FORMER National Youth Development Agency (NYDA) chairman Andile Lungisa is out on R10,000 bail after being arrested for fraud and money laundering on Friday morning, the Hawks said.
Hawks spokesman Paul Ramaloko told Business Day earlier that Mr Lungisa and three others turned themselves in at the Johannesburg Commercial Crimes court on Friday.
"He handed himself over to the Gauteng Hawks. It is in connection with the Nelson Mandela Sports Day concert, which was held earlier this year," Mr Ramaloko said.
The accused were expected to be charged with corruption and money laundering relating to the R2.5m the Department of Arts and Culture paid for American R&B singer R Kelly to perform at the event on August 17 in Johannesburg.
The department had allegedly paid the money for Mr Kelly’s booking to a company linked to the accused but Mr Kelly’s agent had reportedly disputed that his client was contracted.
"At some point subsequent to the transfer, it came to the knowledge of the arts and culture minister that R Kelly will not be performing and he had never been procured," said the state prosecutor.
Mr Lungisa's lawyer Thabo Kwinana said on the sidelines of the bail hearing that Mr Lungisa — accused number one — had secured R Kelly's services through his company, Makhanda Music.
Mr Kwinana said Makhanda Music then entered into a contract with VBT Consulting, which had approached him for assistance, indicating that it had an agreement with R Kelly.
On July 31, he said, VBT Consulting, represented by accused number two Thabo Shogole, entered into a contract for R Kelly's service with Clear View Promotions, representing the Department of Arts and Culture.
However, Clear View Promotions paid the contract fee later than the date agreed in the contract, said Mr Kwinana. He said the payment was made almost two weeks later, on August 12, to Sishongoma Suppliers, represented by accused number four Xolisile Guqaza.
Mr Guquza subsequently transferred the money to the account of Mr Lungisa's wife, Ursula Sali, also accused number five. Ms Sali then transferred a portion of the funds to the accounts of the accused, and retained a portion.
R Kelly, who had already been in the country for another music event, left the country on August 11.
Mr Shogole is also out on R10,000 bail, while Mr Guqaza was released for R5,000. Ms Sali, who has a three-month-old baby, got out with a warning.
The court granted that the accused hand in their passports and travel documents. They were also instructed not make contacts with the witnesses.
The NYDA has been plagued with problems in recent years. The Democratic Alliance has often slammed the NYDA over salaries earned by its board members. Last month it emerged that NYDA board members and employees received R7.58m in bonuses.
In 2011, details of a R106m youth festival organised by the agency prompted opposition parties to call for the NYDA’s disbandment.