Zondo zeroes in on graft suspects

Chief justice urges investigations and prosecutions over Prasa, SSA, SABC and Vrede project

● Chief justice Raymond Zondo has dismissed bizarre excuses given by the Hawks for failing to complete investigations into allegations of corruption, fraud and maladministration at the embattled the Passenger Rail Agency of SA (Prasa).

According to the Hawks — nickname for the Directorate for Priority Crime Investigation (DPCI) — investigations into two contracts worth a total of about R8bn, which were awarded under the former CEO Lucky Montana, were delayed by the “unsound relationship between the DPCI and Prasa between 2015 and 2018”.

In an affidavit before the commission, Hawks chief Lt-Gen Godfrey Lebeya said Prasa officials had stymied several attempts to probe about 20 cases since 2015.

The contracts — a R3.5bn deal to purchase 70 locomotives from Swifambo and a R4.5bn tender awarded to Siyangena Technologies to install security equipment at Prasa stations ahead of the 2010 Soccer World Cup — were allegedly fraught with irregularities and would later lead to Montana’s resignation from the agency.

In the fifth and final instalment of his report, Zondo tore into the Hawks for failing to investigate these cases, saying: “The DPCI has scored an own goal in the way it has failed to act diligently to investigate the criminal complaints laid many years ago by Prasa. It is difficult to resist the temptation to think that one possible reason why it has dragged its feet the way it has … may be connected with the risk or fear that any proper investigation may well lead to the ANC or to certain figures within the ANC.”

Zondo recommended that all the Hawks’ cases be finalised as soon as possible, and that national director of public prosecutions Shamila Batohi appoint a team to oversee the investigations and prosecutions.

The chief justice also recommended serious consideration be given to prosecuting Montana, former Prasa chief engineer Daniel Mthimkulu and former chief information officer Chris Mbatha for their roles in the awarding of the Swifambo contract. He said ongoing prosecutions of Swifambo director Auswell Mashaba and alleged mastermind Makhensa Mabunda should be speeded up.

On the Siyangena contract he recommended that Montana, Riaan van der Walt and Siyangena and its associated companies be investigated and prosecuted for possible contraventions of the Prevention and Combating of Corrupt Activities Act. He recommended that property deals between Montana and Van der Walt — which are alleged to be how Montana benefited from the Siyangena contract — be finalised as soon as possible.

Zondo said another special commission of inquiry should be appointed to examine specifically why Prasa had been allowed to slide into almost total ruin, who should be held responsible, and who could have benefited.

The Hawks have been under considerable public pressure to conclude several highprofile investigations, including into Prasa. The rail company secured a high court order in May 2018 compelling the Hawks to investigate malfeasance that had already been detailed by former public protector Thuli Madonsela in 2015.

The case was brought by then Prasa board chair Popo Molefe after news that Prasa’s audit for financial 2017 was the worst of all state entities and government departments. Molefe had brought the malfeasance to the attention of the ANC’s top six — after allegations that the party received money from the Swifambo deal — and parliament, and had met with the then president Jacob Zuma, but to no avail.

According to information supplied by Lebeya, the Swifambo case, in which 383 statements have been taken, was 90% complete, while the Siyangena investigation was 75% complete with 185 statements taken. Of the remaining 18 cases, four investigations have been finalised, while the other 14 are still under investigation.

On the civil front Prasa has had both the Swifambo and Siyangena contracts set aside on the basis that they were irregular and corrupt.

In his affidavit Lebeya, who was appointed head of the Hawks in June 2018, said he was told the delays in the investigations were caused by the complainants or other Prasa employees failing to provide further details, as well as Prasa not making available documents relating to contracts and the basis on which they were awarded.

He also cited an apparent lack of co-operation from Prasa employees, especially legal officers Martha Ngoye and Fani Dingiswayo, who he said insisted on being present at every interview with Prasa employees.

