Two service providers for the Madibeng municipality in North West have been arrested for fraud which may total more than R100-million, the co-operative governance department said on Tuesday.
"[This] follows closely on that of the suspended municipal manager of Madibeng, Philemon Mapulane, who was arrested and released on R40 000 bail three weeks ago," the department said in a statement.
Tender fraud at Madibeng municipality
"Both service providers have been linked to Mapulane and are alleged to have illegally benefited from tenders in the municipality."
According to the statement, Mapulane was known as "Mr Cash" when he was suspended in October 2009.
The service providers are Justice Maphosa of Big Time Strategic Consulting and Computer Inc and Media Solutions, who was arrested a few weeks ago, and Phillip Tebogo Bahlekazi, who was arrested on Monday.
Bahlekazi was released on R25 000 bail and had to surrender his passport. Both Mapulane and Maphosa appeared in court on October 17 2009.
"Investigations into corruption in Madibeng municipality reveal millions of rands that have been lost through financial mismanagement, fraud and corruption," the department said in the statement.
"The exact and final value of the unlawful transactions has not been fully determined yet, pending completion of investigations."
However, investigations so far had revealed suspected fraud in projects totalling over R100-million.
Premier suspends CFO
Meanwhile, unrelated so far to the suspected fraud at the Madibeng municipality, Philip Gumede, chief financial officer in the North West premier Maureen Modiselle's office, has been suspended.
"The decision to suspend the CFO followed after the premier received reports on forensic audit reports of all North West reports last week," spokesperson Matshube Mfoloe said in a statement.
"She decided, after going through the reports, to put Gumede on pre-cautionary suspension yesterday [Monday] to allow the last leg of investigations to go on without any possible interference." Mfoloe said the premier found "serious breaches of government procurement protocol", but stressed that no charges had been levelled against Gumede yet.
This would only happen once an investigation had been completed.