IN THE KWAZULU NATAL HIGH COURT, PIETERMARITZBURG REPUBLIC OF SOUTH AFRICA HELD AT PIETERMARITZBURG

CASE NO: CC160/09 In the matter between:

THE STATE

versus

ZAKHELE INNOCENT JABULANI MABASO ACCUSED 1

INDIZA INFRASTRUCTURE SOLUTIONS (PTY) LTD ACCUSED 2 as represented by Zakhele Innocent Jabulani Mabaso

I N D I C T M E N T

The Deputy Director of Public Prosecutions: KZN alleges that the accused are guilty of the following crimes:Counts:

1. FRAUD - ACCUSED 1 AND 22. FORGERY - ACCUSED 1 AND 23. UTTERING - ACCUSED 1 AND 24. FORGERY - ACCUSED 1 AND 25. UTTERING - ACCUSED 1 AND 2

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6. FORGERY - ACCUSED 1 AND 27. UTTERING - ACCUSED 1 AND 28. FORGERY - ACCUSED 1 AND 29. UTTERING - ACCUSED 1 AND 210. FORGERY - ACCUSED 1 AND 211. UTTERING - ACCUSED 1 AND 212. FRAUD - ACCUSED 1 AND 2 13. FORGERY - ACCUSED 1 AND 214. UTTERING - ACCUSED 1 AND 215. FRAUD - ACCUSED 1 AND 2 16. FORGERY - ACCUSED 1 AND 217. UTTERING - ACCUSED 1 AND 218. FRAUD - ACCUSED 1 AND 2

ADV. KD GOVENDERDEPUTY DIRECTOR OF PUBLIC PROSECUTIONS: KZNPREAMBLE:

WHEREAS AT ALL RELEVANT TIMES:

1. Accused 1 herein is Zakhele Innocent Jabulani Mabaso, a

businessman and Managing Director of, inter alia, the following companies:

a. Indiza Infrastructure Solutions b. Indiza Infrastructurec. Indiza Capitald. Indiza Propertiese. Indiza Communicationsf. Indiza Investment Holdingsg. Indiza Logistics and Management Servicesh. African Spirit Trading 268i. Twilight Logistics

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2. Accused 2 is Indiza Infrastructure Solutions (Pty) Ltd (hereinafter referred to as “Indiza”) a company of which Accused 1 was the sole director, and which is a corporate body as contemplated in section 332 of Act 51 of

1977. Indiza Infrastructure Solutions is the process of being liquidated.

3. Accused 1 was at all material times the director/servant of the

said corporate body and he acted in the exercise of his powers or the performance of his duties as director/servant of the said corporate body or in furthering or endeavouring to further the interests of that corporate body.

AND WHEREAS the said corporate body may be held criminally liable in terms of section 332(1) of Act 51 of 1977.

BACKGROUND

4. During 2005 the DOE embarked on a programme for the procurement of stationery and accessories to all the schools established in terms of Section 20 of the South African Schools Act No.84 of 1996 (“the Section 20 schools”) in the Province of KwaZulu Natal. The said programme was referred to by the DOE as the Learner Teacher Support Material (“LTSM”).

5. In order to implement the LTSM, the DOE followed its procurement process, in terms of which suitable service providers were to be identified and their services secured for the fulfilment of the said initiative.

6. The intention of the DOE was to appoint a single service provider as a managing agent that would act on behalf of the DOE, and would manage the procurement of and stationery from all suppliers. The managing agent would also facilitate the

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supply and distribution of the said procured items to the respective Section 20 schools in the province of KwaZulu Natal.

7. Following tender presentations on the 28th of April and 4th May 2005, the tenders in respect of the procurement of textbooks and the procurement of stationery was separated. On 19th May 2005 the tender for textbooks was awarded to EduSolutions, and the tender of stationery under Tender No. 1373E to Indiza-Motswedi, being a joint venture or partnership between Accused 2, Indiza), and Motswedi Outsourcing (Pty) (Ltd) (hereinafter referred to as “Motswedi”).

8. In order to ensure the timeous supply of books and stationery to the schools for the 2006 academic year, it was necessary to expedite the process, and the urgency of the matter caused the DOE to deviate from the prescribed Procurement and Tender processes.

9. The procurement and distribution of stationery in terms of the

LTSM Project was awarded to Indiza-Motswedi was for the total amount of R22 919 399.14, and was to operate for a period of two years.

10. Shortly after the awarding of the said project to Indiza-Motswedi, an appeal was lodged with the Appeals Tribunal by one or more of the unsuccessful bidders, which contested the circumstances under which the project had been awarded to Indiza-Motswedi.

11. On or about the 7th July 2005, and whilst the appeal in respect of the said award was pending, the DOE entered into a written interim agreement referred to as the Service Level Agreement (“the 1st Service Level Agreement”) with Indiza, represented by its sole director Accused 1. The

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agreement was not concluded with the consortium Indiza-Motswedi, which had been the successful tenderer. The said 1st

Service Level Agreement was valid for a period of three (3) months, commencing on the 1st June 2005 and ending on the 1st September 2005.

12. The purpose of entering into the interim service agreement

despite the fact the appeal process had not been duly finalised was because of the need to be able to provide stationery to all Section 20 schools in KZN for the 2006 academic year.

