A former acting municipal manager of Makhado municipality in Limpopo, Johannes Kandwendo, is to face disciplinary action over his involvement in the irregular investment of R63m at VBS Mutual Bank.
This follows a council resolution late on Tuesday afternoon in which the ANC indirectly supported a motion by the DA to push Kandwendo out of the municipality. Kandwendo is currently director of community services at the municipality.
In August this year, the DA submitted two motions of no confidence against Kandwendo and Mayor Mildred Sinyosi, respectively, for their role in the depositing of R63m at VBS without proper procedures being followed.
At a special council meeting late on Tuesday, the ANC instead insisted that it first table a draft resolution before the DA motion against Kandwendo could be heard. In the draft resolution, the ANC called for the suspension of Kandwendo and subsequent disciplinary action against him.
The resolution was adopted by the council and Kandwendo has now been given seven days to give reasons why he should not be suspended.
However, a motion to remove Sinyosi as the mayor failed. The ANC, which is a majority party in the council, voted against the motion.
‘The buck stops with him’
The DA’s Geoffrey Tshibvumo said: “The results of the motion of no confidence against Sinyosi were a show that they (ANC) will continue to defend the indefensible. All the shenanigans about VBS investment happened under her nose.”
Tshibvumo also said his party was happy that Kandwendo would face the music.
“We are happy that the ANC reacted to our motion. He was an accounting officer at the time and the buck stops with him.”
A week ago, the Giyani municipality dismissed its chief financial officer (CFO), Hitler Maluleke, for, among other contraventions, his involvement in the investment of almost R160m at VBS. He was fired after a disciplinary hearing.
Maluleke, who is also a former CFO at Makhado municipality, was also accused of having authorised payments for projects that were not completed.
The ANC’s integrity committee has since called on all its members implicated in the VBS heist report to resign.
However, Limpopo ANC treasurer Danny Msiza, who is also seriously implicated in the report, has since indicated that he will go to court to challenge the document.
Although many of them have lost everything, the brave women and men from Working on Fire continue to battle the flames that have engulfed the Southern Cape.
Working on Fire spokesperson Lauren Howard said that at least 16 firefighters had been personally affected by the fire.
“They lost everything,” she said.
The firefighters had been working tirelessly in stressful conditions, she said. “But they have a strong bond with each other and they just pull through.”
One firefighter from the Eastern Cape said that containing the fires had been extremely challenging.
“It was my first time fighting such a big fire and the mountains have very steep slopes,” Nkululeko Ngamlana said.
“We are well-trained firefighters so we are managing to cope under these conditions.
We always sing to keep our spirits up so that we don’t think about home – so we can focus on what we are doing.”
New fires
Around 129 firefighters from the Western Cape, Eastern Cape and Free State have set up their headquarters at Rosemoor Stadium.
When News24 arrived at the stadium, firefighters were lining up to collect their supper while others prepared for the night shift on the mountains.
Howard said that it had been a particularly difficult day for the firefighters.
“We had a couple of new fires starting up in the Knysna area. Rheenendal and Karatara have been affected,” she said.
“Our firefighters have been deployed as far as Grootvadersbosch and Swellendam area.”
On Tuesday, 840 people were evacuated from Farleigh, Keurhoek, Rheenendal and Karatara and have been stationed at various community halls.
Knysna fires still raging
Earlier that day, two adults and six children from Karatara were reported dead as a result of the fire.
Police spokesperson Malcolm Poje said that an inquest docket had been opened into the cause of the fire.
Poje said that there was no further information regarding the deaths and that the death toll remained the same.
“The fires in George and the surrounding areas have been contained. The weather conditions from last night helped the George area. Fires in the Knysna area are still going,” he said.
ANC secretary general Ace Magashule was mum on Monday on events unfolding in the Free State and the controversy surrounding Home Affairs Minister Malusi Gigaba, however, he was full of promises for Midvaal residents.
Magashule paid visits to the residents of Mamello and Sicelo and held meetings in the two areas as part of the ruling party’s blitz campaign in Gauteng.