“He (Lebeya) referred to letters that had been written to senior Prasa employees and in one case a subpoena being served. However, he then went on to point out that from the time of his appointment on June 1 2018, he had met with the previous board, the administrator and the current board on nine occasions, with the last being a virtual meeting on April 7 2021,” said Zondo.

However, the chief justice was not convinced.

“The allegations that Prasa’s legal section did not co-operate with the DPCI was denied by Ms Ngoye and Mr Dingiswayo. Given that what Lt-Gen Lebeya said in his affidavit is for the most part hearsay, there is no reason to reject their denials.”

Arthur Fraser Elsewhere in the final report, Zondo mandated law enforcement agencies to investigate three men — former intelligence minister David Mahlobo, ex-spy boss Arthur Fraser and the former head of the Chief Directorate of Special Operations, Thulani Dlomo — whose national security tenures were marred by controversies that generally involved suspicious money transfers.

Ironically, money-laundering is one of the accusations that Fraser has levelled against president Cyril Ramaphosa over his Phala Phala cash stash.

Zondo, who recommended zooming in on Fraser’s tenure as State Security Agency (SSA) boss and his handling of money at the time, found that the way budget allocations had soared was suspicious.

His report said the evidence of Ms K, a spook who testified under a hidden identity, indicated that the many “financial irregularities” alleged to have taken place on Fraser’s watch required deeper scrutiny by the likes of the Hawks and the National Prosecuting Authority.

“Ms K confirmed that what concerned the team and other witnesses, including Mr Y, was the cash-based approach adopted by the SSA coupled with [a] negligible audit trail; this left the SSA susceptible to illicit financial flows and possible money-laundering,” said Zondo.

SSA expenditure skyrocketed from R42m to R255m in a single financial year. The money was spent on suspicious operations run from Fraser’s office “at the expense of legitimate operational structures and SSA provincial offices in particular”, the Zondo report said.

Zondo also wants the Hawks to resuscitate an old investigation that was dropped after pressure by the then minister of intelligence, Siyabonga Cwele, and Zuma.

But Fraser is not the only one targeted. “The role played by … Dlomo, … Mahlobo, … Fraser and other people involved in the withdrawal, handling and distribution of the

SSA’s money, should be looked into by the law enforcement agencies,” Zondo said.

David Mahlobo

The deputy minister of human settlements, water & sanitation is in hot water for sticking his nose where it did not belong when he was the political principal for theSSA.

Mahlobo allegedly handled large sums of hard cash, sometimes in front of operatives, when his role was not to swim that deep into SSA affairs.

His denial that he ever received hard cash from the agency, Zondo contends, cannot be sustained and he may be in deeper trouble should a court of law find that he is lying.

“The commission finds therefore that Mr Mahlobo did indeed involve himself in operational matters at SSA, and further that large amounts of cash were delivered to him on several occasions. What he did with the cash delivered to him was not established in evidence.

“Since Mr Mahlobo denied having received cash as testified to by a number of witnesses it means that, if it were to be established in a court that large amounts of cash were given to Mr Mahlobo, it would mean that he stole the money.”

As was the case in Fraser’s stint as director-general of the SSA, during Mahlobo’s tenure as minister of state security “the budget of the SSA increased hugely, based on documentary evidence”.

Thulani Dlomo

For his running of the special operations unit, Dlomo is a person of interest for a variety of underhand activities that happened on his watch. Just like Fraser and Mahlobo, he was also involved in the withdrawal and distribution of hard cash.

But Dlomo allegedly went beyond that as he is also a prime suspect in the disappearance of firearms from SSA that remain unaccounted for.

For this, Zondo found, Dlomo may well be found on the wrong side of gun control laws.

“It is noted, in this respect, that the witness (Dorothy) who was involved in the collection of the firearms on the instructions of ambassador Thulani Dlomo, testified that she opened a case of missing fireGupta arms with the police. The question is, what have the police done with the matter.”

