National

Juju cut his teeth on tenders at school

Fiona Forde

This week sees the publication of Fiona Forde's An Inconvenient Youth: Julius Malema and the 'New' ANC. Read an extract here.

I thought back to a conversation I once had with Julius Malema in the wake of a heated political moment. I can’t remember what it was he had done—no doubt spouted off an insult of some sort. But whatever it was, he found himself walking on the wrong side of the suspended [ANC disciplinary] sentence that was hanging over his head, yet he knew, or at least he thought he knew, he was untouchable among his peers.

“They can’t get me,” he said as he laughed heartily. “I’m the one with the nine lives. They can’t bring me down.”

He was ahead of the game at the level of the party, but he was embroiled in a war with the media who were digging into the dark areas of his life.

Back off was his standard response. “I’m a private citizen.” It was the shield he believed made him untouchable in the eyes of the law as well, and which forced him to seek an urgent interdict [which he lost] against City Press when it tried to expose his wayward ways half way through 2011.

In an ironic twist of fate I had sent Malema an extensive list of questions that same week, which would give him his right of reply on allegations this book would make before it went to print.

They were drafted by me but sent with a covering letter from the law firm acting for my publisher and myself.

He called me
I didn’t expect to hear from him again, as the letter had instructed him to respond via the lawyers. But that didn’t stop him from calling me.

“But why a lawyer’s letter?” he wanted to know. “Why can’t we just sit down and talk?

” You can bring your little notebook and your pencil,” he went on. “And you can bring a recorder. It will all be on the record. I have no problem answering these questions.”

“So what happens if I raise an issue about some incident or other that you deny, what then?” I asked.

“You stay with your story and I stay with mine,” he responded.

With the lawyer’s go-ahead, I decided to take Malema up on his offer and what follows is the upshot of that conversation.

Kicking doors
“The ability to make business is one’s willingness to go and kick doors,” he tells me. “That’s what I have done in the past when I was young.”

He began to dabble in tenders when he was still a teenager and attending the Mohlakaneng High School in Seshego. Malema and his friends competed against the teachers to provide the school uniforms for the few hundred learners and the teenagers won the bid.

“But we underpriced and we didn’t make a profit,” he says, adding that he didn’t influence the outcome in any way. “I was only at the SRC level then.”

Not long after that he began to rise through the ranks of the Congress of South African Students (Cosas) and along the way he met Pule Mabe. He is the treasurer general of the ANC Youth League today but back then Mabe was a journalist for the Mail & Guardian. Their paths continued to cross when Malema, at the age of 20, moved to Johannesburg after he became the president of Cosas.

That was in 2001 and around the time that Mabe began to give up on the idea of journalism. He secured a stint in the public sector before landing a job at the Passenger Rail Agency of South Africa. By then Mabe was involved in many business deals. He and Malema had a lot in common and they established a good rapport.

Pule’s got the moves
“Pule at that time was a bit advanced in business,” Malema says. “He had a Golf, a Jetta, a Combi. And he started introducing me to those types of opportunities.”

But he insists that it was Mabe who was eliciting most of the tenders and that he was just helping out. And he was not involved in all of them, he firmly pointed out. Only a few.

One of those was a tender they won to brand plastic water bottles for Lepelle Northern Water, in their home province of Limpopo.

“This was not me [who got the tender]. Pule came with it. He included me,” Malema says. On that basis, one might assume that he was brought in to do some work for a fair fee in return. But Malema claims he did it for nothing: his version is that his toil and troubles did not earn him anything at all.

Another deal that came their way was the co-ordination of entertainment for the inaugural ceremony of a mayor of the Waterberg district municipality, in the southern stretches of Limpopo.

“Pule was involved in entertainment,” he explains. “And we needed to market his company. We were literally knocking on doors from one comrade to the other. That’s how we got that tender in Waterberg.

Second-hand car
“When the money was paid, I asked Pule to give me his car,” he says. So Mabe pocketed the money and Malema got his first car, a second-hand white Citi Golf.

Towards the end of 2003 Malema packed up his bags and piled that small Golf high with his possessions and headed home to Polokwane after his term as Cosas president came to an end. That December he was elected provincial secretary of the youth league based in Polokwane.

“You know, we were suffering financially at that time,” he says. Sello Moloto had replaced Ngoako Ramathlodi as premier “and the government was not so available to me. I was not so powerful then.”

Already I can see that we will soon hit the spot where he will have to stick to his story and I to mine. Because he was not far off his 23rd birthday when he started out as the provincial secretary of the league and, despite what he says, friends remember how he began to live life to the full around then, making a name for himself around the city as he scaled the social ladder.

He developed a taste for nice shoes and good clothes and before long an attachment to designer labels. And that was also when the waistline began to bulge as he feasted off his new lifestyle. Malema was becoming a new man.

