Tenders, Corruption and Murder
- Port Elizabeth building contractor Soonthra Chetty, 65, was murdered in September 2015 by an alleged disgruntled former employee
- His company, which focused on low cost housing, run into financial trouble due to corruption at the Nelson Mandela Bay Metropolitan Municipality
- Chetty’s work with the Municipality mainly involved completing public projects that had been abandoned by contracted companies. But, powerful shadowy figures hatched a plot to divert monies owed to him into the bank accounts of ‘ghost’ service providers
- Promises to investigate the Municipality’s tendering process and the behavior of one architect, as well as a complaint he launched with the Public Protector came to naught
- The latest local government audit says Nelson Mandela Bay Metropolitan Municipality had the highest fruitless and wasteful expenditure for the financial year 2014-15, at R423 million.
In September 2015, three alleged former employees walked into the Port Elizabeth offices of Soonthra ‘Samoo’ Chetty and fatally stabbed and pushed him to a lower floor of the multi-storeyed building. Also seriously injured during the attack was his nephew. Chetty was an intelligent and hardworking family man.
In the windy city, ‘Samoo’ (as he was popularly known) was the building contractor often called upon to fix the mess made by other contractors. Samoo knew his stuff, as evident from the number of contracts his company, Metro Building & Civil Contractors cc, had handled. When he was murdered, not even the police detective could link the gruesome act to various cases of corruption that have dogged Nelson Mandela Bay Metropolitan Municipality. The fact is, Samoo’s untimely death had everything to do with his personal crusade against graft.
Going by the latest Auditor-General’s local government audit, Nelson Mandela Bay Metro is officially the ‘corruption capital’ of South Africa – for the 2014/15 financial year, the Municipality had the highest fruitless and wasteful expenditure, at R423 million. In this city everything goes. Take the cases of the municipality leasing spaces it doesn’t need from politically connected individuals. There are also crafty businessmen who take ownership of heritage buildings with the sole intention of demolishing them for profit.
For residents, the scheme that ended the life of the 65-year old Samoo took graft to new heights in the province.
It became the norm for Samoo’s Metro Building & Civil Contractors to be belatedly contracted to complete works other contractors abandoned for whatever reasons. But, the contracting authorities would on many occasions corruptly make payments to wrong entities. It is indeed surprising that the company Samoo founded in 1989 remained in operation. Like most hard-working individuals, the only thing that he had going for him was the hope that the light at the end of the tunnel was not of an on-coming train, unfortunately for him and those who loved him, he was dead wrong.
Samoo’s passion was building housing, especially for the poor. From evidence these journalists have gathered, he believed in doing the right thing at whatever cost.
When he found himself overstretched with administrative aspects of the business, on February 19, 2004, he surrendered the paper bits of his company to his brother Lingam Chetty who became the sole member of the close corporation.
He soon discovered that surrendering the paper ownership to his brother couldn't free him after all. He still had to be involved in the daily operational and administrative side of the business.
When he was stabbed to death at his Sidwell offices, a local newspaper reported that his murder was due to a row with his former employee. That could have been true, but our investigations established it was more to do with corruption and his decision to fight the vice.
Workers (former or current) have rights, but those rights do not include stabbing their employers to death. In the days before his stabbing, Samoo had been struggling to pay his workers. He was forced to borrow money from his family (wife and daughters), a very difficult task for someone who had previously been the all-round pillar for his family.
As we can reveal, this struggle was not of his own making but a consequence of improper acts by public officials who had allowed funds meant for the works his company had done to be diverted to ghost service providers.
We shall start with a project identified by these journalists as Motherwell Tjoks Phase 2 (Contract No. 2943). Amongst the construction works he was called to mop-up, Motherwell Tjoks had the least financial value, at R 1,13 million. The contract was initially awarded to a company called Abamelwane Contractors.
To avoid going into breach, Abamelwane signed off the remainder of the contracted work on the project to Samoo’s company and an ‘Agreement of Cession’ was duly signed on March 19, 2010. This agreement was submitted and accepted by the Nelson Mandela Bay Metropolitan Municipality.
As he proceeded with the work, the Municipality initially paid for every Certified Invoice that his company presented, with the first being an amount of R306,462.12 on October 14, 2010 and the last the amount of R162,957 paid on September 15, 2014, which brought the total paid to R870,312.36.