Hlaudi Motsoeneng, Lulama Mokhobo, Faith Muthambi

Zondo’s report has given law enforcement agencies the green light to go after former SABC COO Hlaudi Motsoeneng for his role in clinching a deal between the state broadcaster and Gupta media house TNA. He recommended that Motsoeneng and former CEO Lulama Mokhobo be investigated over possible contraventions of the Public Finance Management Act in respect to their roles in the “breakfast briefings” agreement between the SABC and TNA Media.

“I cannot help but remember … Motsoeneng’s evidence in regard to the SABC and the MultiChoice contract because in his evidence [he] told the commission how he enjoyed curry at the residence.”

The report noted that former minister Faith Muthambi had handed control of SABC editorial operations to Motsoeneng, thus allowing him “to act above the law”.

Zondo said: “The costs incurred by the SABC for the TNA broadcasts, coupled with the provision of the relevant services to TNA by the SABC, in the amount of approximately R4,268,887 between April 1 2011 and March 31 2017, should be recovered from any of the assets belonging to TNA or any assets held by the members of the Gupta family.”

In her testimony and affidavit, Mokhobo, who joined the SABC as group CEO in 2012, said at first it was not clear to her under what circumstances the TNA started broadcasting jointly. The TNA breakfasts were broadcast exclusively on the SABC with government departments paying either the SABC or TNA to appear on the state broadcaster, at a cost of millions of rands.

Mokhobo told Zondo that the SABC had spent more than R20m in facilitating these events. He found that “TNA derived more benefit in respect of the outcomes of the contract than the SABC”.

Another SABC employee, Yolande van Biljon, told Zondo that the SABC spent about R4m on outside broadcasts for the breakfast events that were covered for TNA.

Van Biljon’s testimony corroborated Mokhobo’s version of events, “that these breakfast shows increased and they were held prior to the contract being entered into. This demonstrates that the contract was extended well beyond the 24 months agreed to in writing and it’s against the public procurement processes sanctioned by the National Treasury and those of the SABC itself,” said Zondo.

He recommended that “the SABC should

consider instituting civil proceedings against TNA Media or any of its directors and recover all the costs incurred by the SABC including disgorgement of profits made by TNA Media in relation to the breakfast shows”.

It is not clear how the money will be recovered as the New Age newspaper and ANN7 television channel have closed down and the state is in the process of extraditing the Gupta family.

Ace Magashule, Mosebenzi Zwane

Zondo wants law enforcement to probe whether former Free State premier Ace Magashule and his ally, one-time Free State agriculture MEC Mosebenzi Zwane, contravened any laws in the roles they played in the failed R37m Estina dairy project in the Free State town of Vrede.

“Consideration [should] be given to seeking legal advice about instituting legal proceedings against Mr Mosebenzi Zwane and Mr Ace Magashule to recover such monies ... that were lost by the department of agriculture & rural development as a result of their failure ... to perform their legal obligations.”

He has ordered that the former head of the Free State agriculture department, Peter Thabethe, be held liable for the role he played “in causing the department to lose millions of rand in taxpayers money”. Law enforcement agencies should also investigate the roles played by any of the Gupta family members, their associate Ashok Narayan and the directors of Estina with a view to criminal prosecution.

Criminal charges

Two Gupta associates linked to the failed Estina project, Kamal Vasram and Saliesh Indurjeeth, appeared in court in May on charges of fraud, contravening the International Trade Administration Act and the Exchange Control Act, and on charges arising from a joint investigation by the South African Revenue Service and Investigating Directorate.

This is one of several state capture matters that are already before the courts. The accused include Thabethe; another former head of the provincial agriculture department, Limakatso Moorosi; a co-director of Gupta-owned Islandsite Investments, Ronica Ragavan; former Transnet board member Iqbal Sharma; Nulane Investments employee Dinesh Patel; and former Free State agriculture department CFO Seipati Dhlamini.

They all face charges of fraud and moneylaundering. An additional charge of contravention of the Public Finance Management Act was added for the former government officials.