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South Africa Halts Boskalis Unit Probe After Report Leak

Oct. 18 (Bloomberg) -- 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, the department said on 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 that the government was defrauded of about 1.6 billion rand ($185 million), the department said.

“We don’t recognize ourselves in the initial accusations and this confirms our view,” Martijn Schuttevaer, a spokesman for Papendrecht, Netherlands-based Boskalis, said by phone. “We’ve tried to get in touch with the ministry the past few months, but to no avail.”

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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