As Samoo was demanding the payment of the balance that would have gone a long away in settling his fast-mounting debts, he discovered that on December 8, 2011, R208,104.64 was paid to an entity identified as ‘Nombrity Trading Enterprise cc’ for the same work that his company had undertaken.
When he didn't get a reasonable explanation from the municipality, he reported the matter to the Provincial Office of the Public Protector with no results.
But there was still confusion about the exact amounts allegedly paid to Nombrity. According to records and statements made available to these journalists, only R188,608.16 of the 208,104.64 was received by the company from Nelson Mandela Bay Metropolitan Municipality. Who pocketed the rest, and why were funds meant for Samoo’s company diverted to a ghost service provider anyway?
CLICK HERE for Samoo's submission to the Public Protector.
Samoo soon discovered that there is nothing like ‘good faith’ when dealing with improper public officials. Believing naively that he had struck a great working relationship with the Municipal officials for the good of communities in the greater Metropolitan, he once again obliged when his company was asked to complete yet another ‘abandoned’ project.
The project known as Motherwell Thusong Service Centre, [Contract No. 2450] was a service delivery hub intended to take services closer to the residents of Motherwell Town. By 2014, the cost of the project, which was initially valued at R35.14 million, had escalated to R46 million.
Prior to the call for bids by the Municipality, on June 4, 2008, the Municipality signed a letter appointing Raj Maharaj Associates (Architects) “…as a service provider to design and supervise the construction and establishment of Motherwell Thusong Centre.”
The appointment letter further reminded Raj Maharaj to be the Principal Agent for the Municipality. The letter also appointed KWMH Quantity Surveyors, Medan Sign Bester & Associates (Structural and Civil Engineers and Carifro Consulting (Electrical Engineers).
Ho Hup Corporation (SA) Pty Ltd. won the bid for Motherwell Thusong Centre and the contract was signed off on April 20, 2009 by the then Nelson Mandela Bay Municipal Manager, Advocate JG Richards.
Barely a year later, a scheme was already at full speed to boot Ho Hup Corporation from the contract.
On September 29, 2010, Raj Maharaj was called upon by the Municipality to explain why he had decided to withhold signing off for the work already done by Ho Hup Corporation, an act that was delaying payments. During that meeting, the architect provided four reasons that went beyond the scope of the query:
- No value was evident on site to warrant payment
- That the High Court of Port Elizabeth had received an order to liquidate Ho Hup, this being initiated by Zikhona Bricks of Port Elizabeth
- In addition, several other creditors were intending to bring a class action against Ho Hup due to outstanding monies not paid on other contracts
- The risk factor was too high and these risks had to be hedged against.
These four claims were all factually inaccurate. To begin with, high courts do not receive orders they issue them. Additionally, Class Actions are never just imagined and then whispered into the ears of a seemingly compromised architect. Relating to the perceived risk, the contractors (like in this matter) are paid for the work done. In fact the failure by the Lead Consultant to sign-off on the work bore more risk.
[As these journalists were investigating the matter, Ho Hup was still in business and was not liquidated as had been claimed in writing by Raj Maharaj].
Unfortunately for Ho Hup Corporation, on June 23, 2011 - seven months after the presentation by Maharaj - the then Acting Municipal Manager Elias Ntoba terminated the contract with R21.7 million worth of work already done and paid for.
Six months after the termination of Ho Hup’s contract, Samoo’s Metro Building & Civil Contractors was appointed to complete the work. And that was when improprieties got the better of all those involved. Samoo believed the Municipality, through its Principal Agent Raj Maharaj, was contracting his company. But it later seemed Raj Maharaj regarded Metro Building & Civil Contractors as his personal sub-contractor.
In the 2008 letter appointing Raj Maharaj to his role as a Lead Consultant, there was no provision that would have allowed him to be the lead contractor of the project. That should have been the first red flag for anybody who was looking.
Besides this anomaly, the ‘sub-contracted’ Metro Building & Civil Contractors proceeded and performed as was required. As the work progressed, Samoo was issued completion certificates for the various stages of the project he had worked to facilitate payments from the Municipality.
