NPA secures R32m preservation order in ongoing asbestos case

The Free State High Court has granted the NPA a R32 million preservation order against Ace Magashule and others linked to the asbestos corruption and money laundering scheme.

Included in the court order is a luxury Mercedes-Benz G63 AMG, allegedly purchased in cash for R2 million - a symbol of the lavish lifestyle funded by illicit gains.

According to the NPA, the seized assets are believed to be the proceeds of a web of criminal activities, including theft, fraud, corruption, and money laundering, orchestrated at the expense of the Free State Department of Human Settlements (FSDHS).

“The involved individuals, companies, and trusts are alleged to have engaged in a complex web of financial flows, designed to strip the FSDHS of its much-needed resources," said NPA national spokesperson Mthunzi Mhaga. 

“They were allegedly able to move the proceeds of crime through attorneys, real estate agencies, and high-end motor dealers.” 

The Asset Forfeiture Unit (AFU) has shown through financial flows that these properties were purchased with monies siphoned from the FSDHS, the statement read.

"This preservation order follows a Restraint Order of R300 million granted to the unit by the High Court in September 2020. This was in respect of the same asbestos corruption and money laundering scheme.

"The order will effectively put a freeze on and thwart any efforts to dissipate the very assets sought to be preserved."

The NPA said this will provide for the subsequent forfeiture of these proceeds of crime to the state.

Meanwhile, the NPA confirmed that various persons and entities are also criminally charged with multiple charges of fraud, theft, money laundering, corruption, contraventions of the PFMA, and contraventions of various sections of the Asbestos Regulations.

Last month, businessman Edwin Sodi pleaded not guilty to charges of money laundering, fraud, and corruption in connection with the controversial R255 million Free State asbestos removal tender.

Sodi, alongside former Free State Premier Magashule, are accused of orchestrating a scheme that diverted public funds intended for the removal of hazardous asbestos from homes in the province's poorest communities.​

The case, which has drawn significant national attention, involves 18 accused individuals and five companies. 

The R255 million contract was awarded in 2014 to a joint venture between Sodi’s Blackhead Consulting and Diamond Hill Trading, owned by the late businessman Igo Mpambani. The State alleges that the contract was irregularly awarded, with kickbacks provided to some of the accused. Instead of effectively removing asbestos from about 30 000 homes, only R21 million worth of work was reportedly completed, with the remainder of the funds allegedly misappropriated. 

Both Magashule and Sodi have previously attempted to have the charges against them dismissed. In May 2023, the Supreme Court of Appeals dismissed their applications, stating that they had "no reasonable prospects of success" and that there was no compelling reason to hear their appeals.

Cape Times