13. In terms of the said agreement, Indiza, as a consultant for the

DOE, would compile a catalogue of stationery, and would facilitate and manage the procurement and the delivery of the same to the relevant Section 20 schools.

14. The 1st interim Service Level Agreement expired on 1 September 2005, and on or about the 2nd September 2005, the DOE and Indiza entered into a further agreement, in terms of which they extended the first Service Level Agreement for a further two months, commencing on the 2nd September 2005 and ending on the 1st November 2005.

15. After the appeal process was finalised in respect of the main tender, the DOE wrote a letter on or about 12 December 2005 to Indiza-Motswedi informing them that they had been officially awarded the aforementioned tender.

16. A second Service Level Agreement was thereafter compiled by the DOE in consultation with Accused 1. The parties who negotiated this Service Level Agreement was the DOE and Accused 2, Indiza. Teboho Benjamin Matsoso (“Matsoso”) the Director of Motswedi, whose

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company together with Indiza was part of the consortium that was awarded the said tender as Indiza- Motswedi, was not consulted in this

regard .

17. The second Service Level Agreement (SLA2) was for the amount of R22 919 399.14, and it was awarded for a period of two years, beginning on the 2nd November 2005 and ending on the 2nd November 2007.

18. Despite rigorous consultation and negotiations on the drafting and wording of the agreement by the DOE and Accused 1 as representative of Accused 2, the said second SLA was only signed by Accused 1 and was never signed by the DOE.

19. Accused 2 continued supplying stationery and accessories to the DOE. Several invoices were issued to the DOE by Indiza in respect of the services it had purportedly rendered.

20. A dispute was declared with the DOE by Motswedi, represented by its Director, Matsoso regarding Indiza’s continued exclusive involvement and participation in the aforementioned LTSM Project. The basis of the dispute was that the LTSM project had been awarded to Indiza-Motswedi, and not Indiza Infrastructure Solutions (Pty) Ltd on its own.

21. With regard to the aforementioned Service Level Agreements, the arrangement between Indiza and the DOE was that Indiza would act as the consultant to procure the required goods or services on behalf of the DOE. Indiza was to be paid a set management fee for the services over the duration of the said contract.

22. On the basis of the aforesaid agreement it was apparent that the DOE had not enlisted Indiza’s services as an ordinary

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supplier of goods in the ordinary course of business, but rather as an agent acting on behalf of the DOE in sourcing and securing the required goods and services from other suppliers. Indiza was entitled to a 100% of the procurement order of stationery/accessories.

23. It was never the intention of the DOE that Indiza would be entitled to inflate the cost of stationery and accessories procured from suppliers and/or manufacturers.

24. The accused knew that he was required to negotiate with suppliers/manufacturers for discounted prices for stationery and accessories, and such discounts were to be declared to the DOE.

25. Indiza was required to compile a catalogue detailing the items of Stationery and a price list of items available from suppliers, which catalogue would be used by the respective schools to order their required stationery.

26. The procedure for the procurement of stationery and accessories that should have been followed can be summarised as follows:

a) Indiza was required to determine the stock requirement of each school by sending out their stationery catalogue and a requisition form to each of the schools; and

b) Indiza would then have to confirm the required quantities, and determine the total stock required, and thereafter place

orders with relevant suppliers; and

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c) the required stationery procured by Indiza would be warehoused and then distributed to the schools according to their orders; and

d) upon invoicing the DOE for the goods supplied, Indiza was required to attach supporting documentation, namely purchase orders, and the suppliers’ invoices for goods supplied, as proof that the aforesaid goods had been ordered, supplied and/or paid for by Indiza; and

e) the DOE was then required to pay to Indiza the actual procurement costs incurred in the procurement of goods as per the supplier’s invoice.

27. It was merely to be paid a management fee in respect of its work done in project management, the distribution of stationery, the creation of the catalogue, and the costs of warehousing. It was further envisaged when Indiza was used as the managing agent in the procurement of stationery it would source and obtain stock at the lowest possible prices. Where discounted prices were to be given due to the large quantities of stationery items purchased, this would be declared to and would be in favour of the DOE.

28. Indiza subsequently used several suppliers in the execution of its mandate in the procurement of stationery from suppliers on behalf of the DOE. The stationery suppliers used by Indiza over the course of the contract with the DOE were: Waltons Stationery Company (Pty) Ltd (hereinafter referred to as Waltons); Silveray Statmark Company (Pty) Ltd (hereinafter referred to as Croxley Stationers); Freedom Stationers (Pty) Ltd (hereinafter referred to as Freedom Stationers);

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Stationery Den (Pty) Ltd (hereinafter referred to as Stationery Den);

Power Stationery (Pty) Ltd (hereinafter referred to as Power Stationery;

Mega Stationers (Pty) Ltd (hereinafter referred to as Mega); Palm Stationers (Pty) Ltd (hereinafter referred to as Palm

Stationers); Afropulse (Pty) Ltd (hereinafter referred to as Afropulse); Afsana Trading CC (hereinafter referred to as Maters Print); Mandla Stationery CC ( hereinafter referred to as Mandla); First Art Printers CC (hereinafter referred to as Art Printers); Apex Pencils SA CC (hereinafter referred to as Apex ;) Pala Printers CC (hereinafter referred to as Pala) Sfiso Printing (hereinafter referred to as Sfiso); and African Spirit Trading 268 (Pty) Ltd (hereinafter referred to as

African Spirit).