But when Samoo submitted his final claim to Raj Maharaj to sign off, the architect declined to approve the work for payment just as he had done with Ho Hup Corporation. Samoo couldn’t understand why the dues weren’t paid, so he enquired from the office of the Municipal Manager. He was shocked to be informed that the Municipality did not have any idea who he was as he was a sub-contractor of Raj Maharaj. But if that was the case, why had the Municipality been previously making direct payments to Metro Building & Civil Contractors cc whenever it presented invoices and certificates from Maharaj? Secondly, on what grounds would Maharaj have been the main contractor with powers to sub-contract? Was that the reason why he had facilitated the ejection of Ho Hup from the project?
These questions prompted a letter dated June 22, 2012 and signed by Raj Maharaj allegedly terminating the contract with Samoo’s company. [It had happened before with Ho Hup].
With pressure mounting on him to pay his employees, Samoo knocked on every door in the Eastern Cape administration. Empty promises to investigate the tendering process and how an architect ended up being the ultimate contractor were made. Samoo, a previously confident father of two daughters was getting broken piece by piece and nobody seemed to care.
As a last resort, Samoo opted to open a case with the provincial office of the Public Protector. In his letters to the office, he provided all the details that would have assisted the investigators to root out the rot. Without appreciating Samoo’s venerability, Advocate GM Maxakato of the Bisho office of the Public Protector forwarded the letters to the culpable Municipal bosses. An investigation indeed!
Reliable and verified information gathered by these journalists from multiple sources indicate that soon after the letters were forwarded to the Municipal bosses, an unsuccessful attempt to move tender files from the Municipal offices was made at night. Samoo’s friends and police officers tried with little success to find out the intended destination of the records and on whose behest the trucker and loaders worked. The driver of the truck allegedly said he’d been instructed to transport the records to an alternative storage, but couldn’t name the paymaster.
Meanwhile, there were several communications between the Municipality, Raj Maharaj and the provincial office of the Public Protector.
A Response signed off by Nkosana Dunjana, Director for Motherwell Urban Renewal Programme (MURP), dated February 18, 2015, to the Provincial Office of the Public Protector, had glaring contradictions. The most obvious ones were the amounts that were allegedly paid to consultants, including Raj Maharaj:
“The following payments were made to the Consultants:
- Lead Consultant – Raj Maharaj Associates (Architects)– R5,572,185-97
- Sub Consultant– KWMH Quantity Surveyors – R1,510,298-66
- Sub Consultant – Madan Singh Bester & Associates cc – R1,080,031-68
- Sub Consultant – Carifron Consulting Engineers – R171,400-65”
Also added to the list of ‘sub consultants’ was a company called MGP Consulting that was allegedly paid R98,090.00. This company wasn't on the list of consultants that were part of the project at inception.
Dunjana’s subsequent paragraph was even more exposing: “Raj Maharaj was paid R9,623,438.31, excluding VAT, in total after successful completion construction of the building works in terms of the extension of his terms of reference. (sic)
“Metro Building was contracted by Raj Maharaj. The actual contract between the two is not known to the Municipality. MURP tried to intervene to solve the situation between Raj Maharaj and Metro Building, but Raj Maharaj cautioned MURP not to get involved as Metro Building was contracted by his firm.”
So if Metro Building was contracted by Raj Maharaj [maybe to offer some additional designs], what was the Municipality paying him for?
Fed up with empty promises, lies and the Municipal’s corrupt tendering process, Samoo provided the Office of the Public Protector with a rebuttal statement on July 2, 2015. He never heard from the provincial office of the Public Protector again. All he wanted was the ability to pay his workers who had endured months without salaries.
Samoo didn’t have any answers for the former employee who walked into his office in September allegedly demanding his long-over-due wages. A knife was drawn, and Samoo and his nephew were attacked. The result was the untimely death of a man who had dedicated his life to serving the community.
Whichever way one looks at this crime, corruption played a role. The senseless murder of Soonthra ‘Samoo’ Chetty was a hit by some uncomfortable, corrupt individuals or an act of vengeance by a disgruntled former employee. It is likely Samoo would be alive today if the Municipality had duly paid his fees.
We repeatedly called Raj Maharaj for comments but despite numerous messages, he never returned our calls. The unfortunate thing with Samoo’s case is that there are several other similar projects where ghost entities were paid at the expenses of the people who did the work.