Latest news with #Gumede
IOL News
7 days ago
- Politics
- IOL News
Inside the R320 million fraud case against Zandile Gumede: Court updates and revelations
Former eThekwini mayor Zandile Gumede and her spokesperson Siphelele Jiyane. Image: Tumi Pakkies / Independent Newspapers The Durban High Court earlier this week ruled in favour of Zandile Gumede, the former mayor of eThekwini Municipality, and her co-accused, ordering the State to reveal a report from the municipality claiming that the company that looked into the R320 million tender irregularities was unlawfully appointed. Gumede and her 21 co-accused are facing numerous charges, including money laundering, racketeering, fraud, corruption, and contravention of the Municipal Finance Management Act and the Municipal Systems Act, relating to the R320 million Durban Solid Waste (DSW) tender. Integrity Forensic Solutions (IFS), a forensic company contracted by eThekwini's City Integrity and Investigations Unit (CIIU), looked into irregularities in the tender. This is after the CIIU received anonymous documents alleging irregularities in the solid waste tender. After IFS investigated, the Hawks took over the matter, leading to arrests. The court in 2024 was told that there was an investigation by the city to probe the appointment of IFS. The city hired Masama Consulting to investigate. As a result of that investigation, the CIIU's top investigator was fired. He is considered a key witness in the corruption trial Counsel for Gumede, advocate Jay Naidoo SC, made an application to the court asking for it to compel the State to make the Masama report available. Naidoo said he wanted to open his cross-examination with the former CIIU boss to question him about the appointment of IFS. In delivering her ruling, Judge Sharmaine Balton ordered the State to provide the applicant (Gumede) with the file opened and registered with the CIIU, pursuant to a 'whistle-blower' report dated May 9, 2023, about allegations of irregularities committed by the former boss of CIIU and top investigator, in the appointment of IFS, to conduct the forensic investigation in the matter. Judge Balton said this included, among other things, a whistle-blower report dated May 9, 2023, the forensic investigation report, together with all annexures compiled by Masama Consulting (mostly referred to as the Masama report), and the CIIU recommendations on actions to be taken. The judge ruled that a copy of the agenda, minutes of the meeting, and resolutions of the Executive Committee and the full council of eThekwini Municipality about the Masama report must be made available to the defence. Additionally, she said a copy of the record of the disciplinary proceedings instituted against the CIIU's top investigator by the municipality should be made available to the defence. She said a charge sheet served on the CIIU investigator and the outcome of the disciplinary tribunal must be given to the defence. 'The respondent (State) is directed to provide the information to the applicant (Gumede) within 10 days of this order,' she said. Additionally, the defence started its cross-examination of a State witness who worked for the tenders and contracts unit in eThekwini. The witness said she was part of the Executive Acquisitions Committee (EAC), an advisory committee that was established by former city manager Sipho Nzuza. She told the court that, given the urgency of getting contractors to collect waste in the city, Nzuza was well within his rights to require the former deputy head of Supply Chain Management, Sandile Ngcobo, to sign the letters of award on December 28, 2017. The court learned that the contracts of service providers who were collecting waste around the city were going to expire on December 31, 2017. The Solid Waste Unit requested permission from the Bid Adjudicating Committee (BAC) to hire qualified service providers to collect waste. This comes after it was unable to complete the bidding procedures in time due to the large number of bidders it received for the November tender. On December 19, 2017, the BAC approved quotations for the companies. The witness did not, however, bring the BAC's decisions to the December 21, 2017, EAC meeting. She explained that it was because she had been off since December 20. She also mentioned that the BAC had authorised the quotations, but with a need that compliance checks to be performed. Following protocol, she had also stated that the EAC's agenda had been set days in advance. The trial continues [email protected]
IOL News
28-05-2025
- IOL News
State witness reveals shocking details in Zandile Gumede's R320 million fraud trial
Former eThekwini mayor Zandile Gumede and second accused Mondli Michael Mthembu. Image: Nomonde Zondi In an emotional testimony, a State witness told the Durban High Court on Wednesday that in December 2017, she was forced to issue letters of award to service providers to collect waste without allowing the 14-day cooling-off period. She was testifying in the R320 million Durban Solid Waste (DSW) tender fraud trial involving the former mayor of eThekwini, Zandile Gumede. Gumede and her 21 co-accused are facing numerous charges, including money laundering, racketeering, fraud, corruption, and contravention of the Municipal Finance Management Act and the Municipal Systems Act relating to the tender. The State witness served as a senior official in the tenders and contracts unit around December 2017, which is a period during which the State is alleging that the offences were committed by the accused. