Johannesburg - More than R35 million which was misappropriated from the Unemployment Insurance Fund’s (UIF) Covid-19 Temporary Employee/Employer Relief Scheme (TERS) is to be reimbursed after the CEO of the Eastern Cape Transport Tertiary Co-Operative Limited (ECTTC), Dr Nokuthula Mbebe, made numerous fraudulent applications.
Mbebe made the applications to the UIF for TERS payments in April 2020.
The High Court of South Africa, Eastern Cape Division, sitting in Makhanda granted the National Prosecuting Authority’s Asset Forfeiture Unit (AFU) a forfeiture order against the misappropriated money valued at R35m.
These funds were preserved from 36 different bank accounts belonging to the ECTTC and its affiliate taxi co-operatives and linked business entities. All accounts were frozen upon being identified.
NPA regional spokesperson Luxolo Tyali said: “The ECTTC has, to date, tried on four separate occasions to have the High Court reconsider the preservation orders and these efforts were finally dismissed by the court on 26 May 2022.
“This prompted the AFU, on behalf of the National Director of Public Prosecutions (NDPP), to place the matter on the High Court roll on 7 June 2022 and to apply for the forfeiture of all the preserved property, which was granted.”
The TERS scheme was established at the height of the pandemic by the Minister of Employment and Labour to assist those employees who had lost income due to Covid-19.
The ECTTC is an umbrella organisation created to assist its affiliate co-operatives to comply with the law and to ensure that the local transport industry is properly regulated and functions according to legal requirements.
It made applications for its own employees and for those belonging to the ECTTC. However, a number of irregularities were found in the first batch of applications.
Tyali said: “There were a large number of irregularities with the first batch of ECTTC applications, including applications for TERS benefits for 22 persons in the employ of the government, 22 persons who were deceased and one person who was incarcerated at the time - persons who obviously did not qualify for the benefits.
“After further investigation, it was discovered that the information with regard to the incarcerated person and at least one of the deceased persons was incorrect.
“The AFU relied on information from the UIF investigators who, in turn, relied on information from the auditor-general, whose information was not accurate.
“The correct information was eventually relayed to the court with regard to the mentioned deceased person and incarcerated individual.”
Further investigations were launched regarding other batches of applications that were submitted to the UIF, Tyali said.
“The second batch of applications was made on behalf of 66 taxi co-operatives that belong to the ECTTC and the total amount paid out was just over R220m,” he said.
During audits by the UIF, the ECTTC was unable to verify the accuracy of the applications by providing documents or paper trails that would correspond with the information in the applications.
“This is in contravention of the directives made in relation to TERS payments, as well as the Memorandum of Agreement that all entities applying for TERS funds must sign. The payments, as they stand, remain as the proceeds of unlawful activities as they do not comply with the law,” said Tyali.
He added: “The East London AFU, in conjunction with the UIF Fraud and Corruption investigators, the Financial Intelligence Centre (FIC) as well as the SAPS, investigated these applications in a well-orchestrated joint operation.
“On 30 July 2021, the High Court granted the AFU a preservation order in terms of section 38 of the Prevention of Organised Crime Act 121 of 1998. This was followed by two further preservation orders obtained on 15 August 2021 and 15 September 2021.”
Tyali added that the outcome in court on Tuesday was made possible through the collaborative efforts of the various crime fighting units to recover funds that were unlawfully received during the government’s efforts to fight the Covid 19 pandemic.
IOL