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Controversial businessman Hamilton Ndlovu loses bid to stop SIU from recovering R172m of illegal PPE tender cash

By Baldwin Ndaba | IOL News |

Controversial businessman Hamilton Ndlovu has lost his battle to stop the Special Investigating Unit (SIU) from lodging a court application to set aside the R172.7 million PPE tender contracts illegally awarded to him by the National Health Laboratory Services (NHLS).

The SIU and NHLS review application was due to be heard in March next year, but Ndlovu and his wife Felicia Sekete lodged an application in November for a stay in the review application.

In his affidavit, Ndlovu argued that the curator Adv Nazeer Cassim, who controls their assets preserved by Sars, was only willing to release R800 000 to them for their legal fees, but that this was too little for them to fight the review application.

But the SIU and NHLS opposed the application, saying Ndlovu and his companies had failed to make full disclosure of their financial means to the Special Tribunal, and as such, had not shown that they need to procure funds held under the Sars preservation order to properly and fully oppose the review application.

They also argued that Ndlovu and his companies did not have a right under the Tax Administration Act (TAA) to procure funds from the assets that have been frozen to satisfy tax debts to fund their opposition to the review application.

“The stay application is brought with the ulterior purpose of delaying the review application. The SIU will be prejudiced by a delay in the finalisation of the review application, as it will allow Ndlovu and his companies to further dissipate funds that have not been preserved,” SIU argued.

Judge LT Modiba agreed, saying Ndlovu and his companies had barely denied the opposing respondents’ allegations that they had failed to make full disclosure of their financial means, and that they may have other independent means to finance the review application.

“They were paid R172.7 million under the contracts awarded to them by the NHLS. In the application for the interim order, a prima facie case is made out that approximately R152 million flowed to Mr Ndlovu for his personal use. Only R103m is preserved under the Sars preservation order and the interim order.

“Approximately R50 million remains unaccounted for by Mr Ndlovu and that includes R15 million withdrawn in cash through tellers and ATMs,” Judge Modiba said.

The Judge also said that Ndlovu referred to third party financial sources to cover his living expenses and his legal counsel during consultation, yet was silent about the funds in the stay application.

“In the absence of full disclosure of the applicants’ (Ndlovu and companies) financial means, including assistance from independent third-party sources and the R50 million unaccounted for, I am not satisfied that the applicants have prospects of success in establishing that they will suffer undue hardship as envisaged in section 163(9) of the TAA – even on the broad definition of this concept that they contend for – if the curator does not make additional money available to them to oppose the review application.

“For these reasons, the applicants’ claim that the refusal of the stay application will violate their constitutional right of access to the courts, is unsustainable. The stay application is not bona fide (genuine),” the judge ruled in dismissing Ndlovu’s application.

He further said: “The applicants have failed to establish that it is in the interest of justice that the review application is stayed.”

Ndlovu and his companies were ordered to pay the legal costs of the SIU and NHLS. The judge confirmed that the review application will go ahead in March next year.