25 May 2024 | 03:35 PM

The family cashing in on government dysfunction

Key Takeaways

  • The Naicker family has made billions leasing water tankers and yellow plant to government, despite being indicted for collusion in 2015.
  • It has taken eight years to bring the case to the Competition Tribunal despite one of the implicated directors admitting to collusion and agreeing to testify against the family.
  • In March, Aqua Transport and Plant Hire received part of a R4.7-billion contract to upgrade the N3, even though its directors are on trial for corruption. In April, X-Moor Transport got an interdict to stop National Treasury from blacklisting the company from government contracts for 10 years.

Every year government spends billions of rands hiring heavy machinery from private companies.

Front-end-loaders and bulldozers – so-called “yellow plant” – help keep the lights on at Eskom, the ports open at Transnet, and sewerage systems pumping, while water tankers offer the only lifeline when water infrastructure collapses.

One family has benefitted more than most from these contracts: the Naickers from Durban.

Aqua Transport and Plant Hire, run by one arm of the Naicker family, has the largest fleet of water tankers in the southern hemisphere; while X-moor Transport, run by the other, has major contracts with Eskom, Transnet and PetroSA.

But in March, National Treasury threatened to close the tap and blacklist part of the family and their companies from doing business with the state for the next 10 years.

This “sounds the death knell for X-moor”, director Alvin Naicker told the Johannesburg high court in an affidavit, adding: “X-moor currently has over one hundred live contracts – for the provision of services to various municipalities and other State-Owned Entities – throughout the country.”

The decision stems from a forensic investigation into Johannesburg Water’s lucrative water tanker contracts, which – as the city’s taps ran dry – ballooned to R90-million in 2022.

According for Johannesburg Water, X-Moor and a related company engaged in “undesirable conduct” and “collusive bidding practices”.

X-Moor is challenging the report, and in April obtained an interdict to keep Treasury and its blacklist at bay.

But the Naickers’ empire is facing threats from other quarters.

In September last year, Aqua’s directors were arrested on charges of fraud, theft and corruption relating to a 2012 tender with the Kwazulu-Natal department of roads and transport.

And in November this year, X-Moor will appear before the Competition Tribunal to answer long-standing allegations of collusion.

The Competition Commission, which is tasked with investigating and prosecuting collusion, indicted X-Moor, Aqua and two related companies in 2015, over a R342-million tender for Johannesburg’s waste management company Pikitup.

In 2018, Lillian Naicker – Alvin Naicker’s sister – pleaded guilty and agreed to testify against her brothers.

Unperturbed, the Naickers continued taking billions from government contracts, which have funded lavish family compounds in Kloof and Westville, and a fleet of luxury cars, including a Rolls Royce Ghost, a Lamborghini Urus and two Ferraris.

Warring duopoly

There are, in fact, two factions of the Naicker family: brothers Alvin and Inderan Naicker who control X-moor; and their cousins, Donovan and Kevin, who control Aqua. In simple terms: the X-Moor Naickers from Kloof and the Aqua Naickers from Westville.

“The current Naicker family origins can be taken back to identical twin sisters who married twin brothers,” Doris Dondur, an accountant working for Pikitup, explained when questions about the Naickers were raised during the 2012 tender.

According to Dondur, who got the family history “directly from the MD of Aqua Transport”: “The two brothers started their waste management business, in Durban, during the 1960s. During the 1990’s … the cousins, who were at that point responsible for the running of the businesses, then had different business philosophies and their paths diverged.”

Since then, the rivalry has grown. The X-Moor and the Aqua Naickers still work together when it suits them, but they have also traded allegations of corruption and legal threats.

In other words, not so much a monopoly as a warring duopoly.

“The … companies, who are the only … real players in the industry, are fierce competitors and, given their ongoing ‘family feuds’ are unlikely to collude or even collaborate with one another when compiling bids,” Dondor, the accountant, concluded.