29. African Spirit was a company created by Accused 1, who was the managing director. It served as a supplier of stationery to Indiza at marked up and inflated prices, which in turn supplied stationery to the DOE.

31. During the period of July 2005 to January 2007, Indiza invoiced the DOE an amount of R479 290 587. 97 for services rendered. The said amount included the costs for supply chain management. Indiza had paid the DOE an amount of R30 000 000.00 allegedly given as discounts by suppliers. The invoices to the DOE were for the following goods and/or services and amounts:

1. Procurement of stationery: R373 010 587.489

2. Project Management: R64 448 337.613. Warehousing and Distribution R31 349 532.084. Printing and Catalogue: R5 442 021.805. Additional Work: R4 536 399.95TOTAL: R 478 786 878.92(VAT

inclusive)

24. NOW THEREFORE THE ACCUSED ARE GUILTY OF COMMITTING THE FOLLOWING OFFENCES

COUNT 1 – Fraud – Accused 1 and 2 only

THAT the said accused are guilty of the crime of FRAUD, read with Sections 99, 103 and 332 of the Criminal Procedure Act No. 51 of 1977 and 51(2)(a) of the General Law Amendment Act No. 105 of 1997.

In that during or about the period 2005 to 2006 at or near Pietermaritzburg in the jurisdiction of KwaZulu Natal High Court, Pietermaritzburg the accused did unlawfully and with the intent to defraud give out and misrepresent to the DOE, KZN and/or its representatives and/or Waltons and/or Croxley Stationers and/or Freedom Stationers and/or Stationery Den and/or Power Stationers to their prejudice and/or potential prejudice that:i) Invoice No. 011 dated 9 September 2005 for an amount of R

114 543 298. 00 was a legitimate invoice and had correct purchase orders from

the respective supplier companies attached thereto; and/or

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ii) The accused had placed a purchase order WAL003/1005 with the supplier, Waltons, in the amount of R 14 768 148.31 and were entitled to invoice the DOE for payment under purchase order no.WAL003/1005; and/or

iii) The accused had placed a purchase order with the supplier, Croxley Stationers and were entitled to invoice the DOE an amount of R 5 869 007. 88 for payment under the said purchase order; and/or

iv) The accused had placed a purchase order FREE001/10-05 with supplier, Freedom Stationers, for an amount of R 60 956 943. 51 and were entitled to invoice the DOE for payment under purchase order no. FREE001/10-05; and/or

v) The accused had placed a purchase order DEN001/10-05 with the supplier, Stationery Den, for an amount of R 13 399 081.79 and were entitled to invoice the DOE under purchase order no. DEN001/10-05 and/or

vi) The accused had placed a purchase order POW001/10-05 with the supplier, Power Stationers, in an amount of R 5 483 395.70 and were entitled to invoice the DOE under purchase order no. POW001/10-05;

AND did thereby by means of the said false pretences induce the DOE and/or its representatives to accept and/or believe that:

i) Invoice No. 011 and the supporting purchase orders were correct; and/or

ii) The quantities of goods reflected in the purchase orders were true and correct; and/or

iii) The stock codes listed on the items procured were correct and corresponded with that of the supplier companies, and/or

iv) Purchase order WAL001/10-05 had been placed with Waltons Stationers for an amount of R 14768148.31 , and/or

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v) A purchase order had been placed with Croxley Stationers for an amount of R 5 869 007. 88, and/or

vi) Purchase order FREE001/10-05 had been placed with Freedom Stationers for an amount of R 60 956 943. 51, and/or

vii) Purchase order DEN001/10-05 had been placed with Stationery Den for an amount of R 13 399 081.79, and/or

viii) Purchase order POW001/10-05 had been placed with Power Stationers for an amount of R 5 483 395.70

AND did therefore induce the DOE and/or its representatives to pay over to the accused the amount of R 114 543 298.00

WHEREAS in truth and in fact, when the accused presented Invoice No. 011 for payment to the DOE they well knew that:

AD WALTONS STATIONERS;

i) Invoice no. 011 was false, fictitious and fabricated; and/orii) The accused had not incurred a total cost of R 14 768 148.31 for the purchase of the stationery supplied; and/oriii) The purchase order with no. WAL003/1005 purportedly for goods purchased from Waltons was false; and/oriv) The accused had only conducted business with Walton’s for an

amount of R 1 782 681.98 in total for the procurement of stationery, which amount was paid to Waltons.

