R58m payback demanded from accounting firm
The eThekwini Metropolitan Municipality has filed a civil lawsuit demanding that a politically-connected company of accountants pay back R58m it was paid for work council employees had already done for free.
A News24 report says in papers filed in the KZN High Court (Durban) in May, eThekwini is demanding that Morar Incorporated reimburse the council the R58m in payments, as the firm did not deliver any of the work for which it was contracted.
The papers show that between May 2018 and November 2019, former eThekwini municipal manager Sipho Nzuza and other senior officials liberally violated supply chain policies and gave Morar Inc five contracts:
* Review the council’s supply chain management processes, twice.
* Implement consequence management.
* Review revenue management.
* Read water meters.
The summons sets out how all the tenders were awarded to Morar Inc irregularly and unlawfully.
‘At all material times, the first and second defendants (Morar Incorporated and Nzuza) were aware that the appointments were unlawful and that there was no service rendered to the plaintiff.’
In its response, Morar Inc denied the contracts were illegal and unlawful.
The company argued that in the event that it is indebted to eThekwini, the debts are now prescribed.
News24 notes Morar Inc was owned by the late controversial businessman Roshan Morar, who died in 2022. Morar – a one-time chairperson of Ithala Development Finance Corporation – was also a former director of the Public Investment Corporation.
He was close to former Health Minister Zweli Mkhize and audited a number of companies linked to him and his wife.
In 2020, eThekwini appointed Nexus – a firm of private forensic detectives – to investigate allegations of corruption around Morar Inc’s projects.
Nexus’ investigators found that Nzuza threw supply chain policies out the window and appointed Morar Inc without following procurement processes. He also approved most of Morar Inc’s payments.
Nzuza was municipal manager between 2017 and 2021.
He is currently on trial – alongside former Mayor Zandile Gumede and 20 others – for fraud, corruption, money laundering and racketeering.
The group was arrested in 2019 and 2020 in connection with a R320m waste removal contract.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