This view – that the two factions of the Naicker families are locked in bitter war – was shared by most sources amaBhungane spoke to. One, who requested anonymity for fear of repercussions, went so far as to say that most government investigation against the Naickers had been prompted by a tipoff from a rival family member.

“The families are so hellbent on taking each other down they’re going to destroy [themselves]. It’s self-destruction,” the source said.

For instance, when Pikitup asked Gobodo Forensic and Investigative Accounting to investigate the Naickers, director Deon Wilson disclosed that another state-owned entity had already investigated the family in 2010.

“[O]ne of the whistleblowers … was a member of the Naicker family who appeared aligned to … [X-Moor] and who had raised concerns regarding alleged irregularities involving … Aqua.”

However, the rivalry between the X-Moor and Aqua Naickers did not rule out the possibility of “collusive tendering … between the family members within the two factions”, he added.

What the Competition Commission would later conclude was that both X-Moor and Aqua had colluded – not with each other, but with smaller companies on their own side of the family divide.

Dividing up Eskom

The Naickers tend to dominate the industries in which they operated.

In 2016, Eskom awarded a R660-million tender to hire yellow plant to move coal and dispose of ash at coal-fired power plants.

In isolation, it looked like a good deal: Eskom could spend roughly R1.35-million to buy a second-hand front-end loader, or it could rent one for R455/hour – a price that would include the salary of the operator (generally earning R31/hour).

But Eskom wanted to rent 357 pieces of yellow plant, most running for 12 hours a day, almost 365 days a year.

The front-end loader that would have cost Eskom R1.35-million to buy, would cost R1.9-million to rent for year, albeit without the costs of hiring the operator, and providing fuel, maintenance and insurance.

Out of the sixteen companies were appointed on this one-year contract, at least seven were connected to the broader Naicker family, and would gobble up 90 percent of the R660-million.

The lion’s share would go to X-Moor (R242-million) and Aqua (R238-million).

But smaller contracts worth another R106-million would go to companies controlled by family members on the Aqua side:

  • R39-million would go to Midmar Plant Hire owned by Kevin and Donovan’s 74-year-old mother Salosh Naidu,
  • R27-million would go to Ekene Investment belonging to Kevin’s 26-year-old son, Aquin Naicker,
  • R27-million would go to Sage Trans, owned by Kevin and Donovan’s sister Vernie Naicker, and
  • R13-million would go to Marlisha Transport, owned by their other sister, Yvonne Naidoo.

We have seen no evidence to suggest the tender was compromised. But is it a crime for family members – some living in the same house while running supposedly competing companies – to bid on the same tenders?

Copy-cats

“In broad terms, collusion … means cooperation by firms … which are supposed to compete but instead, they decide to work together to give a false impression of competition,” the Competition Commission’s spokesperson Siya Makunga explained.

The end result: tenders are inflated, and government is conned into paying more for goods and services.

Makunga added: “Familial relationships strengthen the possibility of collusion given a free flow of information between family members. However, one still has to have concrete evidence of collusion. You cannot sustain a prosecution simply because people are related.”

Concrete evidence of collusion is hard to come by unless you are in the room when a secret deal is struck.

With the construction industry, the Competition Commission knew that collusion had taken place because Rocla, a subsidiary of Murray & Roberts, confessed to fixing the price of pipes, culverts and manholes, which eventually led to 12 of the major players confessing to an industry-wide cartel. With the life insurance industry, the Commission had leaked emails showing how rival companies gave each other access to internal pricing schedules.

But when the R342-million Pikitup tender was first referred to the Competition Commission in 2012, investigators had little to go on.

There was the family connection between the Naicker companies: Waste Rite, the company X-Moor was accused of colluding with, was run by Lillian Naicker, Alvin and Inderan’s sister – in other words, both X-Moor and Waste Rite were run by members of the X-Moor Naicker family.

And Midmar, the company Aqua was accused of colluding with, was run by Kevin and Donovan’s mother, suggesting a parallel gambit amongst the Aqua Naickers.

