Revenue service is investigating tax fraud at stadium company. Lucky Sindane reports.
Chris Grib, chief executive officer of the controversial project manager of the 2010 Mbombela stadium, Lefika Emerging Equity, has skipped the country after learning that his company is in hot water with the tax man.
The Mail & Guardian understands that Lefika fraudulently obtained a tax clearance certificate with the help of an employee of the South African Revenue Service (Sars) in 2006. The employee has since been suspended by Sars and an investigation is ongoing.
The tax clearance certificate enabled Lefika to bid for 2010 tenders in the Mbombela municipality. When Grib learned about the Sars investigation late last year he vanished.
Lefika is the principal consultant responsible for designing and constructing the new stadium. The company is co-owned by Bobby Motaung, general manager of Kaizer Chiefs and the son of Kaizer Motaung, and Herbert Theledi. Grib’s flight leaves these two directors to answer to Sars.
A senior Sars official confirmed that Lefika is being “investigated for tax evasion” and that the allegations against the company include “corrupting [a Sars] employee who gave them a tax clearance certificate so they could get more business”.
The M&G is in possession of a letter from Sars dated November 7 2007 requesting the Mbombela municipality to submit documents relating to about R100-million the municipality paid to Lefika between July and December 2006.
Sars spokesperson Adriaan Lackay refused to disclose how much Lefika owes. “This is a private matter and Sars cannot publicly disclose any taxpayer’s information. That’s all I can say.”
Lefika is no stranger to controversy. It is also linked to the controversial R1-billion tender for the construction of the Mbombela stadium awarded to Basil Read and Bouygues Travaux Publics. Last year the Mbombela municipality alleged that Lefika failed to declare a conflict of interests when it was appointed to the committee given the task of awarding the Mbombela contract.
Lefika’s relationship with Basil Read started in 2006 when the company was awarded the tender to construct the Kaizer Chiefs stadium. Not a single brick has been laid for the stadium since Lefika, Mogale City, Chiefs and the Gauteng government entered into an agreement in 2003. Lefika failed to raise the R1,2-billion needed for the construction of the Amakhosi stadium, the M&G reported last year.
In addition, the Mbombela municipality established that Lefika was paid R43-million in an irregular transaction. And last year subcontractors appointed by Lefika to work on the Mbombela stadium threatened to go on strike, saying Lefika had not paid R9-million due to them. The municipality had already paid Lefika more than R100-million.
A Mbombela official within the 2010 unit said: “We are tired of Lefika because every time there’s a scandal around 2010 Lefika is involved. We learned that Grib ran away late last year. These guys should get their act together.”
The municipality also alleges that in December last year Lefika wrote a fraudulent letter to First National Bank, using Mbombela’s letterhead, requesting an overdraft. In the letter Lefika claimed that it submitted an invoice to Mbombela in December 2008 that would be paid this month. But acting municipal manager Sigananda Siboza refutes this. “The municipality is not sure if this is the first time that Lefika has tried to defraud the council,” he said.
“This is so unfortunate because we try so hard to correct the wrongs in the council and this happens. We have to establish if this was indeed the first time they had requested funds. On the issue of Sars, I’m not aware that they have been evading tax and that they submitted a fraudulent tax clearance certificate. We have to go back to our files and we will take it from there,” Siboza said.
The Mbombela municipality is expected to conduct an internal audit related to the allegations.
Motaung refused to comment in detail, saying that “there have been all sorts of allegations against Lefika and the matter is with our legal department”. Numerous attempts to get comment from Lefika’s Theledi have proved fruitless.
ANC’s Nyoni fingered
The ANC’s deputy chairperson in Ehlanzeni region in Mpumalanga, Peter Nyoni, has been fingered as the party’s enforcer in its battle with murdered Nelspruit council whistle-blower Jimmy Mohlala.
Mohlala was gunned down outside his home in KaNyamazane early this month. He blew the whistle last year on the alleged abuse of power and corruption relating to the construction of Nelspruit’s R1-billion Mbombela stadium, intended for use during the 2010 World Cup.
In particular, he initiated a forensic investigation which found that municipal manager Jacob Dladla was implicated in wide-ranging misconduct relating to stadium contracts. Dladla was suspended and is under council investigation. Last year the provincial ANC called for Mohlala to be axed.
The Mail & Guardian is in possession of a memorandum forwarded by Mohlala and 30 other Nelspruit councillors to the ANC provincial executive committee in November last year which accuses Nyoni of trying to strong-arm the council into reinstating Dladla.
It refers to his “intimidation of councillors” who would be “fired within a short space of time” if they resisted ANC instructions.
It also says Nyoni referred to Mohlala and the Nelspruit mayor, Lassy Chiwayo, as “elements to derail ANC positions, in particular [with regard] to the reinstatement of municipal manager ... Dladla”.
The memo also accuses Nyoni of “sneaking” documents relating to Dladla to the ANC caucus, and of labelling fellow ANC members “Shikota members who will vote DA during council meetings on the item for recall of suspended Dladla”.
The memorandum itself then became a source of conflict. The M&G has reliably learned that Nyoni told the council’s chief whip, Mfanasibili Nkosi, to withdraw it or be removed from his position.
This week Nkosi refused to confirm or deny that he had been threatened, saying: “I’m scared because I don’t know what will happen next. I’m doing this [keeping silent] for the sake of my family.”
The M&G was told that Nkosi initially bowed to pressure and withdrew the memorandum. However, he was persuaded to change his mind after an angry 12-hour meeting with other councillors, led by Mohlala, and ANC officials.
The meeting took place just before Christmas—barely a week before Mohlala’s murder. It is understood that Nyoni and a group of pro-Dladla councillors held secret meetings at the offices of the Mbombela Housing Association in October and November at which they decided to press for Dladla’s reinstatement.
An official close to the council said Nyoni wanted Dladla reinstated because he would then become the latter’s deputy. But the source also suggested that the push for reinstatement also came from ANC chairperson and Mpumalanga premier in waiting, David Mabuza. “When Mabuza was elected chairperson last year we were told Dladla was definitely coming back. This was also discussed at Mabuza’s house on December 31 at a party for his friends.”
Last September about 20 councillors called for a special council meeting at which a motion to reinstate Dladla would be tabled. They claimed that the disciplinary action against him was a waste of taxpayers’ money. However, a report by independent attorneys Kruger-Moeketsi Inc, also leaked to the M&G, dismissed the claims, saying that “the charges against Dladla are weighty and serious” and, if proved, would justify his dismissal.
It said “persons with an ulterior political motive may have raised questions about taxpayers’ money having being wasted on this disciplinary hearing”. It also noted that all previous postponements of the disciplinary process had been at Dladla’s request.
Contacted on Wednesday for a response, Nyoni said: “I don’t owe you anything, so whether I respond to you or not is entirely up to me.” He said he could not respond before the end of business on Thursday—after the M&G‘s print deadline.
“I don’t care about your deadline as I’m also working,” he said. But he added: “I can stop the car now and talk to you if I want to, but I don’t.”