A D CROXLEY

i) Invoice no. 011 was false, fictitious and fabricated; and/orii) The accused had not placed an order of R 5 869 007. 88 for the

purchase of the stationery; and/oriii) The purchase order attached to invoice no. 011 purportedly for

goods purchased from Croxley Stationers was false, and/or12

iv) The accused had only conducted business with Croxley Stationers for an amount of R 3 543 125.74 in total, which amount was paid to Croxley Stationers and/or

v) The transaction represented in the supporting documents presented to the DOE for payment with Invoice 011 did not correspond to other purchase orders of Croxley Stationers; and/or

vi) Some of the items listed in the said purchase order were not stocked by Croxley, and/or

vii) The quantities listed in the purchase order were overstated

AD FREEDOM STATIONERS

i) Invoice no. 011 and the supporting documents attached to it was false, fictitious and fabricated; and/orii) The accused had not placed a purchase order of R 60 956

943. 51 for the order of the stationery ; and/oriii) The purchase order attached to invoice no. 011 purportedly for goods ordered from Freedom Stationers under purchase order no. FREE001/10-05 in an amount of R 60 956 943. 51 was false, and/oriv) Freedom Stationers had only conducted business with and

invoiced the accused in an amount of R 6 730 880.09 in total, which amount was paid to Freedom Stationers.

AD STATIONERY DEN

i) invoice no. 011 and the supporting documents attached to was false, fictitious and fabricated; and/or

ii) The accused had not placed a purchase order of R 13 399 081,79 for the order of the stationery ; and/or

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iii) The purchase order with no. DEN001/10-05 attached to invoice no. 011 for the purchase of stationery purportedly from the supplier, Stationery Den, in an amount of R 13 399 081.79 was false, and/or

iv) Stationery Den had only supplied quotations to the accused in respect of the cost of some items of stationery.

AD POWER STATIONERS

i) Invoice no. 011 and the supporting documents attached thereto was false, fictitious and fabricated; and/or

ii) The accused had not placed a purchase order of R 5 483 395.70 for the order of the stationery; and/or

iii) The purchase order with no. POW001/10-05 attached to invoice no. 011 purportedly for the purchase of goods supplied from Power Stationers in the amount of R 5 483 395.70 is false, and/or

iv) Power Stationers had conducted business with the accused in total for an amount of R 2 540 644.70, which amount was paid to Power Stationers.

AND the accused did thereby commit the crime of Fraud in the amount of R 114 543 298.00.

COUNT 2: Forgery - Accused 1 and 2

In that during the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with intent to defraud, create, or cause to be created, a falsified document that purported to be a purchase order for stationery valued at R 14 768 148. 31 from

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Waltons, bearing reference number WAL003/1005 to the prejudice or potential prejudice of the DOE and/or Waltons

And

COUNT 3: Uttering a forged instrument – Accused 1 and 2

In that during or about the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and intentionally offer, utter and pass off a false document, to wit a document purporting to be Waltons purchase order number WAL003/1005 to the value of R 14 768 148.31 to wit by presenting it as an attachment to invoice 011 to the DOE for payment, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

COUNT 4 : Forgery – Accused 1 and 2

In that during the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with intent to defraud, create, or cause to be created, a falsified document that purported to be a purchase order for stationery valued at R5 869 007.88 from Croxley Stationers, to the prejudice or potential prejudice of the DOE and/or Croxley Stationers

and

COUNT 5 : Uttering a forged instrument – Accused 1 and 2 15

In that during or about the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg , the accused did unlawfully and intentionally offer, utter and pass off a falsified document, to wit a document purporting to be Croxley Stationers purchase order to the value of R5 869 007.88 , to wit by presenting it as an attachment to invoice 011 to the DOE for payment, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

COUNT 6 : Forgery - Accused 1 and 2

In that during the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with intent to defraud, created, or caused to be created, a falsified document that purported to be a purchase order for stationery valued at R60 956 943.51 from Freedom Stationers, bearing reference number FREE001/1005, to the prejudice or potential prejudice of the DOE and/or Freedom Stationers

and

COUNT 7: Uttering a forged instrument – Accused 1 and 2 In that during or about the period 2005 and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg , the accused did unlawfully and intentionally offer, utter and pass off a falsified document, to wit a document purporting to be a Freedom Stationers purchase order with order number FREE001/10-05 to the value of R R60 956 943.51, to wit by presenting it as an attachment to invoice 011 to the DOE for payment, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

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COUNT 8: Forgery – Accused 1 and 2 In that during the period 2005 and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with intent to defraud, created, or caused to be created, a falsified document that purported to be a purchase order for stationery valued at R13 399 081.79 from Stationery Den, bearing reference number DEN001/10-05, to the prejudice or potential prejudice of the DOE and/or Stationery Den

and

COUNT 9 : Uttering a forged instrument – Accused 1 and 2

In that during or about the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg , the accused did unlawfully and intentionally offer, utter and pass off a falsified document, to wit a document purporting to be Stationery Den purchase order number DEN001/10-05 to the value of R R13 399 081.79, to wit by presenting it as an attachment to invoice 011 to the DOE for payment, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

COUNT 10 : Forgery – Accused 1 and 2

In that during the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with intent to defraud, created, or caused to be created, a falsified document that purported to be a purchase order for stationery valued at R 5 483 395.70 from Power

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Stationers, bearing reference number POW001/10/05, to the prejudice or potential prejudice of the DOE and/or Power Stationers

and

COUNT 11: Uttering a forged instrument – Accused 1 and 2 In that during or about the period 2005, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and intentionally offer, utter and pass off a falsified document, to wit a document purporting to be Power Stationers purchase order number POW001/10/05 to the value of R5 483 395.70, to wit: by presenting it as an attachment to invoice 011 to the DOE for payment, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

COUNT 12: FRAUD – ACCUSED 1 AND 2 :

THAT the accused are guilty of the crime of FRAUD, read with Sections 99;103 and 332 of the Criminal Procedure Act No. 51 of 1977 and 51(2)(a) of the General Law Amendment Act No. 105 of 1997.

