Africa: The Grahamstown High Court has, on Tuesday, 7 June 2022, granted a forfeiture order against the Eastern Cape Transport Tertiary Co-Operative Limited (ECTCC) to pay back R35 million #Covid19 TERS funds that were misappropriated from the Unemployment Insurance Fund (UIF).
The Fund agrees with the Court’s decision because it believes that the benefits paid out to ECTTC and affiliate co-operatives are indeed the proceeds of unlawful activities. One of the requirements in the Covid–19 TERS directive is that an employer, when applying for the benefits must submit a letter of authority as well as a signed Memorandum of Agreement (MoA) with the UIF.
The UIF asserts that those applications were fraudulent because the intended recipients were not eligible for the benefits and that they amounted to unlawful activities. The applications contravened the MoA, which provides that an employer would only qualify for the benefit if the temporary closure of its business operations is a direct result of the pandemic; and they contravened Item 7 of the MoA, which provides that the employer undertakes to use the benefits exclusively and solely for the purpose of paying the benefits to its employees.
ECTTC, after creating a profile, submitted applications for benefits on behalf of other applicants as employers and was paid in six instalments in one banking account in the total sum of R19 743 977,00.
“This raised a red flag for us, and we initiated an interim audit which revealed irregularities that included applications made on behalf of government employees, deceased individuals and prisoners”, says UIF Commissioner Teboho Maruping.
A further investigation revealed that sixty-six entities submitted applications for benefits using the same contact details and collectively received R220 552 295,88. In March 2021, the UIF opened a criminal case with the South African Police Service (SAPS). In July 2021, the Fund applied for a preservation order to freeze the bank accounts so it can prevent further loss of Covid–19 TERS funds already paid to ECTTC and its affiliates.
“We have always warned those who fleeced the Fund that we are coming for you. The fantastic cooperation between the Fund and law enforcement agencies will ensure that more suspected criminals are brought to the book to account for their unlawful conduct. We will not rest until we have followed and accounted for every cent and rand that was paid through Covid-19 TERS, and where wrongdoing is uncovered, the law must take its course and wrongdoers are brought to book”, concluded Maruping.