Business owner faces criminal prosecution following tender fraud

Business owner faces criminal prosecution following tender fraud

Wanda McCarthy, a Saldanha Bay businesswoman who is a director of Securimed Response CC t/a Crime Force, appeared in the Vredenburg Magistrates’ Court on 18 July 2023, facing charges related to a security tender fraud worth over R26m. She was released on R20 000 bail and ordered not to contact Saldanha Bay Local Municipality officials following her appearance.

The State alleges that McCarthy misrepresented when she submitted a bid for a more than R26m security tender issued by the Saldanha Bay Local Municipality. On 15 March 2018, the municipality advertised a tender for the provision of security services for 01 July 2018 to 30 June 2021, with an approved budget of R30,9m for the three years, for Hopefield, St Helena Bay, Paternoster, Vredenburg. Saldanha Bay and Langebaan. The winning company was required to provide 77 security guards to the towns, inclusive of day and night shifts. The security guards were required to be qualified to level-C and possess legitimate PSIRA certificates. The company was also required to provide labour and transportation, with 10 vehicles registered in the service provider’s name at the time of bidding.

Any bidder was duty bound by clauses 1, 7 (5) and 9 (1) of the Code of Conduct for Security Service Providers 2003, which denotes that any security service provider and its director must be honest in all its dealings with any organ of state and that, any security service provider and its director may not use any misrepresentation or use any method or act prohibited in terms of legislation or common law dealing with corruption, when communicating, negotiating or contracting with a client (Saldanha Bay Local Municipality).

On 10 April 2018, McCarthy completed and signed tender documents confirming, among others, that the state may act against her should the information supplied be proven to be false, and that she was aware that any suspicious bid may be referred or reported to the National Prosecuting Authority for criminal investigations. Her bid totalled R26,8m for the three years. The tender closed on 20 April 2018.

On 09 January 2019, the company started providing the required security services and on 24 January 2019, National Treasury published the award of tender SBM 45/17/18 to Securimed Response CC t/a Crime Force. Two unhappy bidding companies appealed the awarding of the tender but lost as the municipality believed that the company qualified to be awarded the tender, based on the information received.

A whistle-blower reported irregularities in the awarding of the tender to the Presidential Hotline and the matter was referred to the SIU for investigation. Scrutiny of the company found that the accused had made misrepresentations, stating that her company had a workforce of between 400 to 600 employees and a registered fleet of over 10 vehicles. Between February and March 2018, the company’s bank statements reflected payments to 27 employees for February 2018, 90 employees for March 2018 and 90 employees for April 2018, with a total of R357 273.00. This meant that the company had an average of 69 employees between March and April 2018.

Investigations also revealed that two vehicles, which the accused claimed were part of her registered fleet, were in fact owned by two private individuals who were not employed by her company and the vehicles were not rented by the company from the two individuals.

On 30 March 2020 the municipality terminated the tender after having paid R13,8m for services rendered. The State alleges that the accused’s actions were both unlawful and intentional to the extent that the unsuccessful service providers were prejudiced, and incurred a substantial amount of money to pursue the appeal which was fraudulently awarded to the company. As a result, other prospective tenderers and the municipality suffered actual loss and prejudiced in the amount of R13,8m.

The case will return to the Vredenburg Magistrates’ Court on 21 August 2023 and more charges are likely to be added at the next appearance.

Issued by,

Eric Ntabazalla

NPA Regional Spokesperson

Western Cape Division