In that during or about the period 2006 to 2007 and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg the accused did unlawfully and with the intent to defraud, give out and misrepresent to the DOE, KZN and/or its representatives and/or Palm Stationers to their prejudice and/or potential prejudice that:

i) Invoice No. 2007/004 was correct and legitimate; and/or

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ii) Indiza had purchased stationery from Palm Stationers in the amount of R19 051 539.43 under invoice no. 23549; and/or

iii) Indiza had purchased stationery from African Spirit in the amount of R 20 692 813.72 under invoice no. AS00345; and/or

iv) DOE owed Indiza R 39 744 353.14.

AND did thereby by means of the said false pretences induce the DOE and/or its representatives to accept and/or believe to its/their prejudice and/or potential prejudice that:

i) Invoice No. 2007/004 and its supporting documents for the payment for the procurement of stationery was correct and legitimate; and/orii) Invoice No.2007/004 correctly reflected the actual costs incurred by the accused in the procurement of stationery from the said suppliers; and/oriii) The supporting invoice from Palm Stationers with invoice no. 23549 in the amount of R R19 051 539.43 was correct and in respect of goods procured from Palm Stationers, and/or

iv) The supporting invoice with no. AS00345 in the amount of R20 692 813.72 was correct and for stationery procured from African Spirit, and/or

v) That there was no mark up on the stationery purchased from the original suppliers by the accused to the price charged to the DOE,

AND did thereby induce the DOE and/or its representatives to pay over to the accused the amount of R 39 744 353.14

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WHEREAS in truth and in fact, when Invoice No. 2007/004 was presented for payment to the DOE the accused well knew that:

A. In respect of the Supporting Invoice No. 23549 from Palm Stationers :

i) It was a fictitious, forged and illegitimate invoice, and/orii) The said invoice had been created and/or fabricated by

and/or on behalf of the accused on a forged letterhead purporting to be that of Palm Stationers; and/or

iii) The items as described therein had not been purchased from Palm Stationers on 22 August 2006;

B. In respect of the Supporting Invoice No. AS00345 in the name of African Spirit:

i) Accused 1 registered a company called African Spirit and was its managing director; and/or

ii) African Spirit was created to procure stationery and accessories which it then sold to Accused 2 at a mark-up, and/or

iii) African Spirit did not have its own stock codes and descriptions but used Indiza’s catalogue prices when invoicing the DOE; and /or

iv) It was a fictitious invoice; and/orv) The said invoice included items purchased from other

supply companies as well, and/orvi) The invoice was created to reflect the quantity of items

required as per the Bill of Quantities received from the schools which had ordered the items of stationery, and/or

vii) Items reflected on the said invoice included items supplied by Palm Stationers, which were not reflected on Palm’s supporting invoice with no. 23549; and/or

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AND the accused did thereby commit the crime of Fraud.

COUNT 13 - Forgery: Accused 1 and 2

In that during the period 2006, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with intent to defraud, created, or caused to be created, a falsified document that purported to be an invoice for stationery from Palm Stationers, bearing reference number 23549, to the prejudice or potential prejudice of the DOE and/or Palm Stationers

and

COUNT 14 - Uttering a forged instrument: Accused 1 and 2

In that during or about the period 2006, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg the accused did unlawfully and intentionally offer, utter and pass off a falsified document, to wit a document purporting to be Palm Stationers invoice number 23549, to wit by presenting it to the DOE, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

COUNT 15 - Fraud: Accused 1 and 2

THAT the accused are guilty of the crime of FRAUD, read with Sections 99; 103 and 332 of the Criminal Procedure Act No. 51 of

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1977 and 51(2)(a) of the General Law Amendment Act No. 105 of 1997.

In that during or about the period 2006 and 2007 and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and with the intent to defraud did give out and misrepresent to the DOE, KZN and/or its representatives to its prejudice and/or potential prejudice that:

i) Invoice No. 2007/009 was correct and legitimate; and/or

ii) Indiza had purchased stationery from Palm Stationers in the amount of R 41 692 663.63 under invoice no. 23625; and/or

iii) Indiza had purchased stationery from African Spirit in the amount of R 39 309 890.01 under invoice no. AS00350; and/or

iv) The DOE owed Indiza R81 002 553.64 for its purchase of stationery and/or accessories,

AND did thereby by means of the said misrepresentation induce the DOE and/or its representatives to accept and believe that:

i) Invoice No. 2007/009 and its supporting documents for the payment for the procurement of stationery was correct and legitimate; and/or

ii) Invoice No.2007/009 correctly reflected the actual costs incurred by the accused in the procurement of stationery from the said suppliers; and/or

iii) The supporting invoice from Palm Stationers with invoice no. 23625 in the amount of R 41 692 663.63 was correct and in respect of goods procured from Palm Stationers, and/or