So, if there wasn’t a second income, where did the money come from to fund it?

He admits he belonged to an important clique of key players—“leading politicians and high business people in the province”—who opened doors for him in all directions. “We lived like a family. We took care of one another. But no tenders. It was comradeship,” he insists. “That’s how we are.”

Thorny subject
Then I broach the thorny subject of SGL, the firm of consulting engineers that has become infamous through its links to Malema.

The history of SGL was explained to me in the following way by some people in the know. In 2004, Malema met the two directors of the firm—Lesiba Gwangwa and Jonathan Khedzi—at the home of well-known businessman Matome Sathekge. Sathekge owned Bakgaloka Holdings, and the two men had done some work for him in the past. When they tried to get their own firm off the ground, Sathekge told them Malema would help to put some tenders their way. Whatever arrangement they came to would be their own.

Infrastructure projects were plentiful at the time in the province, which was undergoing major restructuring, and civil engineering was a good business to be in. But for a young company starting out, with a track record that only spanned a few years, SGL needed a leg-up. And Malema was going to provide it, they were told.

Malema flatly denies this.

Sathekge says there was no such suggestion on his part, Khedzi refused to comment on the matter and Gwangwa denied it outright. Malema, however, admits he was introduced by the well-known businessman to the two young directors, but he says it was for reasons very different from what I was led to believe.

“What was central in me being introduced to these young chaps was for them to help the youth league. SGL was donating money to the youth league programmes,” he argues.

Ten percent
I talk him through the alleged deal as it was explained to me. Malema was to help SGL win tenders and in return he—rather than the youth league—would earn 10% of the value of each one he put their way. Therefore, the bigger the amount of the tender, the better for Malema. And the more tenders he put their way, the better still for him. For the directors of SGL, so the allegation went, it was a workable agreement. These tenders were crucial for their growth and survival.

The sources stick to their guns—that’s how it was, they say. “I do not recall [this],” says Gwangwa when I put it to him. Malema says that, even if he had wanted to, the political climate was not conducive to it at that time.

“The doors were closed,” he says, explaining that he was on the wrong side of Moloto and times were lean.

“So no tender kickbacks?” I ask. “No cash payments or cheques made out for cash but for your benefit?”

“No, no, no.”

I recalled a conversation I had had with him in the spring of 2009. We were talking about his lifestyle and, when I asked him what or who was footing the bill for it all, he told me his ANC salary was. He led me to believe he was taking home something in the region of R40 000-plus a month at the time, when the various deductions were totted up. And it was inconceivable that that amount could sustain Malema’s lavish ways, though he insisted at the time: “I don’t have any other income. This is it.”

Politics or business?
So when his business interests began to trickle into the public domain towards the end of that year, I asked him in which field he felt he excelled: politics or business.

“Do the two have to be mutually exclusive?” he asked in response.

“That would depend on the nature of the business,” I replied.

But even with the correct separation of interests, did he feel he was a better politician or businessman?

“I’m a good deal broker,” he answered. “That’s what I am.”

I remind him of that conversation as we try to get the record straight and I turn to the other companies to which he has been linked and on behalf of which he is alleged to have helped to drum up business deals, or so former associates say. I ask again whether it is possible that there was a budding broker in him all this time.

“You know, in that process there was a point when one registered companies in his name and tried to do some jobs and was not successful,” is his careful response. “And the companies became dormant.”

“Ja, no”
Was he not a shareholder in Ever Roaring Investments?

“Ja, but I was not always there,” he says.

Did he and his fellow shareholders ever venture into a multimillion-rand deal linked to Vuna Health Care [which in turn is linked to ANC-owned Thebe Investments] to provide medical supplies across the province over a three-year period?

“I don’t know if they had a business with Vuna,” he says in reference to Ever Roaring. “I never did.”

I put it to him that the deal allegedly earned him—and the other three main shareholders who were with him in Ever Roaring Investments at that time—some R250 000 between them. The tender should have earned them far more, but they scuppered the chance of that at the bidding stage.

He denies this, saying: “There have never been financial benefits come from Ever Roaring. It actually took money from us.”

Blue Nightingale
The same applies to Blue Nightingale Trading 61, he suggests, the company to which he appointed himself as a director and some family members as fellow directors.

Yet it was through this company that he secured a 3% shareholding in Tshumisano Waste Management, the consortium that won a R200-million public tender in 2005. Though it had been reported that Malema was bought out a year later, I put it to him that my information shows that he remained a shareholder until the five-year deal wound down in 2010, the books for which are now being settled.

“Definitely not,” he says, arguing that he wasn’t a director of Blue Nightingale in 2005 when the tender began (though I point out that would not necessarily preclude his involvement as a shareholder).