There was also the pricing – X-Moor and Waste Rite’s were identical on some items (on the X-Moor side) – and the fact that an Aqua document had been included in Midmar’s bid (on the Aqua side).

But Gobodo Forensics had already considered these issues in 2012 and decided there was “insufficient evidence to conclusively prove” collusion.

In September 2015, despite the apparent weakness of the evidence, the Competition Commission charged both sets of Naicker companies with collusion: Aqua and Midmar from the Aqua Naickers, and X-Moor and Waste Rite from the other branch of the family.

“The collusion is alleged to have taken place in the form of a bilateral agreement between Aqua and Midmar as well as a bilateral agreement between Waste Rite and Crossmoor [X-Moor],” Kelebogile Modingoana, an inspector in the Commission’s cartels division, wrote in an affidavit, adding that the Naicker companies’ conduct was “egregious and a serious contravention of the Act”.

Aqua insists it was technically never charged with collusion, merely that its case was referred to the Competition Tribunal, which effectively acts as a court in collusion cases.

“We reiterate that these are just allegations of purported collusion and that Aqua was never found guilty and/or charged for collusion by the Competition Commission,” the company told us in a written response.

But Aqua is playing semantics: “Referral of a case … to the Competition Tribunal is equivalent to being charged by the National Prosecuting Authority,” Makunga explained. “Referral is equivalent to indictment.”

Cashing in

Initially, being indicted for collusion did little to slow down the Naicker companies.

Throughout the country, Naicker-owned water tankers kept rolling over roads built by Naicker companies, as Naicker-owned yellow plant kept the lights on at Eskom, the ports open for Transnet, and the sewerage systems afloat everywhere else.

In 2016, the City of eThekwini awarded a R120-million water tanker contract to Aqua, X-Moor, Midmar and Ekene. That fact that all the companies belonged to the Naicker family – and that three of the four had just been charged with collusion – did not deter officials.

The R660-million Eskom yellow plant tender soon followed, as did a R1.2-billion Transnet contract which was awarded to X-Moor in 2017. Again, no one blinked.

In Johannesburg, contracts with Naicker-owned companies were rolled over by officials who seemed incapable of awarding new tenders. A 2013 Johannesburg Water contract that was initially meant to cost R74-million was extended 10 times and eventually grew to R494-million.

Each time the contract came to an end, officials would say the new tender was not ready and beg for an extension: “The mechanical plant used under this contract are essential as the plant is utilised when … repairing water pipe bursts and sewer blockages… Not having this contract in place … will cause major disruptions on service delivery,” a deviation request – one of many – read.

By June 2017, X-Moor’s order book stood at R4.8-billion, according to leaked company records. But what the same documents reveal is X-Moor’s business was far more intertwined than the Competition Commission suspected.

Inside X-Moor’s books

When X-Moor bids for contracts you will often see two companies appear on the bidders list: Amaphiko eJuba and Ethos Transport and Plant Hire.

At first glance, both appear to be independent: Amaphiko is owned by Sandra Munsamy while Ethos is owned by Simone Pillay. Look closer though, and you will soon discover that Sandra is Alvin and Inderan’s sister, while Simone is Alvin’s daughter – in other words, both companies are controlled by members of the extended X-Moor Naicker family.

Some of this information surfaced in 2019, when Munsamy was kidnapped as she was driving to the X-Moor Naickers’ family compound in Westville. She was held for five months before being rescued.

At the time, X-Moor’s sister company, Crossmoor Transport, was facing mounting pressure from creditors. In a bid to stave off liquidation, Alvin Naicker told the court that the company’s finances had been negatively impacted by the kidnapping of Munsamy, the company’s chief financial officer.

What internal X-Moor records suggest is that both Sandra and Simone worked for X-moor until at least 2018 – they held company email addresses, had phone extensions at X-Moor’s Pinetown office, and had access to X-Moor’s finances – while at the same time supposedly running rival companies and bidding alongside X-moor on government tenders.

Leaked records also suggest that X-Moor’s finance department drew up cashflow projections for the two smaller companies, kept track of Amaphiko and Ethos’ earnings, and recorded the two companies’ tenders in X-Moor’s own order book.

