Mungo Soggot
Two eminent businessmen resigned last year from an investment fund set up by Don Mkhwanazi after he paid himself and a Liberian consultant huge salaries and the fund’s first venture flopped.
Mkhwanazi founded the National Empowerment Trust in 1994, together with the National Empowerment Trust Investment Fund, which he chaired.
But the two most prominent members of the investment fund’s executive – vice-chair Oscar Dhlomo, a leading Durban businessman, and Gibson Thula, head of the Diamond Board – quit last year.
With start-up funds of R5-million, Mkhwanazi proposed paying himself a one-off fee of R144 000 and a monthly salary of R45 000. He is also understood to have made handsome payments totalling at least R500 000 to his Liberian consultant, Ethelbert Cooper. Mkhwanazi also proposed that the fund pay for Cooper’s relocation to Durban.
Cooper is a close associate of Emanuel Shaw II and a director of International Advisory Services (IAS). IAS was set up last year by Mkhwanazi’s lawyers and was awarded the R3- million contract to advise the Central Energy Fund, which Mkhwanazi chairs. Shaw II and his son, Emanuel Shaw III, occupy offices at the energy fund’s Sandton headquarters.
It is unclear where Mkhwanazi raised the investment fund’s start-up cash and it is also unclear what the rest of the money was spent on. Mkhwanazi’s main plan at the time was to start a new venture in the financial services sector together with another established player.
It is understood that before the relationship could be consummated, the deal flopped, and Mkhwanazi turned his attention to investing in a Malaysian bank after Dhlomo and Thula quit.
In March this year Mkhwanazi announced that the trust had signed a joint venture with Malaysian group Killinghall Berhad to set up a new bank in South Africa, the Southern Bank of Africa.
Mkhwanazi has aleady earned the nickname “Mr Malaysia” and his affinity for the Asian country is obviously shared by his Liberian associates. Two of the listed directors in Shaw and Cooper’s IAS company are Malaysian.
A member of the investment fund’s executive who did not resign with Dhlomo and Thula was Sizwe Nxasana, the senior partner of accountants firm Ntsaluba Nkonki Sizwe. This firm is being paid at least R1,2- million to conduct a highly controversial probe of the state oil company’s books.
Minister of Minerals and Energy Penuell Maduna awarded Ntsaluba Nkonki Sizwe the job without a public tender. At the time, Maduna is understood to have been in close contact with Shaw, who gave the minister informal advice.
Mkhwanazi’s empowerment trust itself – as opposed to the investment fund’s executive – included a string of prominent figures including Sipho Tshabalala, the director general of the department of public enterprises, and Keith Kunene, an attorney who is now a member of the board of the Central Energy Fund.
Several attempts were made to reach Mkhwanazi this week with questions being faxed to his Durban home and office.
New order follows bad ways, PAGE33