At least 17 properties and seven luxury cars belonging to businessman Siyabonga Nkosi have been frozen following allegations of a massive fraud scheme targeting Eskom. The action comes after Nkosi was allegedly involved in defrauding the utility of R76.5 million.
The Relay Procurement Scheme
The Special Investigating Unit (SIU) uncovered a system where Eskom officials at the Matla and Kusile power stations allegedly turned procurement processes into a “jackpot” for Nkosi’s company. Between 2021 and 2023, officials approved irregular and inflated purchase orders for relay equipment.
SIU spokesperson Selby Makgotho stated that even as the market price for these relays ranged between R180 and R450 each, Nkosi’s companies charged Eskom R50,000 per unit. Makgotho noted that instead of providing reliable service, the companies primarily delivered invoices.
Bypassing Procurement Controls
Investigations revealed that procurement safeguards were deliberately avoided. Officials allegedly split purchase orders to keep individual transactions below the R1 million threshold, which allowed them to abuse the informal tendering system.
To ensure only colluding vendors could bid, false part numbers were uploaded into the system. Costs were inflated for equipment that was never actually needed and remains unused in stock years later.
Laundering Through Luxury Assets
The SIU alleges that the stolen funds were laundered through several entities, including the Siyabonga Kankosi Trust, the Sibongukukhanya Trust, and the Nkosi Royal Trust. These trusts acted as conduits to move money into high-end assets.
The frozen assets include prime properties located in Mpumalanga, KwaZulu-Natal, and Gauteng. The luxury vehicle fleet includes Lamborghinis and Porsche models, specifically the Panamera and Cayenne.
Legal Outlook and Next Steps
The current preservation order prevents the assets from being hidden, transferred, or sold while the SIU attempts to recover public funds. This order allows the unit to institute proceedings within 60 days.
A possible next step is for the SIU to approach the Special Tribunal. This move could lead to a review and the potential setting aside of the irregular contracts.
Frequently Asked Questions
What specific assets were frozen?
The frozen assets include at least 17 properties in Gauteng, KwaZulu-Natal, and Mpumalanga, as well as seven luxury cars, including Porsche Cayennes, a Porsche Panamera, and Lamborghinis.
How was the fraud carried out?
The fraud involved charging Eskom R50,000 for relays that typically cost between R180 and R450. This was facilitated by Eskom officials who split purchase orders to stay below the R1 million threshold and used false part numbers to limit bidding to colluding vendors.
Which Eskom facilities were involved?
The alleged procurement irregularities took place at the Kusile and Matla power stations.
Do you believe stricter procurement thresholds are enough to prevent this type of corporate fraud?