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iv) The supporting invoice AS00350 in the amount of R 39 309 890.01 was correct and for stationery procured from African Spirits, and/or

v) To induce the DOE to pay Indiza R 81 002 553.64,

WHEREAS in truth and in fact when the accused made such misrepresentations they well knew that:

A. In respect of the Supporting Invoice No. 23625 from Palm Stationers:

i) The invoice was a forgery and did not emanate from Palm Stationers, but had been created by and/or on behalf of the accused; and/or

ii) The order amount was falsified and was not supplied and/or invoiced by Palm Stationers as reflected; and/or

iii) The quantities of goods reflected as purchased was falsified to tally with the Bill of Quantities in respect of the school stationery orders, and/or

B. In respect of the Supporting Invoice No. AS00350 in the name of African Spirit:

i) Accused 1 registered a company called African Spirit and was its managing director; and/or

ii) African Spirit was created to procure stationery and accessories which it then sold to Accused 2 at a mark-up, and/or

iii) African Spirit did not have its own stock codes and descriptions but used Indiza’s catalogue prices when invoicing the DOE; and /or

iv) It was a fictitious invoice; and/orvi) The said invoice included items purchased from other

supply companies as well, and/or

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vii) The invoice was created to reflect the quantity of items required as per their Bill of Quantities, and/or

viii) Items reflected on the said invoice included items supplied by Palm Stationers, which were not reflected on Palm’s supporting invoices.

AND the accused did thereby commit the crime of Fraud.

COUNT 16 - Forgery: Accused 1 and 2

In that during the period 2006 and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg the accused did unlawfully, falsely and with the intent thereby to defraud and to the prejudice or potential prejudice of the DOE and/or Palm Stationers forge an instrument in writing, to wit, a Palm Stationers invoice with No. 23625.

and

COUNT 17 - Uttering a forged instrument: Accused 1 and 2

In that during or about the period 2006, and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg, the accused did unlawfully and intentionally offer, utter and pass off a falsified document, to wit a document purporting to be Palm Stationers invoice number 23625 to wit by presenting it to the DOE, to the prejudice or potential prejudice of the DOE, while knowing it to be forged.

COUNT 18 - Fraud: Accused 1 and 2

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THAT the accused are guilty of the crime of FRAUD, read with Sections 99, 103 and 332 of the Criminal Procedure Act No. 51 of 1977 and 51(2) (a) of the General Law Amendment Act No. 105 of 1997

In that during or about the period 2005 to 2007 and at or near Pietermaritzburg in the jurisdiction of the KwaZulu Natal High Court, Pietermaritzburg the accused did unlawfully and with the intent to defraud give out and misrepresent to the DOE, KZN and/or its representatives to its prejudice and/or potential prejudice that:

i) On the dates listed in column 1 of Annexure A Indiza had placed a purchase order alternatively purchased stationery; and/or

ii) Indiza had paid for the stationery in the amounts listed in column 3 of Annexure A; and/oriii) The amounts listed in column 3 of Annexure A is the amount exclusive of VAT and owing to Indiza; and/oriv) The VAT charged is listed in column 5 of Annexure A,

AND the accused did thereby by means of the said misrepresentation induce the DOE and/or its representatives to accept and believe that:

i) On the dates listed in column 1 of Annexure A Indiza had placed a purchase order alternatively purchased

stationery; and/orii) Indiza had paid for the stationery in the amounts listed in column 3 of Annexure A; and/oriii) The amounts listed in column 3 of Annexure A is the amount exclusive of VAT and owing to Indiza; and/oriv) The VAT charged is the amounts listed in column 5 of Annexure A,

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WHEREAS in truth and in fact when the accused made such representation they well knew that: i) They had procured stationery from the suppliers as mentioned in Column 1 of Annexure B for the amounts as listed in Column 2 of Annexure B, and/or

ii) The suppliers mentioned in Column 1 of annexure B had passed credit notes as listed in Column 3 of Annexure B, and/or

iii) The net amount owing to the suppliers mentioned in Column 1 of Annexure B were the amounts as reflected in Column 4 of Annexure B, and/oriv) The accused had further procured stationery for an amount of R 1 115 875.22 which had been paid to further suppliers of the accused, namely: Apex; Art Printers Sfiso Printing and Pala Printers, and/orv) The accused had paid the DOE an amount of R 30 000 000.

00 allegedly given as discounts by suppliers, and/orvi) An amount of R 12 685 000.00 was paid by Indiza to African

Spirit; and/orvii) The accused therefore well knew that they were only entitled to charge the DOE an amount of R 145 975 616.13 in total for the procurement of stationery and not a total of R 373 010 587.48 as listed in Column 3 of Annexure A

AND the accused did thereby commit the crime of Fraud in the amount of R 197 466 837.08.

