Kimberley mental hospital: Six more in dock over 'monument of corruption'

SOL PLAATJE Municipality announced that the manager of the R2.5 billion Budget Facility for Infrastructure (BFI) water upgrade project, Winston Lucky Moyahi, would take special leave with immediate effect following his appearance in the Kimberley magistrate's court this week.

Moyahi appeared alongside his former co-directors of Babereki Consulting Engineers – Lourencia Crause and Louis Adriaan van Niekerk – as well as former heads of the Department of Public Works, Motlalepula Elias Selemela and Ruth Palm.

The accused are facing charges of fraud, corruption, money laundering, and contraventions of the Public Finance Management Act (PFMA) in connection with the Kimberley Mental Health Hospital saga.

The mental hospital, which became a symbol of government mismanagement, took 14 years to complete, with final costs ballooning to R2.1 billion.

The accused were arrested by the Hawks’ Serious Corruption Investigation team on May 28 in Kimberley, while former company director Edward Charles Pullen Petzer was arrested in Cape Town.

The six individuals are set to join their co-accused in the matter – former Public Works MEC and former ANC provincial chairperson John Block, former departmental HOD Patience Mokhali, and Tshegolekae Motaung, a director of Babereki Consulting Engineers – in court on June 2.

Hawks provincial spokesperson Lieutenant-Colonel Tebogo Thebe said it was alleged that in August 2005, then HOD of the Department of Roads, Transport and Public Works, Motlalepula Elias Selemela, awarded a contract for the construction of the new mental hospital to Vista Park/John Arch Investment.

“The project was set to commence in September 2005. The former acting HOD of the same department, Ruth Palm, allegedly approved the R36 million contract without following proper procurement procedures,” said Thebe.

“Due to poor workmanship, certain structures had to be demolished and a number of contractors changed hands.” 

Former HODs face multiple charges

National Prosecuting Authority (NPA) regional spokesperson Mojalefa Senokoatsane added that Selemela and Palm were facing multiple charges for contraventions of the PFMA.

“Selemela faces 26 counts involving unlawful payments totalling over R15.2 million. Palm faces 24 counts, involving irregular payments amounting to R39.4 million. Both accused are also charged with failing to recover penalties of approximately R11.3 million from service providers who breached contract terms.” 

Senokoatsane explained that Crause, Van Niekerk, Modisa and Petzer were directors of both Strabismis Trading (Pty) Ltd and Babereki Consulting Engineers (Pty) Ltd.

“Payments were made to Strabismis, while the company did not perform any work. The former directors are charged in both their personal and fiduciary capacities for their roles in facilitating payments of over R51 million to entities that had no valid contracts with the department. These payments, the State alleges, were made with full knowledge that the funds were not lawfully due.

“The charges stem from the appointment of Babereki Consulting Engineers on October 8, 2003, to provide civil and structural engineering services for the psychiatric hospital.” 

State advocate Naome Manaka, from the Specialised Commercial Crimes Unit, did not oppose the release of the accused, but advised that bail should be set between R20,000 and R50,000 to deter the accused from evading trial. 

She pointed out that the accused were facing serious charges, where the state suffered losses of over R1 billion. 

Manaka explained that Strabismis Trading (Pty) Ltd and Babereki Consulting Engineers (Pty) Ltd shared the same company registration number.

Legal representative Herholdt Robertson stated that Crause could only afford bail of R2,000. 

“Van Niekerk was a civil engineer but now rents out student accommodation in Bloemfontein. Moyahi is a civil engineer who was appointed on contract by Sol Plaatje Municipality.”

He noted that his clients were first-time offenders with no prior convictions or pending cases.

“Two years after the matter was put on the roll, the State is not ready to proceed with the trial. My clients cannot sell their homes in order to pay bail.” 

The legal representative for Selemela, Lulama Lobi, stated that his client was a 78-year-old pensioner without an income. 

Legal representative Riaan Bode pointed out that despite her sizable pension, Palm was also a pensioner and she was not able to afford R50,000 bail. 

He noted that Palm was already out on bail in an unrelated PFMA case.

Palm is expected to reappear in the Specialised Commercial Crimes Court on June 18 in connection with the R1.6 million tender that was awarded in 2016 by the Department of Sport, Arts and Culture for the Umsombomvu youth festival that never took place. She was the acting HOD at the time. 

Magistrate Kubashni Padayachee granted bail of R2,000 to Crause; R10,000 each to Van Niekerk, Moyahi and Palm; and R5,000 to Selemela.