“When creditors started closing in, X-Moor did two things,” the company insider told us. “One, they moved business to Ethos, and two, they sent assets to Dubai and set up a company there.”

By 2018, Ethos had orders of over R200-million, double its earnings from a year earlier, according to X-Moor’s records. (Leaked records also confirm that X-Moor began selling equipment to Alvin Naicker Equipment Machinery Rental LLC based in Dubai.) 

When we contacted Simone Pillay, Alvin Naicker’s 33-year-old daughter, she told us: “I run Ethos Transport as an independent entity.” She invited us to send questions, adding: “This narrative is exhausting as it’s the furthest thing from the truth.”

But after we sent questions, describing the evidence we had, she stopped responding.

When we contacted X-Moor for an interview, we got a letter from its attorneys, threatening to interdict us, report us to the Press Ombud, and sue amaBhungane and its journalists.

We pointed out that threatening to sue us without hearing the allegations, looked like intimidation. The attorneys relented and agreed to look at our questions. In a response they said:

“The questions posed to our client are already assumption-based and appear more as cross-examination and interrogation as opposed to a real effort to investigate and determine facts on an objective basis … It is clear to our client that your questions and purported ‘research’ has yielded incorrect facts.”

They added: “Our client will not allow pending legal matters to become the subject of media articles and an interrogation and will certainly not tolerate nor submit itself to same.”

Inside Aqua’s operations

Down the road at Aqua’s Westmead office, a similar story was playing out.

Like his cousins on the X-Moor side, Kevin Naicker from Aqua had set up a business for his son. Shortly after turning 19, Aquin Naicker became the sole member of Ekene Investments, which – like Aqua – specialised in leasing yellow plant to government.

In the 2016 Eskom yellow plant tender, Ekene was paid R27-million to supply rollers, excavators, tippers and water tankers to power stations Matla, Duvha, Grootvlei, Lethabo and Komati.

We do not have access to Aqua’s internal records, so we have less insight into how the two companies operate, but from what we have been told, Ekene eventually became an issue between the two Aqua brothers, Kevin and Donovan.

“Ekene and Midmar” – the latter owned by their mother Salosh Naidu, the matriarch on the Aqua side – “were only supposed to be there for cover quoting, they were never intended to win tenders,” the company insider alleged.

“They were meant to be there to establish pricing, i.e. provide a higher price so Aqua doesn’t look too expensive,” the company insider claimed, adding, “The split between Kevin and Donovan started when Kevin started siphoning contracts to Ekene.”

Aqua vehemently denies this: “These companies are not fronts for Aqua Transport. Furthermore, there is no relationship between Aqua and these companies … Aqua does not engage in cover quoting practices.”

Another technique, common when collusion is present, is bid suppression “in which one or more companies agree … to withdraw a previously submitted bid so that the designated winner’s bid will be accepted”, the Commission explained.

In September 2021, Eskom advertised a new tender to supply yellow plant to its power stations. Seventy-five companies submitted bids for the R827-million contract, 11 were selected, including X-Moor, Aqua and Ekene.

But according to a confidential report from Eskom’s Forensic and Anti-Corruption division, Aqua accused Eskom of not following process when it accepted Aqua’s R75-million bid to supply yellow plant to Majuba power station. When Aqua – run by Kevin and Elaine Naicker – failed to accept Eskom’s letter of award, the contract defaulted to the second-placed bidder: Ekene – run by their son.

It is worth pausing for a moment to reflect that for “bid suppression” to work, Aqua would need to know that Ekene was next in line, and it is not clear how Aqua would have known that.

Regardless, the result was that Eskom would now pay R97-million – R22-million more – to rent the equipment from Ekene. What really stung was that Eskom would later discover that some of the equipment Ekene provided at Majuba was owned by Aqua.

In June this year, the forensic investigation concluded that “Ekene and Aqua committed fraud by failing to disclose their relationship” and recommended that Eskom “[r]eport suspicions of bid-rigging to the Competition Commission”.