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ANNEXURE AColumn 1 Column 2 Column 3 Column 4 Column 5

Invoice Date Invoice NumberAmount requested by accused to the DOE for the Procurement of Stationery

Amount VAT exclusive

Vat

2005/09/09 011 R 114,543,298.00 R 100,476,577.19 R 14,066,720.812005/10/05 010 R 84,103.50 R 73,775.00 R 10,328.502005/11/01 015 R 538,917.90 R 472,735.00 R 66,182.902005/11/11 016 R 57,145,604.92 R 50,127,723.61 R 7,017,881.312006/02/10 018 R 29,015,771.66 R 25,452,431.28 R 3,563,340.382006/02/10 019 R 17,740,056.82 R 15,561,453.35 R 2,178,603.472006/03/20 024 R 24,303,927.90 R 21,319,235.00 R 2,984,692.902006/03/31 025 R 8,892,000.00 R 7,800,000.00 R 1,092,000.002006/08/28 2007/004 R 39,744,353.14 R 34,863,467.67 R 4,880,885.472006/10/24 2007/009 R 81,002,553.64 R 71,054,871.61 R 9,947,682.03Total   R 373,010,587.48 R 327,202,269.71 R 45,808,317.76

ANNEXURE BCOLUMN 1

COLUMN 2

COLUMN 3

COLUMN 4

COLUMN 5

Supplier Amount Invoiced Credit Note Net Amount Invoiced

Amounts paid by Indiza

Palm Stationery R80 279 668.40 R1 870231.76 R78 409 436.38 R79 287 558.41Mega Papers R31 042 677.62 R119 850.48 R30 922827.14 R22 335 585.26

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Freedom R7 137 450.75 R0.00 R7 137 450.75 R6 730 880.09 Waltons R3 974 250.16 R643 114.52 R3 331 135.64 R1 782 681.98Croxley R3 582 538.72 R27 086.40 R3 555 452.23 R3 543 125.74Power Stationery R2 540 644.81 R0.00 R2 540 644.81 R2 540 644.81Mandla R2 490 836.55 R0.00 R2 490 836.55 R2 2 486 846.56Afropulse R1 720 862.26 R0.00 R1 720 862.26 R1 720 862.26 Maters Print R1 634 229.28 R0.00 R1 634 229.28 R1 188 198.67TOTAL R134403158.29 R26

60283.16R131742875.13 R121616383.78

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IN THE KWAZULU NATAL HIGH COURT, PIETERMARITZBURGREPUBLIC OF SOUTH AFRICA

THE STATE

versus

ZAKHELE INNOCENT JABULANI MABASO ACCUSED 1INDIZA INFRASTRUCTURE SOLUTIONS (PTY) LTD ACCUSED 2 as represented by Zakhele Jabulani MabasoPAMELA ZULU (née Bosman) ACCUSED 3

LIST OF WITNESSES

1. Dr Reginald Lubisi Department of Education – KZN247 Burger StreetPietermaritzburg3201

2. Neliziwe Ntuli - do -

3. Hlengiwe Mcuma - do –

4. Shanthi Maharaj - do –

5. Maria M.L.S. Mkhize - do –

6. Fusi Ephraim Radebe - do –

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7. Hlengiwe Wildah Dlomo - do –

8. Bongani T.P. Shezi - do –

9. Dr Simon Mbokazi - do –

10. Mandla Wiseman Ndlela - do –

11. Thabiso Conrad Makhaga - do –

12. Ursulene Beverley Pillay - do –

13. Philile A.Z. Mthabela (nee Mncube) - do -

14. Jeremy Perks 16 Lynn AvenueGlensashleyDurban North

15. Esau Abel Zulu Section H2 House No. 2507Khaselina StreetEsikhawini

16. Fikezweni Cecil Mavuso Department of EducationEastern Cape

17. Deon S.C. Dhlomo Kwande Consulting (Pty) Ltd465 Summit Road Motswedi HouseMorningsideGauteng

18. Mduduzi Christopher Nkomo Mdu Mkomo & Co.Suite 501 5th Floor397 Smith StreetDurban

19. Tebogo Benjamin Matsoso Motswedi Outsourcing (Pty) Ltd

204 Rivonia RoadMorningside Gauteng

20. Gillian Broughton

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21. Paul Spencer P Squared Eland HouseThe Braes

Cnr. William Nichol & Bryanston Gauteng

22. Paul de Villiers P SquaredEland HouseThe BraesCnr. William Nichol &

BryanstonGauteng

23. Gavin Toet Conduit Capital Ltd360 Oak AvenueRandburgGauteng

24. Barry Malcom Musgrave H & M Stationers CC(t/a The Stationery Den)387 Ontdekker RoadFlorida ParkGauteng

25. Nkosinathi F.B. Ndlovu Thamela Technologies Jones RoadGauteng

26. Narendra K.Pattundeen Palm Stationery Manufacturers

(Pty) Ltd166 Aberdare DrivePhoenix Industrial ParkDurban

27. Robert Oliver Grieveson Waltons Stationery Co. (Pty) Ltd

17 Watford RoadCongellaDurban

28. Hassina Banu Yunus Silveray Statmark Co. (Pty) Ltd

(aka Croxley)

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70 Richard Carte RoadMobeniDurban

