AFU seizes taxi bosses’ R22m assets in TERS fraud probe

The Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (the NPA) has frozen more than R22.5 million held in 25 different bank accounts which belong to the Eastern Cape Transport Tertiary Co-Operative Limited (ECTTC) as well as its affiliate taxi co-operatives and linked business entities.

The seizure of the assets relates to alleged “irregularities” regarding Temporary Employee Relief Scheme (Ters) applications made by some taxi cooperatives.

National Prosecuting Authority (NPA) regional spokesperson, Anelisa Ngcakani, said the AFU had been granted the preservation order to freeze the 25 bank accounts, in the Grahamstown High Court on Friday 30 July.

“When the AFU brought the application before the high court it knew of approximately R14 million which was in the bank accounts. However, when the order was granted the AFU submitted it to the different banking institutions where the bank accounts are held, it then came to light that there was in fact a total of R22.5 million in the bank accounts,” Ngcakani said. 

Due to Covid-19, the Minister of Employment and Labour issued Directives called COVID 19 Temporary Employee / Employer Relief Scheme (COVID-19 TERS), which created a special benefit under the Unemployment Insurance Fund (UIF) to assist those employees who had lost income due to Covid-19.

“During April 2020, Doctor Nokuthula Mbebe, the Chief Executive Officer of the ECTTC, allegedly made numerous applications to the UIF for TERS payments. The ECTTC is an umbrella organisation ostensibly created to assist its affiliate co-operatives to comply with the law and to ensure that the local transport industry is properly regulated and functions according to legal requirements,” Ngcakani said.

“The ECTTC made applications on behalf of its own employees as well as on behalf of the employees of the affiliate taxi co-operatives that belong to the ECTTC. It is alleged that there were a large number of irregularities with the first batch of ECTTC applications,” Ngcakani said.

“These include applications for TERS benefits for 22 government employees, 22 people who were deceased and one person who was incarcerated at the time. These persons did not qualify for TERS benefits. The second batch of applications was made on behalf of 66 taxi co-operatives who belong to the ECTTC and the total amount that was paid out amounted to just over R220 million,” Ngcakani added.

Ngcakani said that when the UIF began to audit these payments, the ECTTC and its affiliate taxi co-operatives allegedly could not verify the correctness of the applications via documentary evidence or a paper trail. “This is in contravention of the directives made in relation to TERS payments as well as the Memorandum of Agreement that all entities applying for TERS must sign,” Ngacakani said.

He said the state had now alleged that the payments, as they stand, are proceeds of unlawful activities as they do not comply with the law. 

“The AFU in conjunction with the UIF Fraud and Corruption investigators, the Financial Intelligence Centre as well as the South African Police Service, investigated these applications in a well-orchestrated joint operation. The investigation is continuing and the amount to be forfeited to the state is expected to increase as the investigation unfolds,” Ngcakani said.