Aqua insists there is nothing to report: “Aqua has not participated in any collusive practices and as such nothing warrants a referral to the Competition Commission.

“There is no provision in the tender document that deals with familial relationships and even if such provision did exist, Aqua would not have been aware if any of the entities had been participating in the bid.”

Aqua did, however, point out that the law puts it in a catch-22: “The Competition [Act] is a double-edged sword. It precludes bidders from discussing tenders. It follows from there that if Aqua became aware of any competing entity that was tendering, that that itself would also be a collusive practice.”

Although Ekene’s sole director, Aquin Naicker, appears to live with his parents, Aqua insisted that they “would not have had any knowledge that Ekene was part of the bidding process”.

The forensic report also recommended that Eskom “temporarily block” all its contracts with Ekene, pending a review. Asked if this had happened, Eskom told us that its policy was to only take action if Ekene was found guilty.

“Price-fixing and / or bid-rigging, if proven, is a contravention of the Competition Act … for which a supplier may be suspended or de-registered from the Eskom Supplier Database… Eskom reserves the right to take appropriate remedial steps against any supplier found guilty of bid-rigging / price fixing,” Eskom told us in a written response, highlighting the words “if proven”.

Fallout between the Aqua brothers

By this point, the two Aqua brothers were no longer on speaking terms. In September 2021, they had signed an agreement to separate their interests: Kevin and his wife Elaine would take Aqua Transport and Donovan would take Aqua Bulk.

But it was soon open warfare.

Details of their spectacular fallout emerged in the high court in Johannesburg after both accused the other of stealing ten Mercedes-Benz waste compactor trucks, culminating in the police seizing the trucks from Aqua Bulk without a warrant on what Donovan Naicker described as “trumped up charges”.

“Aqua Bulk contended that Aqua Transport had inveigled and ‘incentivised’ certain SAPS members in a ‘seemingly untoward manner including to unlawfully seize the vehicles in question’,” Judge J Crutchfield wrote in her judgement.

Aqua Transport, she ruled, needed to hand back the vehicles.

Asked about the fallout and the allegations levelled against Aqua, Donovan Naicker said: “I am no longer a director and shareholder of Aqua Transport & Plant Hire … and I cannot comment on matters related to Aqua Transport & Plant Hire due to an agreement signed at my exit.”

Confessions from an X-Moor insider

Over at X-Moor, cracks were developing as well.

Initially, all four Naicker companies decided to fight the Competition Commission’s charges. But in 2018, Lillian Naicker, the younger sister on the X-Moor side, confessed.

“Waste Rite admits that it tendered collusively and fixed tender prices when bidding for a Pikitup tender,” her November 2018 settlement agreement reads.

“[Collusion] is very difficult to prove, hence the Competition Commission introduced the Corporate Leniency Policy to encourage any cartel member to come forward and disclose or report the cartel in exchange for immunity from prosecution,” the Commission’s Siya Makunga told us.

“Whether the Competition Commission settles with or without admission of liability depends largely on the strength of evidence against the prosecuted firm. If the evidence is stronger, the Commission insists on settlement with admission of liability.”

Waste Rite agreed to pay a R225 690 fine and crucially agreed that “Ms Lillian Naicker will assist the Commission in prosecuting the matter against [X-Moor] Transport.”

The fact that Lillian agreed to testify against her brothers was “very significant”, Makunga said.

“[T]he Competition Commission now has a witness that was part of the collusive scheme who is able to testify about how the agreement to collude was reached and implemented.”

Switching off the tap for the X-Moor and Aqua Naickers

In municipalities, the tide was turning against the Naickers as well.

In 2012, the family had been “the only … real players in the industry”, according to the Pikitup accountant Doris Dondur. But a decade later, renting equipment to government had become a lucrative opportunity and an easy form of patronage.

In his book, former Eskom chief executive André de Ruyter described how Tutuka’s power station manager unearthed an Eskom-leased back actor – a common piece of yellow plant – buried in a pile of ash.