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ She said she was forced to break internal controls by issuing letters of appointment to companies that had been recommended to collect waste without the signature of former city manager Sipho Nzuza. The witness, who cried while testifying in virtual court, said this was a breach of protocol. However, things took a sharp turn when advocate Jay Naidoo SC, counsel for Gumede, put the witness in a corner about why the December reports from the Bid Adjudication Committee (BAC) did not reach the advisory committee led by former city manager Sipho Nzuza on December 21, 2017. The witness was part of the Executive Acquisitions Committee (EAC), an advisory committee, formed by Nzuza. She was on this committee in her capacity as a financial officer. As a secretariat at the BAC, she crafted and prepared the agenda of all the committees, including the EAC. She told the court that the reason the BAC's December reports did not make it to the EAC was that one report that was tabled at BAC on December 14, 2017, was the same as the one tabled on BAC on November 27, 2017. In November, the Solid Waste Unit sought authority from the BAC to advertise the tender contracts for waste collection. Upon realising that they had received a lot of tender applications, the unit went to the BAC on December 14 to seek authority to invite experienced service providers to collect waste. This was approved on December 19, and the unit had come back to the BAC with all the particulars of the experienced services. The court has heard that only compliance checks were not done. When Naidoo asked her if, at the BAC meeting on December 14, the Solid Waste Unit stated why it came to the committee for the same thing, she said the December report was addressed to Nzuza, not the committee. 'It is not my fault that the line department came to BAC with the same thing,' she said. However, after a while, she agreed with Naidoo that the report tabled on December 14 included illegal dumping and it was different from the November one. 'It is slightly different,' she said. She further changed her answer to say that the reason why the decisions made by the BAC on December 14 and 19 did not reach the EAC meeting on December 21, 2017, because compliance checks were not conducted.. She said in the next meeting of the EAC, which was on January 29, 2018, the December reports made it to the meeting.
IOL News
27-05-2025
- IOL News
State ordered to avail evidence regarding fraud investigation into former mayor Zandile Gumede
Former eThekwini mayor Zandile Gumede and her supporters. Image: Nomonde Zondi/File The Durban High Court has ordered the State to make a report available that states that the forensic company that investigated the former mayor of eThekwini Zandile Gumede and 21 others, was appointed unlawfully by the eThekwini municipality's investigation unit to investigate tender irregularities surrounding the R320 million Durban Solid Waste (DSW) tender. Gumede and her 21 co-accused are facing numerous charges including money laundering, racketeering, fraud, corruption, and contravention of the Municipal Finance Management Act and the Municipal Systems Act relating to the DSW tender. The forensic company is Integrity Forensic Solutions (IFS); it was outsourced by the City Integrity and Investigations Unit (CIIU) to investigate DSW tender irregularities. This is after the CIIU received a stack of documents anonymously alleging solid waste tender irregularities. After IFS investigated, the matter was handed over to the Hawks and arrests were made. The court in 2024 was told that there was an investigation done by the City to probe the appointment of IFS. As a result of that investigation, the CIIU's top investigator was fired - this investigator is one of the crucial witnesses in this matter. The media is prohibited from mentioning the names of people mentioned in the order as they are State witnesses. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Delivering her ruling, Judge Sharmaine Balton said the State should provide Gumede with the file opened and registered with the CIIU, pursuant to a 'whistleblower' report dated May 9, 2023, in relation to allegations of irregularities committed by the former boss of CIIU and top investigator, in the appointment of IFS, to conduct the forensic investigation in this matter. The former boss of the CIIU is a key witness in the corruption trial of Gumede. Judge Balton said this included, amongst other things, a whistleblower report dated May 9, 2023, the forensic investigation report, together with all annexures compiled by Masama Consulting (mostly referred to as the Masama report) and the CIIU recommendations on actions to be taken. Masama Consulting is the company that investigated the appointment of IFS and issued a report. Judge Balton said a copy of the agenda, minutes of the meeting, and resolutions of the Executive Committee and the full council of eThekwini municipality about the Masama report must be made available to the defence. Additionally, she said a copy of the record of the disciplinary proceedings instituted against the CIIU's top investigator by the municipality, should be made available to the defense. She said a charge sheet served on the CIIU investigator and the outcome of the disciplinary tribunal must be given to the defence. 'The respondent (State) is directed to provide the information to the applicant (Gumede) within 10 days of this order,' she said. Although Gumede made the application before court, the other defence counsels told the court that they support it. During the hearing of this application in March, Gumede's counsel advocate Jay Naidoo SC, told the court that CIIU did not follow the supply chain management protocols in appointing IFS.
