E&Y fraud probe into SA Rio Tinto subsidiary

Last week,
& Young
started probing the Palabora Foundation, a development
organisation under the umbrella of
Phalaborwa Mining
(PMC), a member of UK-based Rio Tinto, situated in the Ba-Phalaborwa
area of Limpopo.

The investigations into corruption, nepotism and racism, which have been
confirmed by the board of trustees, follow sensational allegations of corruption
earlier this year in a tendering process, involving several thousands of rands,
awarded to Ilanga Construction, South African newspaper Sowetan reports.

Within less than two months, allegations of racism was directed at the
foundation when a white manager was appointed at Ilanga. Shortly afterwards his
daughter was allegedly offered a job at the Bollanoto Tourism Centre, a division
of the foundation.

Mark Demmer, director of the foundation, has described the allegations as
‘null and void’, while Charles Ausobontent, chairman of the foundation’s board
of trustees, confirmed both PMC and Rio Tinto together with the board of
trustees of the foundation, were concerned about the negative publicity.

Further reading:

E&Y worldwide revenues hit $21.1bn

the story in Sowetan

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