eThekwini official faces R30 million extortion probe

Police in KwaZulu-Natal are investigating a case of extortion after an unknown man believed to be an eThekwini Municipality official allegedly demanded R30 million from a private company, Africa Utility Solutions in exchange for R1 billion worth of tenders.

According to police, the man also demanded that the company withdraw its case against the City over the non-payment of R63m that the municipality owed the company. The man allegedly promised to give more tenders to the company. The City lost the case and was subsequently ordered to settle the owed amount with interest.

Provincial police spokesperson Colonel Robert Netshiunda confirmed the investigation, saying the case was being probed at Westville police station.

“Police in Westville have opened a case of extortion after a 50-year-old man was allegedly instructed by an unknown man to pay a sum of R30 million and to withdraw a case against the municipality,” said Colonel Netshiunda.

However, eThekwini Municipality said it was not aware of the case.

The City’s spokesperson, Gugu Sisilana, said: “Both the municipality’s Legal Unit as well as the City Integrity and Investigations Unit are not aware of the alleged case. We therefore recommend that you contact the law enforcement authority that is investigating the case for any information.”

One of the company’s directors, Privy Reddy confirmed that the company opened a case after receiving demands from a man. He said after refusing to accede to the demands, the company received a specific threat that a negative article would be published against the company for its refusal to co-operate.

Reddy said his company was previously victimised through an article claiming that its R500m smart electricity meters did not work. In response to the said article, Reddy’s company penned a letter of demand to the City with a threat of R500m in damages, demanding that the municipality issue a public statement countering what he called a “deliberate misrepresentation of truth”.

Reddy said that the City had a duty to correct the misinformation as the client had signed, indicating that the product was of good quality.

At that time, Reddy said the City’s failure to comply was costing the company millions of rand as it continued losing business because of the article. However, in response to the letter, the City said it was not liable for any alleged damages that the company may have suffered as a result of the article.

Residents confirmed the functionality of the smart meters to the Daily News, which visited them a few weeks back. Speaking on condition of anonymity, one of the senior managers who was part of the team that received the meters also confirmed on Tuesday that the meters were of good quality and there was no complaint about their functionality.