“The only telltale sign was the tip of its hydraulic shovel sticking up out of the ash like a scorpion’s tale. Eskom has been paying millions in rent for this ‘missing’ piece of equipment,” De Ruyter wrote.

In Parliament, the booming water tanker business was described as “the root cause of all the corruption in the water and sanitation sector” by one member, while another asked whether the department was “investigating organised crime or a syndicate of water tanker providers who would go out of business” if water infrastructure was repaired.

By 2022, the R120-million water tanker contract that the eThekwini municipality had previously been awarded to Aqua, X-Moor, Midmar and Ekene was up for renewal.

But in the six years that had passed, the need for clean water – and competition to provide it – had become deadly: in February 2022, Amos Ngcobo, a senior manager in the water unit was shot and killed in the municipality’s Springfield office. The hitmen have not been arrested.

Two months later, Phumzile Qatha was shot and killed outside the city’s Ottawa depot. Qatha, who had been in charge of allocating water tankers, had reportedly raised concerns about her safety before she was killed. A suspect was arrested, but later released due to lack of evidence.

In November 2022, another official in the water unit, Sydney Qwabe, died after being shot multiple times in his car. Qwabe had reportedly raised concerns that he was being followed shortly before he was murdered. No one has been arrested for his murder.

Amidst this lethal turf war, eThekwini announced the winning bidders for the three-year, R90-million water tanker contract: the only Naicker-owned company to make the cut was Ekene, run by the Aqua Naickers’ son.

The ANC piggybank

X-Moor was apoplectic, and soon the old family rivalry re-emerged.

In early December, X-Moor successfully interdicted the municipality to prevent it from proceeding with the tender. Soon afterwards, the city’s internal appeals process has concluded that both X-Moor and Aqua had been unfairly eliminated from the tender because of unsubstantiated allegations of collusion.

When X-Moor learned that the municipality was paying the winning bidders anyway, it filed a contempt of court application.

“I was advised by a whistle-blower … whose identity remains undisclosed for purposes of their safety … that the Municipality was acting in contravention of the Court Order,” Inderan Naicker from the X-Moor Naickers told the Kwazulu-Natal high court.

We got called [sic] Mayors office instruction to ensure payment is pushed through as money in [sic] needed for the ANC conference,” the whistleblower allegedly told X-Moor in a letter quoted in the court papers.

Although Aqua had also lost out, X-Moor alleged that its family rivals were still providing water tankers to the city. In a bid to prove this, X-Moor hired a private investigator who spent months tailing water tankers around Durban, recording licence plates and speaking to drivers.

“After 6 months of investigation, we have concluded that the Water Tankers are running daily … We can also confirm that after interviewing some Water tanker drivers, they work from Aqua Transport and that they continued working after Xmoor transport’s water tankers was stopped,” the private investigator would conclude.

By this point, the city was reconsidering its reliance on private water tankers.

In March, eThekwini mayor Mxolisi Kaunda instructed the City Integrity and Investigations Unit to probe the outsourcing of water tankers to private companies, and gave the go-ahead to acquire 55 new water tankers to be owned and operated by the City.

Soon afterwards, X-Moor agreed to withdraw its court challenge, on the understanding that the municipality would re-run the contested water tanker tender.

That is yet to happen, but last month, eThekwini awarded an interim one-year contract to seven companies, including four Naicker-owned companies: Aqua, X-Moor, Ethos (run by Simone Pillay, Alvin Naicker’s daughter on the X-Moor side) and Blue Rand Empire (run by Cody Naicker, Inderhan Naicker’s 24-year-old son, also on the X-Moor side).

There is nothing to suggest the contract was improperly awarded, but again, the Naickers found themselves back on top.

Blacklisting

In Johannesburg, the Naickers were briefly frozen out as well.

