Courts & Legal
Nine arrested as R75 million Alfred Nzo tender fraud case heads to court
The quiet corridors of the Alfred Nzo District Municipality have been shaken by a sweeping corruption investigation that has now led to nine arrests.
The Hawks have confirmed that suspects aged between 43 and 73, along with two corporate entities, were taken into custody in connection with an alleged multimillion-rand tender fraud linked to so-called yellow fleet machinery. The arrests took place across various locations, including areas outside the Eastern Cape.
At the heart of the case is an estimated R75 million paid between 2015 and 2018 to a business entity awarded a lucrative municipal contract.
How the investigation began
The case did not begin with a raid. It started with a whistleblower.
According to the Hawks, information was received about irregularities in the procurement process surrounding the appointment of a service provider at the municipality. That tip-off triggered a detailed probe by the Serious Corruption Investigation and Serious Commercial Crime Investigation units.
What investigators uncovered was far more complex than a simple paperwork error.
The yellow fleet at the centre of the storm
The tender involved the procurement of yellow plant machinery, the heavy equipment typically used for infrastructure work such as grading, road building, and large-scale municipal projects.
Authorities allege that when the contract was awarded in late 2014 and early 2015, the appointed company did not actually own the machinery it claimed to provide. Instead, the equipment was reportedly hired or leased from third-party providers.
One of the central agreements dates back to June 2014, when the company entered into a full maintenance lease with Zeda Car Leasing, trading as Avis Fleet Services. Under that agreement, ownership of the machinery remained with Avis, and the equipment was to be returned once the lease ended.
Despite this, in January 2015, the municipality allegedly entered into a hire purchase agreement with the intention of taking ownership of the same fleet after final payment.
Investigators claim the service provider misrepresented its ownership position, creating the impression that lawful transfer of the machinery to the municipality would eventually take place.
Millions paid, funds allegedly laundered
Between January 2015 and April 2018, the municipality reportedly paid approximately R75 million in instalments to the business.
The payments were approved by municipal officials and transferred electronically into the service provider’s accounts.
Financial analysis conducted during the investigation allegedly revealed that the funds were moved through multiple accounts, with substantial cash withdrawals and layered transactions that authorities believe are consistent with money laundering activity.
Alleged collusion inside municipal structures
The Hawks say the probe uncovered significant procurement irregularities. Officials are accused of abusing provisions within the Municipal Finance Management Act to favour the service provider, even though it allegedly failed to meet the required criteria.
Evidence gathered during the investigation points to possible collusion between certain municipal officials, the service provider, and third-party beneficiaries. Authorities believe some officials may have benefited directly or indirectly from the scheme.
The matter is being described as a criminal syndicate that was embedded within municipal structures.
The suspects, including former senior officials, employees linked to Avis, and a businessman, are set to appear before the Maxesibeni Magistrate’s Court on 12 February 2026.
A broader pattern under scrutiny
Investigators have also indicated that similar procurement irregularities may have been replicated in other municipalities, prompting a broader examination of supply chain processes.
The Provincial Head of the Hawks, Major General Mboiki Obed Ngwenya, has commended the investigative team for what he described as meticulous work aimed at ensuring those involved in corruption and economic crimes face justice.
For residents in the Eastern Cape, the case is another reminder of how public funds intended for service delivery can be diverted through complex procurement schemes. With infrastructure backlogs and service delivery challenges already weighing heavily on communities, accountability in municipal spending remains a pressing public concern.
As the court process begins, many will be watching closely to see whether this high-value tender saga results in lasting consequences and stronger safeguards within local government systems.
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Source: The Citizen
Featured Image: Daily Dispatch
