Johannesburg Labour Court: Andries Helani Ordered R18m UJ Fraud Repayment

• The Johannesburg Labour Court ordered former UJ director Andries Helani to repay over R18 million for student housing fraud.
• Helani, responsible for NSFAS-funded accommodation accreditation, received more than R3.2 million in payments from private providers between March 2021 and March 2024.
• He failed to declare any conflicts of interest despite his role in accrediting properties that were later found to have significantly fewer beds than promised.
• The judgment, delivered by Judge Reynaud Daniels, may be the first of its kind to hold an employee accountable for fraud under the Basic Conditions of Employment Act's contractual provisions.
• Investigations revealed that two accredited properties, Mahlatse Investments' Jorissen Street and Bertha Street sites, had only 299 beds combined, instead of the 1,441 for which UJ paid R17 million.

This ruling marks a potentially groundbreaking development, as it may be the first instance where an employee is held accountable for fraud and corruption under the contractual provisions of the Basic Conditions of Employment Act.

The Johannesburg Labour Court has ordered Andries Helani, a former senior director of student affairs at the University of Johannesburg (UJ), to repay more than R18 million to the institution. This significant judgment, delivered by Judge Reynaud Daniels on Friday, addresses corrupt and fraudulent contracts related to private student accommodation.

Helani, who served as the head of student affairs from January 2017 until his dismissal in March 2024, was found to have accepted over R3.2 million in payments linked to private student accommodation providers. The university alleged that Helani never declared any conflicts of interest, despite his critical role in managing and overseeing the accreditation of privately-owned student housing, which was funded by the National Student Financial Aid Scheme (NSFAS).

This ruling marks a potentially groundbreaking development, as it may be the first instance where an employee is held accountable for fraud and corruption under the contractual provisions of the Basic Conditions of Employment Act. The case highlights the severe consequences for employees who exploit their positions for personal gain, particularly in sectors reliant on public funding and trust.

Helani's responsibilities included an annual obligation to declare any actual or potential conflicts of interest, a duty he reportedly failed to uphold. In 2021, he deviated from UJ's standard accreditation process for student housing, opting for a tender process for private property owners. Despite this procedural change, subsequent investigations revealed that Helani maintained control over the entire accreditation process.

In November 2021, Mahlatse Investments applied for accreditation for two properties located on Jorissen Street and Bertha Street in Braamfontein. The tender committee was informed that these properties had been inspected by various UJ departments, including student affairs, occupational health and safety, protection services, and property management, leading to their accreditation in January 2022. The Jorissen Street property was approved for 748 beds, and the Bertha Street property for 693 beds. UJ's payment merchant, Fundi Capital (Pty) Ltd, was then authorized to enter into agreements with Mahlatsi Properties, whose directors were Siphiwe Khoza and Stanley Nkele, with Nkele also serving as a director of Mahlatse Investments. Mahlatsi Properties subsequently received over R17 million for 1,441 beds over an eight-month period.

However, an initial investigation by Nexia SAB&T into the 2022 accreditation process uncovered significant discrepancies, revealing that the two properties had less than half the promised bed capacity. The Jorissen Street property only had 125 beds, and the Bertha Street property only 174 beds. Following student demonstrations in November 2022 due to a lack of accommodation, UJ commissioned a more in-depth probe by ENS Attorneys. This investigation confirmed that the submitted documentation for the properties did not meet compliance requirements, and it was unclear if protection services had conducted inspections, while adverse findings by occupational health and safety officers were not addressed. A student testified that she was induced with payments to register at a Mahlatse residence, receiving R1,700 monthly and an R8,500 lump sum, despite never living there. When Fundi stopped payments to the Mahlatse entities in late 2022, she was instructed to falsely inform the university of an eviction.

Judge Reynaud Daniels' ruling confirmed that Andries Helani had received numerous payments directly into his personal bank account from Mahlatsi Properties, Mahlatse Investments, and Khoza. These payments included R30,000 in March 2022, R29,000 in April 2022 for his son's school fees, and R9,000 in October 2022. The court found that Helani received more than R3.2 million through 366 payments from these entities and other private accommodation service providers between March 2021 and March 2024.

Throughout this period, Helani failed to declare any outside business activities or relationships with any of the service providers involved in the University of Johannesburg student housing fraud. This failure to disclose conflicts of interest, coupled with the direct financial benefits received, formed a crucial part of the judgment. The Labour Court's decision to enforce such a substantial repayment order under the Basic Conditions of Employment Act's contractual provisions sets a significant precedent for employee accountability in cases of fraud and corruption in South Africa, particularly concerning undeclared conflicts of interest and NSFAS accommodation corruption.

This Labour Court judgment sets a significant precedent for holding employees accountable for fraud and corruption under the Basic Conditions of Employment Act's contractual provisions, particularly concerning undeclared conflicts of interest. Compliance officers should review their internal controls for procurement and conflict of interest declarations, while legal practitioners can advise clients on potential avenues for recovering funds from employees involved in similar schemes.

Source: Original reporting via GroundUp