In April 2021, the board of Johannesburg Water resolved to cut ties with four Naicker-owned companies. Aqua, Aqua Bulk, X-Moor and Ubuntu Transport Services – another company owned by Lillian Naicker – had all engaged in “undesirable conduct in procurement processes within the City of Johannesburg Group”, an internal memo alleged.

Although not spelled out in the memo, the decision stemmed from a Public Protector investigation into the 2012 Pikitup tender. The investigation – which was initiated under Thuli Madonsela and completed under Busisiwe Mkhwebane – found that Pikitup had sufficient evidence of collusion to cut ties with the Naicker-owned companies.

Doing business with the Naickers before they had been cleared by the Competition Tribunal amounted to “improper conduct and maladministration” on Pikitup’s part, the Public Protector concluded.

Next, Johannesburg Water hired an outside firm of forensic investigators to review all its contracts with the Naicker companies.

D-Finitive Risk Management Services concluded that X-Moor, run by Alvin and Inderan Naicker, and Ubuntu, run by their sister Lillian, had engaged in “collusive behaviour” by bidding for the same tenders without disclosing that the directors of the two companies had common business interests.

This was a technicality – and a far lower bar than “concrete evidence of collusion” demanded by Competition Commission – but it was enough, in D-Finitive’s view, to act.

In February, Johannesburg Water asked National Treasury to blacklist X-Moor, Ubuntu and their directors, and ban them from doing business with the state for 10 years.

Both X-Moor and Ubuntu are challenging the D-Finitive report, and in April, obtained an interim interdict that will, for now, keep them off Treasury’s blacklist.

“If [X-Moor] is placed on the Blacklist immediately, and the Blacklist is published, … [X-Moor] will likely not survive long enough to clear its name. The business… will be at an end without it having been afforded the basic right of defending itself,” Alvin Naicker told the court.

Breaking the Naicker empires

In November, the Competition Commission will finally get its day in court with the X-Moor Naickers.

The case was meant to be heard in April last year but was postponed after both the X-Moor and Aqua Naickers indicated they wanted to settle.

“The reason Aqua engaged into the settlement talks was because Aqua believes this case has a nuisance value,” Aqua told us, adding that the settlement talks were premised on Aqua not admitting guilt.

“The settlement discussion collapsed,” the Competition Commission confirmed, “and it took time for us to get a new hearing date.” (Aqua’s hearing date is yet to be confirmed.)

If the companies are found guilty – eight years after they were charged – they will have to pay back 10 percent of their income from the past financial year.

They will not, however, face criminal charges: cartel conduct is a crime, but only since the 2016 amendment to the Competition Act. “[T]he amendment does not apply retrospectively,” the Commission confirmed. If found guilty, “[o]nly the company will be fined.”

The bigger risk is being blacklisted by Treasury, which X-Moor still faces.

But despite State Capture and the daily reports of corruption, it is astonishingly difficult to get blacklisted from doing business with the state.

Currently, there are just 177 directors and companies on Treasury’s list of Restricted Suppliers and Tender Defaulters. The Guptas, for instance, have not been blacklisted; nor has Bosasa.

And finally, there is the corruption case from the 2012 Kwazulu-Natal road contracts.

According to the charge sheet, Aqua paid R174 000 to a consulting engineer on the project who, in turn, inflated the number of hours Aqua could bill on the project by R1.7-million.

If they are found guilty, the Aqua Naickers face 15 years in jail. But in the interim, billions from government keep flowing to the company.

In March this year, Aqua, as part of a joint venture, was awarded a R4.7-billion contract to upgrade a portion of the N3 highway between Westville and the Paradise Road interchange over the next four-and-a-half years.

Asked why it had awarded a contract to a company whose directors were facing corruption charges, Sanral told the Sowetan that charges alone were not enough to disqualify a company from receiving government contracts. Only a guilty verdict would put the Naickers out of business.

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INVESTIGATOR:

Susan Comrie

Susan took an unconventional career path into investigative journalism. After studying graphic design and art direction, she joined the Daily Voice as a freelance entertainment writer before she eventually managed to persuade her various editors to let her write more in-depth, investigative features.

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