Former SABC legal chief on fraud rap
Johannesburg advocate Mafika Sihlali was arrested this week for allegedly defrauding the South African Broadcasting Corporation of millions of rand.
Almost five years ago the Mail & Guardian was interdicted by Sihlali—then the public broadcaster’s legal chief—from publishing a story on an explosive SABC internal draft audit report that had been leaked to the newspaper. The interdict was dismissed with costs a few days later in the Pretoria High Court by Judge Ferdi Preller, who said the public had a right to know how taxpayers’ money was spent.
Among the serious allegations investigated, the audit report claimed that Sihlali irregularly outsourced work to law firms that were his “friends”, and which, in some cases, allegedly double-charged for their work. Sihlali was also accused of invoicing the SABC for his own law firm, which had been deregistered by the Law Society. Sihlali vigorously denied the allegations.
But on Wednesday morning this week, investigators from the Hawks sent an SMS to Sihlali asking him to hand himself over at its Johannesburg offices. On arrival, he was arrested on charges of fraud and corruption.
Hawks spokesperson McIntosh Polela said the charges related to Sihlali’s days as head of legal services for the SABC, a job he started in August 2006.
“It is alleged that while he was in this position, which he held for two years, Sihlali outsourced legal services of the public broadcaster to a company which belonged to his friend,” said Polela. “This was not necessary as the SABC had enough capacity to conduct its own legal services.”
Alleged “kickbacks” worth millions
The Hawks allege that Sihlali allegedly received “kickbacks” worth R2.5-million and that the money flowed from law firm SBS Incorporated to an account belonging to the Leandra Football Club, which they said he owned.
Sihlali appeared in the Commercial Crimes Court in Johannesburg on Wednesday on charges of fraud and corruption. He was granted bail of R15 000 and instructed to return to court on February 29.
He could not be reached on his cellphone for comment.
Polela said: “We have also extended an invitation to advocate Sihlali’s friend to hand himself over to face similar charges, failing which he will be tracked down and arrested. We expect that the friend will appear together with advocate Sihlali on the 29th.”
The M&G was reliably informed that the “friend” is Sylvester Sithole, whose unregistered law firm, SBS Incorporated, was investigated by the Law Society after it emerged in 2007 that the SABC had paid it R6-million. According to the SABC’s internal audit report, the firm allegedly began cashing in at the SABC just weeks after Sihlali’s appointment.
An attorney who was previously employed at Sihlali’s law firm and went to work at SBS, is alleged to have billed the SABC for more than R2-million in just eight months.
The audit report highlighted various other instances in which the firm potentially overcharged the SABC, giving examples of false narratives being attached to an invoice, double invoicing and fraudulent invoices.
The audit report claimed that more than half the witnesses and other SABC employees interviewed by the audit team were “scared to depose affidavits”, but one employee accused Sihlali of threatening her.
Annexed to the audit report was a letter from then-company secretary, Ramani Naidoo, in a section titled “Possible intimidation of SABC employees and/or witnesses”. Naidoo said Sihlali had looked at a picture on the wall and asked if she knew the artist, Joe Maseko. “I said I didn’t. He then said he had broken Joe’s legs once and he was here to do the same to me,” Naidoo wrote.
Legal opinion to suspend Sihlali ignored
But despite legal opinion recommending that Sihlali be suspended and criminal charges laid against him, he remained at work. At the time, it was alleged that he was being protected by his business associate, the SABC’s then-chief executive, Dali Mpofu, who was linked to Sihlali in 2007 through nine dual company directorships.
Ironically, it was Mpofu who ordered the SABC’s head of internal audits, Elsje Oosthuizen, to undertake a preliminary investigation into allegations made against Sihlali by the Broadcasting, Electronic, Media and Allied Workers’ Union. During the investigation Oosthuizen’s house was mysteriously set alight.
Sihlali wrote to the M&G in 2009 claiming that the internal audit report had been the work of “one bitter individual” at the SABC. Two years later, a report by the auditor general revealed that Mpofu and Sihlali signed off a proposed R1.7-billion deal without authority.
It was the single-largest irregular contract highlighted by the auditor general in his report on the mismanagement of the broadcaster and involved the management of the SABC’s “digital migration strategy”.
Sihlali denied all the allegations contained in both the internal audit and the auditor general’s reports. In a letter sent to the M&G he complained that he had not been afforded the opportunity to be heard on the allegations contained in the auditor general’s report before it was presented to Parliament.
The report also examined the allegations of outsourcing the SABC’s legal services and used the corporation’s draft internal audit report as the premise for its investigation.
At the time, Sihlali was the only director of Sihlali Molefe, a law firm that had been deregistered by the Law Society before he joined the public broadcaster. He left the SABC under a cloud after sending Mpofu an SMS in 2007 saying he was quitting and later claiming this did not constitute a resignation.
SABC spokesperson Kaizer Kganyago had not responded to the M&G‘s request for comment at the time of going to press.