly after being made to “create” invoices in the name of African Spirit Trading and Palm Stationers, which were submitted to the education department.

The invoices indicated a misrepresentation of amounts owing for services rendered.

Mabaso, the former managing director of Indiza, has pleaded not guilty to four charges of fraud, seven of forgery and seven of uttering.

An amended indictment was served on Mabaso on Monday after the State withdrew charges against former education department chief financial officer, Pam Zulu.

The charges against Mabaso relate to a tender awarded to Indiza by the KZN Department of Education for the supply of stationery to schools in 2005.

Indiza would act as an agent for the department, procuring stationery from suppliers and facilitating its supply and distribution to schools in the province. Indiza is currently being liquidated.

According to the indictment, after Indiza was awarded the tender, an appeal was lodged by unsuccessful bidders.

The department then entered into a service level agreement with Indiza for three months between June and September 2005 to continue the procurement and distribution of stationery pending the finalisation of the appeal.

In November 2005, a second service agreement was entered into between Indiza and the department for a period of two years. This agreement was only signed by Mabaso, but never signed by the department.

Mabaso continued supplying stationery to the department and invoices were issued.

The State alleges that African Spirit Trading was a company, created by Mabaso, which served as a supplier of stationery to Indiza at inflated prices, which in turn supplied the department.

From July 2005 to January 2007, Indiza invoiced the department R479 290 587 for services.

Mabaso is alleged to have defrauded the department of R197 466 837 by fabricating and inflating invoices.

In his plea, Mabaso said his understanding of the scope, meaning and purport of the service level agreement between him and the department was that Indiza was entitled to profit for providing the stationery to schools.

The department did not require Indiza to disclose the prices at which it purchased the stationery from suppliers when Indiza submitted its own invoices for payment.

Mabaso said he bore no knowledge of incorrect invoices being submitted. As far as he was concerned, all invoices were correct and calculated in accordance with his understanding of the service level agreement.

During the period covered in the indictment, Indiza submitted 32 invoices to the department. Only three of these are at issue.

Mabaso said he did not consent to or authorise the submission of these invoices to the department.

Mabaso is out on bail of R500 000.

The trial continues.

Daily News

31 Jan 2013
by Ingrid Oellermann

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KWAZULU-NATAL businessman Jabulani Mabaso has denied defrauding the KZN Education Department of around R200 million.

He said in a statement before acting high court Judge Kobus Booyens yesterday that it was his understanding that his company, Indiza Infrastructure Solutions, was entitled to profit from the provision of stationery to schools in terms of an agreement with the department.

Mabaso pleaded not guilty to a total of 18 counts of fraud, forgery and uttering committed between 2005 and 2007, arising from a tender awarded to Indiza to supply stationery to provincial schools.

In a statement read to the court by his advocate, Willie Vermeulen SC, Mabaso maintained he knew nothing about the alleged incorrect suppliers’ invoices being presented to the department.

He said his understanding was that Indiza was entitled to profit in regard to the provision of stationery to schools in terms of a service level agreement reached with the department in 2005.

The department did not require Indiza to disclose prices at which it bought stationery from Indiza’s suppliers when Indiza submitted its own invoices for payment.

Nor did the agreement require that suppliers’ invoices be submitted in order for Indiza to be paid for its services to the department, according to his plea.

The court heard evidence that the service level agreement was a temporary agreement between Mabaso and the department on an urgent basis to ensure that stationery was supplied and distributed to schools pending the outcome of an appeal lodged against the award of the tender.

Mabaso submitted in his plea that at the time of its implementation, the service level agreement was in fact “void for vagueness and illegal” as it did not comply with the KwaZulu-Natal Procurement Act of 2001 and relevant supply chain management policies and delegations. However, at the time, he said, he did not know that.

State advocates Wendy Greef and Ayesha Bissessur yesterday served an amended indictment on Mabaso following the withdrawal of charges against his former co-accused, Pamela Bosman-Zulu.

In terms of the final indictment, he no longer faces charges of corruption or money laundering.

The state alleges in its indictment that in terms of the agreements reached between the department and Indiza, the company was appointed as a consultant or “managing agent” to procure goods and services on behalf of the department and was to be paid a set management fee for the duration of the contract. “It was never the intention of the Department of Education that Indiza would be entitled to inflate the cost of stationery and accessories procured from suppliers and/or manufacturers,” the indictment states.

