Flame IT, a subsidiary of the Big Time Strategies Group, confiscated the Madibeng municipality’s computers and de-commissioned all information and communications technology equipment last week, bringing the municipal operations to a halt for almost three days. This follows after Madibeng allegedly did not pay them for three months following a forensic audit report.
Taking the forensic audit report findings into consideration, the Madibeng council resolved at the end of June that all payments to the company immediately be stopped and that a criminal case be opened with the police. However, before the municipality could do this, Flame IT collected the computers and de-commissioned the system.
According to documentation in Kormorant’s possession, the IT company now demands R22 million from the municipality for purchase of the equipment, and that Madibeng pays the outstanding invoices from April to July. They also want the contract, which has expired, extended to the end of 2018.
In more documentation the Kormorant has seen, Madibeng is advised that in view of the findings of the forensic report, the municipality should end their dealings with the company as soon as possible as, according to the interim forensic report, the company might be implicated in irregular dealings of over R80 million with the municipality.
According to recent reports by Mail & Guardian, the company is currently also being investigated by the Hawks for fraud following dealings with another municipality in North West. According to the Hawks’ commercial crime investigation unit, there are allegations of contravention of procurement processes, fraud and corruption in the municipality’s ICT tender, the Mail & Guardian reported.
The CEO of Flame IT and the Big Time Strategic Group, Justice Maphosa, was convicted of defrauding the South African Revenue Service in 2015 and sentenced to a suspended eight years imprisonment after entering into a plea and sentence agreement. He was found guilty of 29 counts of fraud in the commercial crimes court in Pretoria for defrauding the South African Revenue Service by submitting fake tax invoices for his companies, Big Time Strategic Consultants and Computer Ink and Media Solutions. He was ordered to pay SARS R843 080.40 in instalments to be settled by January 2019.
The Madibeng municipality was asked whether criminal charges have been laid against the company and how the company has been implicated in the forensic report, but Kormorant was told that the municipality could not give details as it “is a confidential matter.”