In addition to his dividend pay-outs, my information is that Malema received a payout from the consortium in 2006 that was just shy of R270 000, which financial insiders claimed was a loan, but which in practice was essentially a financial gift.

“What loan?” he asks. “I don’t owe anybody.”

If not a loan, then perhaps a gift.

“No,” is the flat response.

Adamant
He is equally adamant that Blue Nightingale was not involved in Beta Projects and the consortium that won multiple and hugely lucrative cleaning tenders throughout Limpopo in recent years. Then I tell him I have the financial records that show a 10% shareholding in the Beta consortium.

“But have you seen the money go into my account?” he asks.

I haven’t. But surely the financial statements speak for themselves?

“No, it’s not true,” he says.

He then talks me through the property investments that started in 2006 when he bought a plot of land in the up-and-coming residential area of Ster Park, which the locals dub “Tender Park” today. Malema bought the site for R222 000 from the municipality.

He tells me he took out a loan from Standard Bank to buy the site, which was then sold on his behalf by a real estate agent a few months later for R680 000. How much Malema actually got for it he will not say. But with the proceeds he put down a deposit on a modest house in Flora Park, for which he paid close to R1-million, rolled by a bond—which has since been cleared—and he immediately pumped a further R500 000 into the house in renovations.

Sandton
When Malema won the presidency of the Youth League in 2008 he moved back to Johannesburg. He had a short stay in a Sandton penthouse. He then moved to a house owned by Lembede Investments. In April 2009 he moved to a three bedroomed house in Sandown, the rent on which was R18 000 a month.

The owner, Kenneth Hollingsworth, was approached by a real estate agent who told him she had a tenant who wanted to rent it.

“He’s a good tenant. And he will pay cash up front,” she told him.

“Great,” Hollingsworth said.

“You won’t have any problems with him,” she continued.

“Great,” he said again.

“Would you have a problem if the tenant was Julius Melama?” she asked.

“Not at all,” he said. “I don’t care who it is so long as it’s a good tenant.”

Cash up front
And true to his word, Malema paid cash up front for the rental for the entire year, complete with the two months’ deposit. The payments came in a few tranches.

“I approached Pule and different comrades and asked them to help me pay the rent,” Malema explains when I put it to him. “We asked for upfront payments so that we don’t go around every month knocking on doors.”

But two months after Malema moved into the house, he decided he wanted to buy it. So he put pressure on the owner until he relented.

“The house wasn’t for sale,” Hollingsworth told me. “But he wasn’t giving up. So in the end, I put a figure on it that was way above the market rate.”

At the time, the house was worth about R2.8-million. Hollingsworth put a price of R3.6-million on it. And sure enough, Malema bought it.

Again, he says, he asked for contributions to help him put down a deposit. “And then they started contributing.”

I ask who “they” are, but he refuses to say.

I tell him I heard four men contributed to the down payment.

“No, different people,” he says. “There were more than four.”

Tokyo
The one name that keeps coming up is that of Tokyo Sexwale. And I ask Malema whether Sexwale was one of those behind the house the or funding of his lifestyle.

“Tokyo—he has never given me money,” he says.

“Has he ever given [Malema’s Ratanang Family Trust] money?” I ask.

“No, Tokyo has never given the trust money.”

So why does his name keep coming up?

“They try to discredit me by saying I’ve been bought by Tokyo.”

All my attempts to reach Sexwale were in vain.

Houses, cars
With or without him, Malema continued to build his property portfolio. A year later the trust bought a farm in Palmietfontein, on the outskirts of Polokwane. According to the deeds records, it was a cash purchase for R900 000. Not long after that the trust purchased another property, a residential home in Polokwane, where his son, Ratanang, and the mother of the child, Maropeng, now live. That house was purchased through Gwama Properties, of which Gwangwa is the sole director but in which the Ratanang Trust has a shareholding.

Another property, in Quinn Street in Polokwane, cropped up a few months later. He tells me there might be some more.

His wealth was conspicuous in many ways, not least through his cars. From the Citi Golf he drove home to Polokwane in 2003 he graduated to a white Colt double cab later that year. Then he bought a black Audi 3 series.

“And I had to raise money for that too,” he tells me. “My car subsidy as secretary general was not enough to cover it. So I asked the comrades to help me.”

Not long after that, he was driving a top-of-the-range black Audi A3 Quattro 3.8. Around the middle of 2008, he bought his first Mercedes. A superior Mercedes followed a year after that, as 2011 started out, Malema took possession of another sleek Mercedes, this time an S600 V12, top-of-the-range model.

In the meantime, other cars featured among Malema’s possessions, mostly Land Rovers and Range Rovers. One belonged to businessman Raymond Matume.

“What’s wrong with that?” Malema asks. “We are comrades. He’s a businessman. He gives lots of money to the ANC.”

For more news and multimedia on ANC Youth League president Julius Malema click here.

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