Surrounded by reporters for the majority of his tour in both areas, Magashule refused to address questions on allegations around missing artworks in the Free State and claims that the province was experiencing serious financial challenges.
Magashule was at the helm of the province as premier and ANC provincial chairperson until he was elected as the party’s secretary general in December 2017.
“Let me not respond to allegations,” said Magashule.
“No, no… I am not addressing anything about Free State,” he insisted when pushed for an answer.
#Magashule tells the crowd it’s his first visit here, doesn’t know their issues. Says he just wants to hear from them. No promises. Residents want to show him their toilets, refusing to be told he’ll come again & off they go @TeamNews24pic.twitter.com/yLMrE2DyRd
His refusal to comment comes on the back of his confirmation last week that he had been questioned by Public Protector Busisiwe Mkhwebane on the controversial Vrede dairy project as well as recent reports on the Free State Development Corporation (FDC), which violated financial regulations by placing a R100m investment with the now collapsed VBS Mutual Bank.
News24 has established that the FDC, which is state-owned, ignored or bypassed provisions in the Public Finance Management Act and Treasury regulations by placing the investment with VBS.
Also on the blitz campaign on Monday were ANC leaders deputy secretary general Jessie Duarte, who was in Ekurhuleni, chairperson Gwede Mantashe who was in the West Rand, treasurer general Paul Mashatile and other national executive committee (NEC) members who visited communities across Pretoria.
The visits are part of the electioneering machinery of the ANC as South Africa gears up for the 2019 general elections. Both ANC president Cyril Ramaphosa and deputy president David Mabuza were not part of the campaign as the president was at the G20 summit and his deputy was on leave.
Magashule had a lot of promises for the residents of Midvaal residents, an area governed by the official opposition the DA.
He committed to helping young people who could not afford to study further than matric and said that he and the ANC would help get them into institutions of higher learning, either in the country or in one of the Brics countries.
‘I came to hear from you’
He also promised the residents of far-flung Mamello that he would return with Ramaphosa and Gauteng Premier David Makhura in two weeks and that he would bring along officials from social services and home affairs to help community members register for identity documents and social grants.
“There’s a power station here, there is electricity but these people don’t have electricity, no toilets, no school…. they have to travel to Heidelberg,” said Magashule as he listed the challenges facing the small community.
The secretary general was initially met with some hostility when he arrived in Sicelo, also in the Midvaal, however, he managed to win residents over.
“I have no promises for you, it’s my first visit here. I came to see and to hear from you, regarding the needs of this community,” said Magashule, who said he would return to the area as well.
However, residents refused to let him leave after addressing a meeting, instead inviting the ANC secretary general to see their living conditions.
Residents took him on a tour of their informal settlement, where he walked over sewerage on the roads. He was also shown exposed live wires on the ground.
Gigaba matter ‘private’
“This is heartbreaking. I cannot believe you live in such conditions,” said Magashule.
Magashule told the people of Sicelo that he would bring Ramaphosa and Makhura to the area.
“When people say, ‘Don’t go there, people are angry’, I say, ‘No! I am going’,” he said, telling residents he was happy to have met with them.
Magashule also committed to one day returning to Sicelo to help some of the informal settlement’s struggling students get into institutions of higher education.
Earlier, Magashule was asked to comment on claims made by Home Affairs Minister and ANC NEC member Gigaba that he had reported to the State Security Agency that he was being blackmailed by anonymous people who had illegally obtained a 13-second video which showed Gigaba engaging in a solitary sexual act.
“I can’t enter personal and private matters,” said Magashule.
The death toll in the wildfire in the Bosdorp community has risen to eight people, police said on Monday night.
Captain Malcolm Pojie said intially four people were reported dead and later it was confirmed that the fatalities increased to eight people.
Pojie said it was reported that a pregnant woman was among those who were later reported dead.
The Garden Route District Municipality had earlier said the wildfire in the Bosdorp community has claimed four lives.
“It is with great shock and deep sadness that we have been informed of four fatalities in the Bosdorp community due to the wildfire,” the Garden Route District Municipality noted in a tweet.