29. Hamza Yacoob Cassim Freedom Stationery (Pty) Ltd7 Orange StreetIsithebe

30. Anesh Harilall Afropulse 46 (Pty) Ltd(t/a Power Stationery)3 – 5 Eagle RoadVerulam

31. Vishal Devraj Seebran Mega Papers (Pty) Ltd13 Eagle RoadMissionlandsVerulam

32. Gonasagri Dhavaraj Afsana Trading CC(t/a Maters Print)50 Aberdare DrivePhoenix Industrial ParkDurban

33. Ebrahim Desai 18 Rattray PlaceSherwoodDurban

34. Naval Maneck Randeria United Shipping CC45 Henwood RoadMorningsideDurban

35. Pradip Laxman Popat SAB&T Chartered Accountants 15 Garth RoadMayvilleDurban

36. Vrajlal Soni Palo Printers Unit D2 Pinemedia Industrial Park47 Gillits RoadWestmead

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Pinetown

37. Jairajh Dookoo Art Printers 73 Beatrice StreetDurban

38. Larry Katz Apex Pencils (t/a Apexrolfes)20 – 22 High StreetModderfontein Gauteng

39. Sifiso Justice Ndluli Sfiso Investments CC127 Johannes Nkosi Street (Alice Street)Durban

40. Camilla Singh KPMG20 Kingsmead BoulevardMarriot BuildingKingsmead Park OfficeDurban

41. Stephanie Perumal KPMG20 Kingsmead BoulevardMarriot BuildingKingsmead Park OfficeDurban

42. Gregory de Beer Special Investigation UnitUnit 3 & 4 Bishop’s CourtCnr. Warrior and DelmoreHillcrest

43. Antoinette Jordan SARS209 Pietermaritz StreetPietermaritzburg

44. Michelle Ruth Morgan Morestat Corporate Services6 Cosmos StreetPrimroseGermiston, Gauteng

33

45. Colleen Lahner New Era Life Insurance Co. (Pty) Ltd2nd Floor, Block ESandhurst Office ParkSantdonGauteng

46. Sibongiseni Antony Ngundze Nedbank135 Rivonia RoadSandton Gauteng

47. Jabulani Cyprian Mtshali Bowman Gilfillan165 West StreetSandtonGauteng

48. Nonhanhla Ruth Gumbi Faskor (Pty) LtdJohn Ross StreetRichards Bay

49. Krumchand Hariparshad New Era Life Insurance Co. (Pty) Ltd2nd Floor, Block ESandhurst Office ParkSandtonGauteng

50. Chiman Vallabh Patel Gobodo Inc. 1st Floor, Block BEmpire Park55 Empire RoadParktownGauteng

51. Gugulethu Oscar Madlanga Ngcebetsha Madlanga Inc. Attorneys4th Floor, South TowerNelson Mandela SquareCnr. 5th & Maude StreetsSandtonGauteng

34

52. Vuyiwe V.F. Mpepo 580 Nu 13Mdantsane TownshipEast London

53. Jean Faber Mercedes BenzCnr. South & Rivonia StreetsSandtonGauteng

54. Phaswana Stephen Ratlou Limpopo Economic Development

Enterprise Board (LIMDEV)Primemedia HouseConstantia Office Park14th Avenue & Henry

PotgieterGauteng

55. Herman Kotze Net 14th Floor, President PlaceRosebankGauteng

56. Christa Klokow Companies and Intellectual Property Registration Office (CIPRO)77 Meintjies StreetSunnysidePretoria

57. Anna Sophia Mentz Companies and Intellectual

Property Registration Office (CIPRO)77 Meintjies StreetSunnyside

58. Tina Rabilall Companies and Intellectual Property Registration Office (CIPRO)77 Meintjies StreetSunnyside

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59. Alan Robert Nixon Ex- Directorate of Special Operations88 Field StreetDurban

60. Lionel John Groenewald Ex- Directorate of Special Operations88 Field StreetDurban

61. Sen. Supt. Kubentheran Naidoo South African Police Services

Durban Central Police Station

Durban

62. Insp. Innocent Bongumusa Zondi South African Police Services

Durban Central Police Station

Durban

63. Sen. Supt. Babitha J. Mannie South African Police ServicesDurban Central Police

StationDurban

64. Capt. Xolani Brian Ngidi South African Police ServicesDurban Central Police

StationDurban

65. Supt. Nonkululeko Jules Jwara South African Police ServicesDurban Central Police

StationDurban

66. Lushen Pillay Special Investigation UnitUnit 3 & 4 Bishop’s CourtCnr. Warrior and DelmoreHillcrest

67. Sen. Supt. April Mahlangu South African Police Services

Head OfficePretoria

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68. Sen.Supt. Seabe Makhuza South African Police ServicesHead OfficePretoria

69. Supt. Kamantha Mudaly South African Police ServicesDurban Central Police

StationDurban

70. Moganambal Naidu MK Bobby Naidu Travel

Agency71 Beatrice Street

Durban

71. Themba Ndlovu EdusloutionsUmhlanga Rocks

72. Kesagie Dhanraj ABSA16A Central Avenue 4th FloorKempton ParkGauteng

73. Bruce Geithrie Standard BankPinetown

74. Nayeema Ahmed Standard Bank Pietermaritzburg

75. Suffia Hassen FNBBoom Street

76. Diena Dawood Standard BankGreyville

77. Kerry Thompson ABSA

78. Songuta El Idris Mxedlana Ithala BankUmlazi

79. Janita M. Snell Investec Bank

80. Rosalind Daniels ABSA

37

Gale StreetDurban

81. Bramini Chetty Nedbank (Forensic Services Division)

82. Adele Potgieter ABSA BankKempton ParkGauteng

38