IOL News
23-05-2025
- Business
- IOL News
Anticipated ruling in Zandile Gumede's R320 million corruption trial
Former eThekwini mayor Zandile Gumede and her supporters. Image: Nomonde Zondi The Durban High Court will on Monday make the much-anticipated ruling about having the reports and annexures admitted into the Zandile Gumede R320 million corruption and fraud trial and about the appointment of a forensic company that investigated this matter. The forensic company Integrity Forensic Solutions CC (IFS) was outsourced by the eThekwini Municipality's City Integrity and Investigations Unit (CIIU) after it received a stack of documents anonymously alleging tender irregularities of Durban Solid Waste (DSW). During court proceedings on Friday, Judge Sharmaine Balton added that she had completed the draft order and invited the State and defence to have a look at it, and said it would be delivered on Monday morning. Gumede's counsel, Advocate Jay Naidoo, had put an application requesting the State to provide a report from Masama Consulting and annexures to the defence so they could be used to cross-examine key State witnesses, some of whom are former senior officials of CIIU. Video Player is loading. Play Video Play Unmute Current Time 0:00 / Duration -:- Loaded : 0% Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Background Color Black White Red Green Blue Yellow Magenta Cyan Transparency Opaque Semi-Transparent Transparent Window Color Black White Red Green Blue Yellow Magenta Cyan Transparency Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Dropshadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. Advertisement Next Stay Close ✕ Masama Consulting was hired by the city to probe the appointment of the IFS after a whistleblower alleged that it was unlawfully appointed. The court has learned that an investigator from CIIU was dismissed by the municipality after the probe into the IFS. The State has opposed Naidoo's application and said it was irrelevant to the charges placed against the 22 accused. The accused face numerous charges which include money laundering, racketeering, fraud, corruption, and contravention of the Municipal Finance Management Act and the Municipal Systems Act relating to the DSW tender. The spokesperson for Gumede, Siphelele Jiyane, said the judgment was supposed to be heard before the session started on Monday, but that did not happen. The whole week, it had been expected for the court to say something about it, but it did not. 'We were hoping for it to be heard this morning, but it did not happen,' he said. Jiyane said they were eager to hear the court's decision. 'The cracks of this case lie with the application that has been made.' He said that should the ruling favour Gumede and her co-accused, continuing with the case would be a futile exercise. 'As we have been saying, it's a waste of taxpayers' money as this case has continued for seven years. The NPA (National Prosecuting Authority) would have to account for all these years wasted,' Jiyane added. Additionally, Jiyane said if the ruling is against the accused, there are many ways to continue making new applications. However, he said that what is in the application still stands, that the IFS is charged by the municipality. Meanwhile, the State witness, who is a former municipal official, continued to lead evidence, telling the court about her duties. She will likely continue leading her evidence on Monday after the ruling.
The Citizen
23-05-2025
- Business
- The Citizen
Trio of medical aids fail to maintain required liquidity
Medihelp, Sizwe Hosmed and Transmed solvency ratios all below 25% – Council for Medical Schemes. The solvency rate across the industry is down, but at 43% is significantly higher than the required minimum. Picture: AdobeStock Three medical aid schemes – Medihelp, Sizwe Hosmed Medical Scheme and Transmed Medical Fund – failed to maintain their solvency ratios at or above 25% in 2023, the minimum statutory prescribed level in the Medical Schemes Act. This is revealed in the Council for Medical Schemes (CMS) Financial Performance Industry Report 2023 released this week. Transmed improved its solvency ratio to 23.79% in 2023 from 17.7% in 2022 but this is at least the fourth consecutive year it has failed to comply with the statutory prescribed solvency ratio after achieving a liquidity ratio of 19.72% in 2021 and 22.37% in 2020. Sizwe Hosmed failed to meet the prescribed solvency level in 2023, with its solvency ratio deteriorating to 15.73% in 2023 from 25.59% in 2022. Medihelp's solvency ratio deteriorated to 23.84% in 2023 from 33.93% in 2022. The report said these three schemes account for 4.11% of all medical scheme beneficiaries. The number of medical aid beneficiaries in South Africa increased from 9 039 259 in 2022 to 9 127 453 in 2023, but only 14.7% of the population was covered by medical aid schemes in 2023 compared to 16% in 2000. The solvency ratio of a medical aid scheme refers to the accumulated funds of a scheme as a percentage of its gross annual contributions. Moneyweb requested an update from the CMS on the liquidity ratio status of Medihelp, Sizwe Hosmed and Transmed but a response has not yet been received. ALSO READ: Why you shouldn't wait before joining a medical aid scheme Industry-wide view The report said the solvency ratios of both open and restricted schemes deteriorated in 2023. CMS chief executive and registrar Dr Musa Gumede said in the report that despite medical schemes incurring a net surplus for the year, due to the mathematical