Pietermaritzburg High Court to hand down sentence in Sipho Shabalala’s fraud, corruption case

The State has asked the Pietermaritzburg High Court to impose the prescribed minimum sentence of 15 years for fraud and corruption in the case against a former head of the KwaZulu-Natal treasury, Sipho Shabalala.

Shabalala has been convicted in connection with a R44-million contract in 2006 for water purification plants for rural areas. The court found that he received R1.5 million from Uruguay businessman, Gaston Savoi whose company received the contract after normal procurement processes were circumvented.

State prosecutor, Advocate Mlungisi Magwanyana has argued in the Pietermaritzburg High Court that Sipho Shabalala as head of the KwaZulu-Natal treasury had a duty to follow the law instead of obeying instructions by political principals.

This was after Shabalala was convicted of fraud for the role he played in diverting money from a poverty alleviation fund to buy water purification plants which some of the municipalities did not want according to the evidence before the court.

Shabalala was also convicted of corruption and money laundering after receiving R1.5 million from the contractor as well as contravening the Public Finance Management Act.

In his plea explanation, Shabalala said the African National Congress (ANC) receives most of its donations from companies doing business with the government. According to his plea, the R1 million was a donation to the party.

The then treasurer-general of the ANC in KwaZulu-Natal confirmed in a sworn statement that he received R1 million from Shabalala which he raised ahead of the party’s provincial conference.

Dr Zweli Mkhize, who was MEC for Finance in 2006, testified that he instructed Shabalala to transfer funds from the poverty alleviation fund to Cooperative Governance to pay for the water purification plants.

Social worker, Mphumelelo Shiba testified Shabalala told her in a pre-sentencing interview that he did not believe he acted unlawfully and that he was only obeying instructions from his principals. This is after Judge Dhaya Pillay found such witnesses to be untruthful.

Arguing in mitigation of sentence, defence advocate, Khumbu Shazi told the court that Shabalala had an exemplary and stellar career up to the Intaka contract.

While the contract was pushed through as urgent in 2006, the last of the purification plants were only erected 10 years later. Judge Pillay is to hand down the sentence on Thursday.