It said that EMS reported that one one adult, two toddlers and one baby died around 18:00.
The municipality had earlier said the fire was moving through Karatara, in the Kraaibosh area above Rheenendal.
It said three structures had burned down.
Rheenendal Fire Management Units FMU’s have been activated, according to the municipality.
Residents were being evacuated to the Karatara Community Hall.
Over 200 people were currently in the hall, according to the municipality.
The George and Garden Route District municipalities stated in a joint statement earlier that there were ongoing active fires in George in the Outeniqua Pass area, reported News24.
In two areas close to the pass, the traffic department and police were aiding a precautionary evacuation.
“George Municipality is, as a precaution, evacuating residents in Blanco Golden Valley and Step-Aside,” according to a municipal alert.
“We request people to move carefully and not to panic.”
Over the last week, firefighters in the Western Cape have been battling blazes in Kosovo informal settlement, Khayelitsha, Overcome Heights in Vrygrond and along the Garden Route.
Outeniqua Pass on fire (Supplied by Georgiete Staan Saam Facebook page)
Outeniqua Pass on fire (Supplied by Georgiete Staan Saam Facebook page)
Outeniqua Pass on fire (Supplied by Georgiete Staan Saam Facebook page)
George is in a bad state??This whole town is covered by smoke and ash from the fire on the mountain??We’re struggling to breathe, visibility is very poor. The outeniqua Pass remains closed for traffic. Motorists are advised to proceed with caution. #GeorgeFirespic.twitter.com/HTj4fnt1Ps
The country has been provided with a “window of opportunity” to change its trajectory, but to do this, it will require a sense of urgency and a “narrative based on a culture of integrity”, public enterprises minister Pravin Gordhan says.
Writing for the Sunday Times, Gordhan said interventions to save state-owned enterprises (SOEs) must go further than simply replacing boards: he said structural challenges must also be addressed.
“Over the past seven months, we have been piecing together the story of how our SOCs were repurposed to benefit a few, with repercussions for the rest of the country which has suffered financially and lost faith in the integrity of those governing the country. There were many political office-bearers, civil servants and other professionals who were either direct beneficiaries, or simply turned a blind eye.
“We have learnt that just changing compromised boards will not be enough to restore SOEs. Interventions must go further to rid institutions of complicit managers,” he wrote.
Since his appointment by President Cyril Ramaphosa in February, Gordhan has overhauled the boards of several SOEs, where allegations of corruption and maladministration have been rife.
He appointed new leadership at Eskom and made changes to the Transnet board. He also appointed an interim board at Denel. SOEs have widely been considered to be the sites of state capture. Gordhan previously estimated that the country may have lost more than R100bn to state capture.
In the Sunday Times, Gordhan said cash injections will not solve the problem. Patronage networks must also be unraveled, he warned.
“Dismantling the destructive business-state patronage networks that have embedded themselves across public enterprises – and indeed across all spheres of government – will require time, difficult choices and bold action by leaders.
“We need to consider: what are the objectives of SOEs? How do we fix their governance? How do we create fiscal sustainability? How do we strengthen the role of the state as a shareholder? How do we professionalise the boards and management? How do we ensure transparency and accountability? Are our SOEs fit for the future?
“Right now, we have a window of opportunity to change the country’s trajectory, but this requires the voice of the citizenry, it requires a sense of urgency and it requires a new narrative centred on a culture of integrity,” Gordhan said.
DA leader Mmusi Maimane says the ANC must repay the R2m donation it allegedly received from VBS Mutual Bank in seven days.
This follows a report in the Sunday Times that the ANC received the donation from VBS bosses, who reportedly discussed this in WhatsApp texts seen by the paper.
The ANC told the Sunday Times that it would launch its own investigation into the allegations, and said it only had a record of R250 000 received from VBS to buy a table at its R106th birthday celebrations in East London, earlier this year.
The ANC reportedly said it would pay back the money, should the Sunday Times’ report prove to be true.
