South Africa Halts Probe Into Boskalis Unit After Report Leaked

South Africa’s Department of Agriculture, Forestry and Fisheries suspended an investigation into its procurement processes after a forensic report was leaked to the main opposition party.

The department has “lost faith” in Ernst & Young LLP, the U.K.-based company that compiled the document, after the Democratic Alliance received a copy, the government said in an e-mailed statement today. The report confirmed “substantial evidence of irregular contracts awarded” to Smit Amandla Marine, a division of Amsterdam-listed Royal Boskalis Westminster NV (BOKA), the department said Oct. 1.

“The department has lost faith in the work of Ernst & Young and, as a result of these concerns, has resolved to put the investigation on hold,” it said.

Ernst & Young is “engaging with the Department of Agriculture, Forestry and Fisheries and will comment further if appropriate,” the tax and advisory company said in reply to e- mailed questions.

The forensic report found evidence of the department’s fisheries branch awarding irregular contracts to Smit Amandla Marine from 1995 to March this year. Evidence indicated government was defrauded of about 1.6 billion rand ($185 million), the Department of Agriculture, Forestry and Fisheries, said.

Clare Gomes, a Cape Town-based spokeswoman for Smit-Amandla Marine, was not immediately available for comment.

To contact the reporter on this story: Matthew Hill in Johannesburg at mhill58@bloomberg.net

To contact the editor responsible for this story: Antony Sguazzin at asguazzin@bloomberg.net

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