Stefaans Brmmer
Mathole Motshekga this week denied he was close to apartheid-era military intelligence frontman Abel Rudman – but the Mail & Guardian has documentary evidence of a meeting at the Gauteng premier’s house where shareholding in a resort development was discussed.
The M&G published details a fortnight ago of Motshekga’s involvement in a series of business ventures led by Rudman, and of a R50 000 cheque which Rudman wrote Motshekga last year during the bitterly contested race for the provincial African National Congress chair.
The ventures centre around three companies, Kara Cultural Developments (which plans to develop a R250-million resort at Modjadji in the Northern Province), Kara Agricultural Products and multimedia publishers Kara Interactive Solutions. “Kara” refers to a philosophical discipline of which Mothsekga is the prime local exponent.
Motshekga this week broke his silence, telling the Sowetan the R50 000 was a donation by Rudman to the Lobedu, Motshekga’s “tribe” which owns the land at Modjadji where the resort development is planned.
The premier claimed the money was used to buy sewing machines for a community project. He was quoted as saying Rudman was not a personal friend, but that he had done legal work for him. Motshekga practised as a lawyer before taking office.
The M&G has a copy of a letter from Rudman to empowerment company Umnotho weSizwe on February 24. In it Rudman repeats a share offer on the Modjadji resort, referring to discussions the previous day at Motshekga’s house.
The meeting took place more than a month after Motshekga’s inauguration as premier. It is considered irregular for a premier to continue private legal practice after taking office.
Auditors Coopers & Lybrand discovered the R50 000 cheque last August during a forensic audit of another multimedia publishing company Rudman managed at the time, Vantage Multi-media Communications. The audit was initiated by information technology group Q-Data, the majority shareholder in Vantage, because of concerns about Rudman’s management practices.
Coopers & Lybrand found Rudman had used more than R600 000 from Vantage accounts to fund his attempts to start the Modjadji resort development – a venture in which Vantage had no stake, but in which Motshekga was heavily involved by then.
The auditors’ findings led to an order for the liquidation of Vantage being granted in November – but only after a disciplinary inquiry, which Rudman did not attend, found him guilty of irregularities and recommended his dismissal. Disciplinary inquiry chair Nazeer Cassim accused Rudman of dishonesty, breaking a number of statutes, and theft.
Said Cassim, a senior advocate who served as an acting judge this year: “It is clear Rudman used Vantage funds for the benefit of [his Modjadji project] to the extent of R650 343. This transaction, like so many others in respect of which evidence has been tended, is in my view theft. In a normal society I would expect a man such as Mr Rudman to be prosecuted and to be dealt with so that commercial morality can be restored.”
Motshekga’s explanation to the Sowetan – that the R50 000 was for a sewing project – is at odds with what Rudman told Coopers & Lybrand during the forensic audit. Rudman maintained at the time that the payment was a “marketing expense” in terms of Kgatelopele, a venture which Motshekga helped set up between Vantage and elements of the ANC Youth League. The plan was for Kgatelopele to market Vantage’s multimedia systems to the government.
If indeed the money went to the Lobedu community, it is questionable whether Rudman had the right to use Vantage funds to make the donation. Vantage creditors would probably be entitled to demand Motshekga repays the money.
The M&G was given a third explanation by two well-placed company sources: they said there was talk of a R50 000 “campaign donation” at the time. One source, who was involved in the Kgatelopele venture, said it was inconceivable that Motshekga could have rendered services worth R50 000. The cheque was made out in favour of Motshekga personally.
Meanwhile, Rudman needed a new vehicle for his multimedia operation after his dismissal from Vantage. He found it in Kagiso Investment Trust division Kagiso Publishers, which started up Kara Interactive Solutions in February, to be managed by Rudman. Insiders say Motshekga recommended Rudman to Kagiso.
Kagiso this week acknowledged bewilderment at allegations about Rudman’s past, saying it had handed the matter to its lawyers with a view to reconsidering the partnership. Said Kagiso Publishers CEO Steve du Toit: “It is unacceptable for us to have an association with someone like this, if the allegations are true.”
Motshekga’s acknowledgement to the Sowetan this week that he did legal work for Rudman raises a serious possibility of a conflict of interest. Motshekga was brought to Modjadji by the Lobedu community last year to safeguard their interests in the Modjadji development – and to guard against exploitation by Rudman.
n Rudman was in Tanzania this week and not available for comment before publication. Earlier, he acknowledged a “close relationship” – but not a commercial one – with Motshekga. He said he could “not remember” a campaign donation to Motshekga, and denied any wrongdoing at Vantage.