According to the Sunday Times, it is alleged that minister for cooperative governance and traditional affairs Zweli Mkhize asked for a R2m donation from Vele Investments, majority shareholder at VBS, in 2016, during the ANC’s election campaign.
On Sunday, the DA called the donation a “kickback” and called on President Cyril Ramaphosa to lay criminal charges against Mkhize. Maimane called on the National Prosecuting Authority to “act against those in the ANC who stole from the poor”.
Maimane said Ramaphosa must instruct ANC treasurer-general, Paul Mashatile, to ensure that the party pays back the R2m within seven days.
“President Ramaphosa has now been afforded a golden opportunity to prove to South Africans that he is more than just hot air and empty promises. We hope the President takes this opportunity and acts by laying criminal charges against his fellow comrades, and ensuring this R2 million kickback to the ANC is paid back,” Maimane said.
Maimane also said he will be asking questions in Parliament next week about when Ramaphosa became aware of the VBS scandal.
Two weeks ago, City Press reported that Ramaphosa knew about corruption at the bank in early 2017 but failed to take action.
But Ramaphosa’s spokesperson, Khusela Diseko, vehemently denied this. In a statement, she said, “President Ramaphosa has no knowledge of any meeting where he is said to have met any person associated with VBS Mutual Bank where he was purportedly briefed on the matter. Likewise, the claim that President Ramaphosa was forewarned about the impending implosion of VBS Bank is unsubstantiated.”
A criminal corruption investigation will be conducted after Chinese electric bus company BYD paid for accommodation and meals and a high-speed train ride for City of Cape Town (CoCT) transport officials on a trip to China – a year before the company was awarded a tender for a pilot project as a “sole provider”.
This trip was in August 2015, but the project was put out to tender in February 2016.
In August 2016, the tender was awarded to BYD.
Part of the deal with BYD was that they would build a plant in Atlantis, but this has thus far not materialised.
This is one of the alleged cases of corruption and maladministration that law firm Bowmans investigated at the behest of the City of Cape Town.
After the Cape Town City council adopted the report in a dramatic council meeting on Thursday, criminal investigations will be instituted against Cape Town Mayor Patricia de Lille, Mayco member for transport Brett Herron and City officials, including suspended transport and urban development authority commissioner Melissa Whitehead.
De Lille is however not directly implicated in the BYD affair, although there are allegations that she protected Whitehead.
De Lille informally met an official from BYD, but told Bowmans she did not remember the conversation.
Trip to China
The story starts in October 2014, when Herron and Deputy Mayor Ian Neilson found themselves on an electric bus in Hangzhou, China, attending the Sister City Mayors’ Conference.
The Bowmans report states: “BYD presented their electric-powered bus technology to them, in which Herron apparently expressed an interest”.
Correspondence between Herron, City officials and BYD commenced.
“At that point in time, it is apparent that the CoCT’s interaction with BYD was focused on attracting them to invest in the Atlantis SEZ (special economic zone) rather than on purchasing electric buses from them,” reads the report.
Eventually, the correspondence between the City and BYD resulted in an invitation to visit BYD in China.
The report finds that as the arrangements for meeting with BYD in China were being made, it “is apparent that BYD had already at that stage been identified as potential suppliers of electric buses to [the City’s transport department] by at least Herron and Whitehead and that there had been an exchange of information in respect of specifications and pricing.”
The City’s payment documents indicate that it paid for visas, airfare, hotel accommodation for five nights in the Chinese city of Shenzhen and subsistence and travel allowances for the three officials – Herron, Whitehead and the City’s fleet and asset manager James Groep. No evidence of payment for expenses incurred in relation to return travel between Shenzhen and Changsha – where BYD is based – nor any accommodation in Changsha appears in the City’s payment documents.
The report further states that there is no evidence of any credit granted in respect of the accommodation for August 4, 2015, when the City’s delegation was hosted by BYD in Changsha.
In Bowmans’ interview with Groep, he stated that the only BYD electric bus plant they had visited was situated in Changsha.
