R54m corruption trial: State says Phahlane, co-accused cost police chance to secure cheaper software

The prosecution further alleged 'fictitious competition' in the procurement of spy software. The state has accused former acting national police commissioner Khomotso Phahlane and his five co-accused of depriving the the South African Police Service (Saps) of an opportunity to secure better value for money through a competitive bidding process for two software contracts worth approximately R54 million. The allegations were outlined when the fraud and corruption trial resumed before the Gauteng High Court in Pretoria on Thursday, 12 November 2026. Phahlane is standing trial alongside Major-General Maanda Obert Nemutanzhela, former major-general Mankosana Agnes Makhele, former lieutenant-colonel Godfrey Mahwayi as well as businessmen Inbanathan Kistiah and Avendra Naidoo. The six accused, who were arrested in September 2022, face charges of fraud, corruption, theft and contravention of the Public Finance Management Act (PFMA). The case centres on two contracts awarded in 2016 for the procurement of software intended for Saps’ Crime Intelligence division. The trial had recently been postponed to allow for the conclusion of the local government elections. Alleged procurement irregularities in Phahlane corruption trial One of the disputed contracts involved Ripjar, a social media surveillance tool reportedly intended to help Crime Intelligence monitor the #FeesMustFall protests that erupted in October 2015. The other involved Daedalus, a mobile communications security system allegedly designed to encrypt telephone calls in addition to erasing cellphone records and messages. The deals were concluded during a period when Phahlane was already under investigation by the Independent Police Investigative Directorate in connection with the R191 million blue lights police tender, as well as other alleged procurement-related misconduct dating back to his time in office between October 2015 and August 2020. It is alleged that Phahlane authorised an emergency procurement deviation on 21 December 2016, paving the way for the acquisition of both software systems. The contracts were then awarded to Brainwave Projects 1323 CC, which was owned by Kistiah at the time and operated under the name I-View Integrated Systems. The value of the two agreements was reportedly R33.86 million and R20 million, respectively. Bidders not independent competitors Detailing its case, the prosecution alleged that false information was provided about Brainwave Projects and Perfect Source Professional Service, a company owned by Naidoo’s former wife, Gevani. Both companies had submitted price quotations to Saps for the supply of the software. The state contended that the information concealed the links between the two companies, creating the impression that they were separate and independent bidders. As a result, Crime Intelligence allegedly accepted the “misrepresentation as true and correct”. The state further argued that the alleged deception prevented Saps from taking legal action against Kistiah and Brainwave Projects to have the contract set aside or reviewed. This, according to the prosecution, left the police service exposed to contractual obligations and potential financial liability towards Kistiah and Brainwave Projects, including payments linked to the Ripjar agreement. “The accused knew in truth and in fact that foresaid misrepresentations were false,” the prosecutor told the court. The state advocate maintained that Phahlane and his co-accused were aware of the connections between Perfect Source, Kistiah and Brainwave Projects. It further alleged that the parties had “colluded” to ensure Brainwave Projects’ quotation was given the greenlight and to secure the contract for the company. “Brainwave Projects 1323 CC and Perfect Source were not in a genuine or real competition with each other, but in a fictitious competition. “The procedure followed to award the contract to accused number two and Brainwave Projects 1323 CC to supply the software named Ripjar to the division, Crime Intelligence, was not fair, equitable, transparent, competitive and cost effective and was therefore not compliant with the prescripts of Section 217 of the Constitution of the Republic of South Africa and other legislation that govern procurement of goods or works or services by all those of state.” Police allegedly denied opportunity to secure cheaper software The prosecution argued that the two companies were not the only potential suppliers capable of providing the required software. It alleged that the manner in which the procurement process was handled prevented Saps from considering other service providers who could potentially have supplied the products at lower prices. “Their conduct amounted to a denial of an opportunity to select the most cost effective price from a pool of independent service providers to the division.” The state also challenged the grounds on which the procurement was classified as an emergency, arguing that the circumstances did not justify bypassing the normal competitive procurement process. “At the time of the award of the contract, the #FeesMustFall protests had been happening for a period of more than 12 months.” The trial is expected to resume on Monday, 16 November. According to the Investigating Directorate Against Corruption, the postponement was requested to accommodate one of the legal representatives, who needs to attend the funeral of a staff member scheduled for Friday, 13 November.