R75 Million Alleged Lease Fraud Case: Court Proceedings Begin

Former Enoch Mgijima Local Municipality chief financial officer Paul Mahlasela, eight co-accused and two business entities appeared in the EmaXesibeni Magistrates’ Court on 12 February 2026 in connection with charges relating to an alleged R75 million fleet lease agreement.

The accused are facing charges including fraud, corruption, money laundering and alleged contraventions of the Municipal Finance Management Act (MFMA).

The charges relate to a yellow and white fleet lease agreement between Kwane Capital and the Alfred Nzo District Municipality (ANDM).

Those who appeared in court include Kwane Capital director Mcebisi Rudolf Mlonzi; company employee Bambangazibini Tabata; former ANDM senior officials, including former acting municipal manager Xolani Masiza, former supply chain manager Paul Mahlasela and former assistant supply chain management manager Zuko Mani; as well as former Avis and Barloworld employees Clive Else and Shawn Govender.

They appeared alongside Monalitho Muba and Xola Bomela, together with their business entity, Chumani Water Solutions.

All the accused were granted bail of R10 000 each. The matter was postponed to 30 April 2026 for further proceedings.

DPCI (Hawks) Eastern Cape provincial spokesperson Warrant Officer Ndiphiwe Mhlakuvana said the arrests followed an investigation into the lease contract awarded to Kwane Capital.

According to Mhlakuvana, it is alleged that Kwane Capital was misrepresented as the legitimate owner of certain vehicles, plant machinery and equipment at the time the lease contract was awarded.

“It is alleged that the company instead relied on hired or leased assets sourced from third-party service providers, namely Avis and Barloworld,” he said.

Mhlakuvana further stated that it is alleged certain senior ANDM officials received gratification in contravention of provisions of the MFMA in relation to the contract.

“It is further alleged that former officials from Avis and Barloworld participated in the arrangement to favour Kwane Capital and received payments for their roles.

“Associates of former municipal officials, together with their companies, allegedly received payments which were laundered for the benefit of certain individuals,” he said.

The Hawks’ Serious Corruption Investigation (SCI) and Serious Commercial Crime Investigation (SCCI) units, working with the Tactical Response Team (TRT) and the National Intervention Unit (NIU), carried out the arrests.

The investigation followed a referral from the Special Investigating Unit (SIU) concerning the contract entered into between the municipality and Kwane Capital between 2015 and 2018.

National Prosecuting Authority regional spokesperson Luxolo Tyali confirmed that the matter has been postponed to 30 April 2026 for enrolment in the Mthatha Specialised Commercial Crimes Court.

“The NPA and the Hawks remain committed to working collaboratively to ensure accountability in matters involving alleged corruption and financial misconduct,” said Tyali.

All accused persons are presumed innocent until proven guilty in a court of law.