State capture claims hook Kwinana on fraud charges

Ex-SAA board member out on R20k bail for alleged irregular awarding of contracts

Former SAA board member Yakhe Kwinana's failure to disclose past contract relationships compromised the proper governance administration of the airline, the National Prosecuting Authority (NPA) has claimed.

Kwinana handed herself over to the police on Tuesday and later appeared at the Palm Ridge magistrate’s court on charges of fraud, a schedule 5 offence.

She was granted R20,000 bail and ordered to surrender her travel documents to the investigating officer until the matter is finalised.

She is alleged to have failed to disclose to PwC, Nkonki Incorporated or the board of directors and the audit committee of SAA that Kwinana and Associates, of which she was the sole director, had previous contractual relationships with PwC and Nkonki.

"[Kwinana's] failure to disclose past contractual relationships with the said companies [Price Waterhouse Cooper and Nkonki] caused prejudice to the proper administration of the affairs of SAA and was also prejudicial to the public, who are entitled to procurements by organs of state that are fully compliant with the prescripts of the constitution and the law.

"On September 26 2011, the board approved the appointment of the two auditing firms. The accused attended the meeting of the board that made the appointment and participated in the proceedings. On both occasions, the accused failed to disclose her previous contractual relationships with both firms and thereby misrepresented that the contractual relationships never existed and there was no material fact to be disclosed by her.

“PwC and Nkonki also suffered reputational damage or prejudice in that a contract was awarded to them in circumstances that cast aspersions with them because their past contractual relationships were not disclosed to the bid adjudication committee of SAA that awarded the contract relating to the affairs of SAA,” claimed the NPA.

The allegations stem from the commission of inquiry into state capture chaired by former chief justice Raymond Zondo.

The commission looked into allegations of state capture, corruption and fraud in the public sector, including organs of state.

Kwinana is accused of failing to comply with the Public Finance Management Act during her tenure when she recommended and appointed the two auditing firms to audit SAA.

As a result, SAA was deprived of the opportunity to decide whether it would be in the interest of good corporate governance, accountability and transparency to conclude a contract with the two auditing firms, the state said.

The state said as a result of Kwinana’s failure to disclose their past relationship, the two firms financially benefited unlawfully. 

“SAA made payments amounting to approximately R59m because of the conclusion of a contract which would not have been concluded if all the material facts relating to the relationships between the accused and the two companies were known to the board of directors of SAA.”

During her bail application, Kwinana told the court she could only afford to pay bail of R5,000 as the only money she receives is from her pension fund. 

“I submit that my continued incarceration will be prejudicial to my family life because I provide family support to my elderly mother and grandmother. She is 104 and they rely on me for many issues. I have two children who depend on me. They are unemployed and one recently completed her studies at Stellenbosch University.” 

However, the state suggested she pay R20,000 as bail money is set to show the seriousness of the alleged crime. The court agreed with the state and fixed bail at R20,000. 

Addressing the issue of the plea, Kwinana said: “At this point I haven't had an adequate opportunity to consult properly with my legal representatives, having regard that I have not at this point in time had access to the police case docket. I accordingly wish to exercise my right to remain silent to all the charges which the state may prefer against me."

The matter has been postponed to January for docket disclosure.

SowetanLIVE