calculation used, the industry solvency declined from 47.14% in 2022 to 43.45% in 2023. Gumede said it is expected the solvency level will continue to decrease in the next few years due to the denominator representing the increased level of contributions before stabilising. He added that the 2023 solvency of 43.45% does however exceed pre-Covid-19 pandemic levels of 34.54% in 2018 and 35.61% in 2019 – and is also significantly higher than the minimum required level of 25%. Gumede added that 'relevant healthcare expenditure' (claims) per average beneficiary per month continued to increase above inflation in 2023 – rising 8.7% from R1 840.48 in 2022 to R2 000.57. These claims were escalating pre-Covid-19 and it is expected this trend, which was interrupted by the pandemic, will continue unless drastic interventions are made. ALSO READ: Increasing medical aid scheme costs: What are the alternatives? Gumede said increased expenditure is a function of changes in utilisation and tariffs, with utilisation increases closely linked to the worsening demographic profile of medical schemes. He said medical scheme membership grew by only 1.04% in 2023 while the average age of beneficiaries increased by 0.27 years. 'The aftermath of Covid-19 continued to impact medical schemes during the 2023 financial year. 'Increased utilisation due to the release of pent-up demand was noted across the industry. 'Based on monthly indicator information submitted during 2024, the increased levels of utilisation continued in 2024 and had to be factored into the 2025 year's contribution increases,' he said. Gumede said schemes implemented contribution increases below consumer inflation during the 2021 and 2022 financial years to provide temporary financial relief to members during the economic downturn. Schemes were able to implement these interventions due to reserves built up during the Covid-19 pandemic. However, Gumede said the lower contribution increases resulted in underpricing at an insurance service result level, resulting in a deficit of R6.73 billion for the 2023 financial year, which will need to be addressed and corrected in the coming years. Gumede said the CMS has encouraged medical schemes to correct the pricing over a period rather than implementing it as a single, large corrective event. ALSO READ: Watch out: medical aid scheme surprises that can cost you money Sizwe Hosmed The report said Sizwe Hosmed Medical Scheme's increase in relevant healthcare expenditure outpaced the increase in its contributions. It said the scheme experienced an increase of 17.19% in the relevant healthcare expenditure per average beneficiary per month (pabpm) in 2022, with a further increase of 4.12% pabpm in 2023, compared to the actual insurance revenue increase of 2.83% pabpm. The report said the scheme fell below the minimum required solvency level at the beginning of 2023 and has submitted three business plans during the financial year. It said the first business plan was retracted by the scheme, the second was rejected due to, among other things, the appropriateness of the claims assumptions to which the scheme was unable to respond. The scheme subsequently appointed a new actuary with medical scheme-specific experience and a third business plan was submitted together with its 2024 year's pricing. The report said the scheme subsequently had to realign this submission with its pricing submission. 'This business plan was subsequently rejected as the 2023 actual results differed significantly from the projections – and cast aspersions on whether the scheme understood its underlying claims make-up,' it said. The report said the CMS requested further actuarial claims analysis to be submitted, and the board of trustees and registrar agreed to the appointment of a statutory manager. It said the scheme's business plan for the 2025 year has been approved by the registrar. ALSO READ: How to make the most of your medical aid scheme Transmed The CMS said Transmed Medical Fund has a worse demographic profile than the industry average. It said schemes with higher demographic profiles are at particular risk of the so-called 'death spiral', where adjustments to pricing for the profile of its members might result in the unaffordability of contributions and the subsequent loss of its younger members, therefore exacerbating the effect. The report said the employer group provides specific funding for the scheme's Guardian option, which had a pensioner ratio of 94.53% and a relevant healthcare expenditure ratio of 84.84% at the end of 2023. It said that with the exception of the Prime option, the remainder of the options incurred insurance service surpluses in 2023. The Prime option only has 237 beneficiaries, with an average age of 75.51 years and a pensioner ratio of 83.54%, it said. The registrar approved the scheme's business plan for the 2024 and 2025 years. ALSO READ: Gap cover analysis shows massive erosion of medical scheme benefits Medihelp The report said Medihelp deliberately underpriced its benefits during the Covid-19 pandemic in an attempt to provide relief to its members. The scheme experienced a 3.89% decrease in its insurance revenue pabpm from 2021 to 2022, compared to an average CPI of 6.9% during the same period, and an increase of 3.51% in its insurance revenue pabpm. The report said the scheme corrected its pricing for the 2024 financial year and submitted the required business plan, which was subsequently approved by the registrar. This article was republished from Moneyweb. Read the original here.