“He later, via email, identified the hotel that they had stayed at as being the ‘Huawen Yuexi Hotel’ and stated that, while he was not involved in arranging the trip, he assumed that BYD had paid for both the train travel between Shenzhen and Changsha and the hotel accommodation in Changsha,” the report reads.
Feedback report‘largely silent’
The delegation provided a feedback report to De Lille.
“Notably, the feedback report is largely silent on the potential foreign investment by BYD, which constituted a considerable portion of the motivation for this travel,” reads the report.
Bowmans found that no transport and accommodation expenses appear to have been incurred by the City in respect of the Changsha visit, nor were expenses for the Changsha visit recorded in the trip approval report or the feedback report.
Whitehead told Bowmans that she didn’t include it in the feedback report as it was not a “travelogue”.
In De Lille’s response to Bowmans, she states that she was not aware that BYD paid travel and accommodation costs.
“The motivation for the visit to BYD explicitly stated that the costs would be paid for by the City,” reads De Lille’s response.
“The mayor would not have approved the overseas travel and the motivation for the visit to China had she been aware that BYD was paying for any of the costs related to the visit to BYD. We point out that the travel arrangements for the visit were made by officials tasked with this duty. The mayor accordingly accepted that the officials would act in accordance.”
In his response to Bowmans, Herron said he did not know BYD paid for the Changsha trip and therefore did not declare it.
“Our client (Herron) was aware that officials were in the very early stages of exploring whether BYD could be sourced as a ‘sole provider’ prior to the trip to China. However, it is important to note that our client is not involved in any procurement/tender process, and was certainly not involved in any facet of this specific process either,” reads Herron’s response to Bowmans.
“Our client takes exception to the fact that he is accused of receiving benefits from BYD. Our client did not receive any benefits from BYD and he is not aware of any official from the City of Cape Town that received any benefits. His rights in this regard are specifically reserved,” Herron’s response reads.
“BYD did supply lunch in their boardroom on a couple of occasions, and the delegation was taken out to dinner on a couple of occasions during the trip. If this is considered a separate benefit to the hosted trip itself, which our client denies they are, then those are the only benefits that he received during this trip.”
White also denied that the accommodation or travel constituted a benefit.
“I am not aware of any benefits which were received by any City official, including myself, from BYD and/or any of their agents and/or representatives, other than the token painted teapot which I declared,” reads her response Bowmans.
Whitehead said BYD arranged the itinerary, which indicated that we would be staying in Shenzhen and travelling to Changsha for a day trip. BYD then changed the itinerary, necessitating the overnight stay in Changsha.
“BYD changed the programme after the City had already paid. The City could obviously not pay twice or forfeit the monies which had been paid. BYD was informed of this and indicated that they would pay for the accommodation in Changsha as they had changed the itinerary,” reads her response.
“The City therefore did not pay twice or pay a penalty for changing a booking already paid for.”
The report states that when Herron, Whitehead and Groep returned to Cape Town on August 7, 2015, “the attempt to procure electric buses upon the basis that BYD was a single source provider, accelerated considerably”, according to evidence found in the contents of emails between BYD and City officials and confirmed in recorded interviews with the various officials involved in the process.
‘Fruitless and wasteful expenditure’
Bowmans came to the conclusion that “the omission of any mention of the delegation’s trip to Changsha, being the location of the only electric bus manufacturing plant and two independent bus operators visited by them (key objectives of the journey as stated in the trip approval report), may have been intentionally designed to avoid disclosure of BYD’s payments in that regard”.
It also found that Whitehead’s submission that the feedback report was not meant to be a “travelogue” as a reason for omitting their trip to Changsha, had little merit and that Herron’s submission that he did not prepare the report, but signed it, could not absolve him from liability for misleading De Lille and the City.
“That he admits to have known that five nights’ accommodation were booked in Shenzhen, while also admitting to spending a night in Changsha without ever asking questions about the hotel arrangements and later endorsing a report that inexplicably did not disclose the Changsha visit, supports this view,” reads the report.
“His averment that the trip was arranged by Whitehead’s office appears to be incorrect. The contact person reflected on the trip Approval report is Paulse, the Executive Support Officer assigned to his office.”
