By: Sello Theletsane
JOHANNESBURG- Today, the Patriotic Alliance’s chief whip for the City of Johannesburg (CoJ) Council, Cllr Ashley Sauls, laid criminal charges against CoJ Executive Mayor Moloantoa Geoffrey Makhubo at the Sandton Police Station.
In his affidavit, Sauls pointed out that abundant and credible evidence exists against Makhubo if one considers all the evidence before the Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud alone.
According to PA NEC member Kenny Kunene, Makhubo – who has previously served as the ANC Greater Johannesburg Region Treasurer and as the City of Johannesburg (CoJ) Finance MMC – benefited unduly from a corrupt conflict of interest with Regiments Capital and technology giant EOH Holdings, through his own company, Molelwane Consulting, and other entities.
“He lied to the media in 2018 about having resigned as a member of Molelwane
Consulting, which he is still a director and controlling shareholder of, and as a director of all other companies in November 2011”, said Kunene.
“On 27 November 2020, Zondo Commission leader Adv. Matthew Chaskalson led evidence on payments made by Regiments Fund Managers to Molelwane Consulting. More than R35 million was paid between 2008 and 2016. During that period, Makhubo was the treasurer of the ANC’s Joburg region. For another part of that period, he was the
city’s Member of the Mayoral Committee for Finance, during which time he was party to recommending that the city should maintain its contracts with Regiments. By doing so he personally, and handsomely, benefited financially from that ongoing relationship”.
“An amaBhungane media investigation had already uncovered a secret agreement to
pass 10% of Regiments’ earnings from CoJ on to Molelwane Consulting. The contract
had been awarded to Regiments Capital in 2006, and in 2011 it became a conflict of
interest for Makhubo to oversee the city’s finances AND benefit from one of its largest contracts. At the time, Makhubo avoided accusations of conflict of interest simply by lying about resigning from Molelwane, which he later – under uncomfortable cross- examination from Adv. Chaskalson, admitted he had never in fact done,” said Kunene.
“At least R7.1 million was transferred to Makhubo’s personal bank account from these disgraceful payments to Molelwane Consulting. As amaBhungane has itself reported, ‘By [falsely] claiming that he resigned ‘to deal with
real or potential conflict of interest’, [Makhubo] showed an appreciation for the fact that remaining a member of Molelwane – as he did – was a conflict of interest.
“AmaBhungane has also correctly asserted that Makhubo clearly engaged in a quid pro
quo with both Regiments and EOH (of which more below), and that both companies paid him to wield his political influence in their favour.
According to Kunene, as for EOH Holdings (the country’s largest technology group), the Zondo Commission heard credible evidence in late November 2020 that one of its subsidiaries, EOH Mthombo, bankrolled the ANC in Johannesburg around the time the City had a valuable
tender to upgrade its IT infrastructure.
“ENS Forensics managing director Steven Powell testified on 25 November 2020 about a 2016 tender to upgrade the city’s SAP system, worth R404 million. Prior to this, the company had paid R1.5 million to the ANC in October 2014 ahead of its regional conference. This went towards funding ANC accommodation costs, employee stipends, transportation, and merchandise at ANC events. Makhubo had been at the forefront of regularly soliciting such donations when he was ANC regional treasurer”.
Powell revealed that EOH’s revenue from the City of Johannesburg was R250 million a year and the company had a full technical and political strategy for the contract.
Tenders were granted in exchange for donations. No formal tender process was ever conducted before the tenders were awarded to EOH, he also testified. Most shockingly, Molelwane Consulting received donations from EOH too.
“On August 22 2014, Mfundi Mobile Networks paid R70,000 to the ANC greater Gauteng region before paying R80,000 to Makhubo’s company, which had a bank balance of only around R600 before this payment.
“Powell admitted to the Commission of Inquiry that EOH Africa secured several
payments from the City of Johannesburg without any work being delivered to the City.
“A former EOH employee named Patrick Makhubedu (a sales director) was central in making numerous irregular payments to Makhubo’s company without any contracts
being in place between Makhubo’s company and EOH, formerly known as TSS
Management Services.Makhubo wrote various emails to Makhubedu requesting more than R6 million in payments to be made to the ANC’s accounts in 2015 alone.
“At EOH, Makhubedu made the payments through intermediaries Mfundi Mobile
Networks, Molelwane Consulting and another company owned by Makhubedu, Prime Molecular. After EOH transferred the money, it was disguised as “cost of sale” and passed to the ANC.
“In terms of money laundering, the ENS Forensics investigation uncovered the fact that Mayor Makhubo’s personal and business accountant, Reno Nielle Barry, was central to the movement of funds that ended up with Makhubo’s company and himself personally.
“Barry provided accounting services to Molelwane and Mfundi Mobile, along with a
number of other linked entities, and assisted Makhubo and his wife with their personal tax matters,”.
Furthermore, Kunene added: “Makhubedu and Barry are linked as directors in Prime Molecular Technologies Africa, which paid R2.5 million to a company of which Makhubo is a director, Accsolve. Prime
Molecular also paid money directly to Molelwane, while another company with Barry as a director, Grass Farms, loaned money to Makhubo.These transactions mostly happened between 2014 and 2016 when Makhubo was finance MMC in the City, though they continued into at least 2017.
“In 2016, the ANC received a R16 million donation from EOH for local government
election campaigns and several payments to Makhubo’s company. This was after EOH had won the contract of R404 million from the city. Email evidence shows that Barry made payments to Molelwane at the instruction of Makhubedo, supposedly for “work done” via Mfundi Mobile. But this was just a drawdown of funds to favour Makhubo despite Mfundi Mobile never having done any work for the City or EOH. Mfundi Mobile was even found to have directly paid Makhubo’s travel costs of R89,000 and more than R34 million (ex VAT) was paid from EOH to Mfundi Mobile despite no evidence of any work being done.
“Another suspect payment of R570,000 paid in April 2016 directly from EOH Afrika to Molelwane Consulting at the insistence of Makhubedu could also not be linked to any actual work performed by Molelwane Consulting at any point in its history as a
business. The payment was merely noted as “ED for City of Joburg”.
“The damning details of all the relevant payments to Makhubo and companies linked to him can be found in full in the ENSafrica forensic report handed to the Zondo Commission.
It must be noted that EOH reported what ENS Forensics found during its investigation to the Hawks in October 2019 in terms of the Prevention and Combating of Corrupt Activities Act.
However, charges had yet to be laid against Makhubo and the purpose of
this case brought by the Patriotic Alliance is to ensure that the matter is expedited.
“ENS Forensics found widespread irregularities amounting to about R1.2 billion in deals between EOH and various government departments, leaving one to wonder how much more could be uncovered by a concerted investigation by law enforcement.
In conclusion Kunene said: “It is high time that Mayor Makhubo be made to account and taught the lesson that crime does not pay. This case will also be an acid test for our democracy, to demonstrate that holding high office cannot safeguard the holder from accountability and consequences,”