The state alleges that Mabaso knew that he was required to negotiate with suppliers to obtain stock at the lowest possible prices, and where discounts were given to declare these to the department.

Instead, it is alleged, prices were inflated and in some instances false invoices were created.

According to the indictment, the suppliers used by Indiza included African Spirit Trading, a company which was created by Mabaso.

The state alleges this company supplied stationery to Indiza at marked up and inflated prices, which were passed on to the department.

A former special investigator attached to the now defunct Scorpions unit, Alan Nixon, told the court he began investigating the Indiza contract after an informer had come to his office on October 26, 2006, and made allegations about irregularities concerning the award of the tender to Indiza.
The case is proceeding.

This article was originally published ion the following link

 

January 31 2013 at 01:00pm
Sharika Regchand

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He was entitled to make a profit and he had an agreement with the education department to do so, businessman Jabulani Mabaso told the Pietermaritzburg High Court at the start of his fraud trial yesterday.

Mabaso is facing 18 forgery and fraud charges, amounting to R200 million, in which he allegedly manufactured invoices, forged documents and created a ghost supplier.

He allegedly processed these transactions through his company, Indiza Infrastructure Solutions.

However, he claims the department did not require his company to disclose its purchase prices when invoices were submitted for payment.

The agreement also had not required that these suppliers’ invoices be submitted to the department for Indiza to be paid.

These submissions were made yesterday by advocate Willie Vermeulen SC, in amplification of Mabaso’s not guilty plea.

The offences took place between 2005 and 2007. Vermeulen said that Mabaso “bore no knowledge of the submission of incorrect suppliers’ invoices in the three instances as alleged by the State”.

“As far as Indiza’s invoices are concerned, all such invoices were correct and calculated in accordance with his understanding of the service level agreement.”

He said that during the period covered in the indictment, Indiza submitted 32 invoices to the department and only three were at issue.

Alan Robert Nixon, who was a special investigator attached to the Directorate of Special Operations (the Scorpions), said that in October 2006 an informer came to him and made allegations about the illegal awarding of a tender to Indiza.

The day before, his office had been instructed to confiscate all documents relating to Indiza. A preliminary investigation then began.

During the course of the investigations he interviewed Gillian Broughton, who had been employed by Indiza. She admitted creating invoices in the name of a fake company, African Spirit, and the legitimate company, Palm Stationers, which she had submitted to the department.

Nixon said she would be used as a State witness.

State advocate Wendy Greef said that suppliers would also be called to testify. They would say that what they invoiced Mabaso was far lower than what he submitted to the department.

The case continues.

Originally published here

KwaZulu-Natal businessman Jabulani Mabaso pleaded not guilty on Wednesday to charges of fraud and submitting forged invoices to claim hundreds of millions of rands from the provincial education department.He tendered the same pleas for his company Indiza Infrastructure Solutions in the Pietermaritzburg High Court.

The 35-page indictment alleges that his company and subsidiaries won a tender to initially provide supplies and services to the department for its Learner-Teacher programme between 2005 and 2007.

A provision for the agreement was that discounts allowed Indiza and its subsidiaries to buy the stationery supplies that would be credited to the department.

Alleged false invoices were submitted to the department.

People who allegedly falsified figures in invoices, at the command of the accused, are expected to testify for the State. Mabaso is out on bail of R1 million.

Acting Judge Kobus Booyens is presiding over the matter, the lead State counsel is Advocate Wendy Greef and Advocate Willie Vermeulen SC is the defence counsel.

The case is expected to last weeks and thousands of pages of facts and figures are to be used in the trial.

Excerpt from Linked Document:

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.

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Early 2005

• Request for tender (“RFT”) issued by DoE KZN per Tender 1373E/2005 for the supply of stationary to Government Schools in KZN

19 March 2005

• Meeting announcing LTSM project to centralise LTSM procurement and delivery of LTSM to schools in KZN [Ntuli B2V5.3 paragraph 12]

24 March 2005

• Implementation plan tabled for consideration [Ntuli B2V5.2 annexure NLN 1]
• LTSM project team established – Mrs N L Ntuli; Mrs M Mkhize; Mrs T T Sabelo and Mr N W Ndlela

April 2005

• Partnership agreement entered into between Indiza and Motswedi
• Download the Rest of the Document

Download the Full Chronology Here