Bowmans said that in light of the meals BYD paid for, a reduction of the subsistence allowances paid to them ($115 per day) was appropriate in terms of the prescripts of the 2015 Department of Public Service and Administration’s manual.
Bowmans also said, since the delegation only spent four instead of the five nights booked in the Crowne Plaza Hotel in Shenzhen and since there appeared to have been no attempt to recover or limit wasted costs, fruitless and wasteful expenditure of R6 600 had been incurred.
Bowmans also found that evidence existed that Whitehead continued to deploy and direct considerable City resources in pursuit of achieving an “overtly irregular procurement process”, despite recorded warnings by three City officials that the single source process in the circumstance was untenable.
“We submit that Whitehead ostensibly thereby caused fruitless and wasteful expenditure and that such conduct amounts to an act of financial misconduct,” the report reads.
Bowmans also found that Whitehead’s and Herron’s own versions that they had conducted prior research with other electric bus manufacturers, confirmed their knowledge that BYD was not the only source of electric buses at that time.
“It follows thus that any endeavour to procure the buses from BYD upon a single source deviation would therefore have been intrinsically irregular,” the report reads.
Recommendations for disciplinary proceedings
Bowmans also found that Herron was by his own admission aware that BYD was a potential supplier of electric buses to the City, “but nevertheless, for reasons he has failed to adequately explain, involved himself in pre-engagement discussions with them”.
However, Bowmans stated they did not find evidence that he influenced the procurement process in contravention of the Municipal Finance Management Act.
Bowmans recommended that “sufficient evidence existed to sustain a reasonable suspicion that” the Prevention and Combating of Corrupt Activities Act (PCCA) might have been contravened.
The City is obliged to report this to the police.
“It is in any event likely that much of the information required to establish the precise facts of this matter, will only become available by virtue of the powers afforded [in] a criminal investigation,” the report reads.
Bowmans further recommended that the City institute disciplinary proceedings against Herron, Whitehead and Groep for contravening the City’s supply chain management policy by accepting hospitality from BYD and because they failed to declare it, as well as for incurring fruitless and wasteful expenditure by not using the booked hotel accommodation.
Another recommendation was that the subsistence allowances paid to Herron, Whitehead and Groep be recalculated and measures be instituted to recover any overpaid amounts.
Bowmans also recommended that disciplinary action should be instituted against Whitehead for an act of financial misconduct for her deployment and direction of the City and achieving an irregular procurement process in relation to the single source procurement of BYD electric buses during August 2015.
They also recommended that the City establish a special committee to determine the extent of the influence of Herron’s involvement in the BYD procurement and whether such conduct amounted to a contravention of the Municipal Finance Management Act.
‘I have nothing to hide’
In a statement on Thursday, Herron expressed his outrage at the Bowmans report. A day before, De Lille also questioned Bowmans’ credibility.
“I have handed the report to my lawyers and I intend to take whatever steps are deemed necessary to clear my good name. I shall pursue a claim for damages against those who have sought to unlawfully and without just cause insult and defame me and damage my reputation,” Herron said.
“The one Bowmans report states that my involvement in the procurement process ‘has not been sufficiently established’,” he said.
“This is a flagrant misrepresentation of the indisputable facts contained in their own report, and is therefore a false conclusion as the report contains no allegation, no prima facie evidence, no direct evidence, no inference nor any suggestion by any person or document that I was involved in the procurement process at all.”
“As a result I can only surmise that it is based on their own unchecked bias, alternatively it is based on external influences that are not disclosed in the report. The conclusion that something corrupt happened, or that I influenced the procurement process, is so poorly constructed, it is hard to believe it was properly considered by a legally qualified person before being presented.”
He also said he would not repay any costs as he “was in no way responsible for the last-minute changes which resulted in the change to the itinerary and the wasted hotel cost”.
“I wish to state categorically that I have nothing to hide and that my conduct at all times has been beyond reproach.”
De Lille has consistently described the allegations against her as a smear campaign.
