Justin Arenstein
Mpumalanga’s government battened down the hatches this week and refused to release any information about its dealings with a shadowy business network reported to be channelling funds into the African National Congress’s 1999 election coffers.
The network was reportedly set up in 1996 under the control of three holding companies and relied heavily on government tenders and other contracts to generate funds for its estimated 27 affiliate companies. Neither the provincial government nor the ANC would officially comment on the network this week in a marked departure from the Mpumalanga ANC’s usual fiery response to any charges of shady deals.
The clampdown comes despite orders for disclosure by the provincial government’s Director General, Frank Mbatha, and warnings by the Human Rights Commission that the public’s rights of access to information had been violated.
Commission legal head Mogam Moodlier met with Mpumalanga Parks Board lawyers on October 29 in an attempt to convince them to release financial records and other information on the issue. There was still no resolution to the dispute by the time the Mail & Guardian went to press but Moodlier has warned that the parastatal will be investigated in terms of the Human Rights Commission Act unless it complies with requests for information.
Mpumalanga’s new MEC for Finance, Lassy Chiwayo, and key officials in his department also defied written instructions to disclose the network’s links to the government this week. Mbatha wrote two strongly worded letters to Chiwayo and three of the most senior financial directors ordering them to answer the M&G’s questions in writing by October 28. Not one bothered to reply or return phone calls on the issue.
Chiwayo, his office said, was attending ANC Youth League and provincial working committee meetings during normal office hours and was consistently unavailable for comment. Mpumalanga Finance Corporation CEO and acting finance department head Sam Cronje simply ignored Mbatha’s letters.
Cronje helped set up at least one of the holding companies in the network, while his wife, Marika, is a director of the network’s most profitable subsidiary, Phakamani Security Services. Phakamani is 50% owned by Pfunanani Holdings and holds the bulk of the Mpumalanga government’s security service contracts. Cronje has also admitted that he bought into at least one of the network’s top-secret helicopter partnerships with the recently ousted finance and environmental affairs MECs, Jacques Modipane and David Mkhwanazi, and South Africa’s ambassador to Mozambique, Mangisi Zitha. The partnership was designed and initiated by suspended parks board CEOAlan Gray in 1996.
Gray claims in a highly confidential 43-page report to Mpumalanga’s executive council that the partnership was supposed to serve as a pilot project for the network to build a black aviation company. The company would rely on guaranteed amounts of government contracts.
He warns that the entire network and its financial kickbacks to the ANC would be exposed unless the executive intervened and mitigated charges of maladministration and fraud currently being investigated against him by Judge Willem Heath. The charges stem from Gray’s illegal use of Mpumalanga’s game parks as collateral for six secret promissory notes he issued to dodgy financial brokers in return for offshore loans worth more than R1,3-billion.
Gray’s report, dated September 23, was never presented to the executive council but has since been handed to the ANC’s top national leadership for further investigation. ANC Mpumalanga representative Jackson Mthembu said this week that he had been requested not to comment until the national leadership made a decision.
Mpumalanga’s tender board head, Hamlet Mona, meanwhile also refused to confirm the extent of the network’s dealings with the province or links with a list of 19 key network shareholders. Mona dismissed two letters from Mbatha ordering his full co-operation as irrelevant and refused to say how much money had been paid to network affiliated companies.
“I will not accept ultimatums from anyone and will not answer your questions. I don’t care whether I am constitutionally bound to do so – I’m not putting myself at risk,” said Mona. He refused to take further calls on the issue.
Other questions which Mona, Cronje and provincial treasury head Issy Lief refused to answer include exactly who was paid R13,8-million by the parks board for 10 properties bought irregularly in 1996 and 1997. The cash-strapped parastatal bought the properties, including two hotels, without tender board approval and rented them to the provincial government for R1 each a year. The auditor general described the expenditure as “inexplicable” and a complete waste of tax money in a special audit report in July.
Meanwhile, sources in the parks board indicate that all records relating to another network company, Somalanga, have been purged from the parastatal’s computer system. Somalanga was appointed by Gray to develop the province’s flagship game reserve at Songimvelo. It is a subsidiary of another of the network’s three holding companies, the Corridor Development Corporation (CDC), and is linked to Gray’s “good friend” and business partner, Sean McMurray.
McMurray was a parks board board member for a brief while in 1996. He has since leased his house to the parks board as offices in Middelburg and sold 50% of his hotel’s interests in Pilgrim’s Rest and Nelspruit to the Dubai-based Dolphin Group. He helped introduce Dolphin to Mpumalanga and played a prominent role in setting up the secret R12,5-billion deal in 1996 that tried to grant Dolphin a 50-year commercial development monopoly on the province’s game reserves. McMurray is currently a director of the CDC and has declined to deny his membership of the network or comment on its activities.
Mbatha was unavailable for comment at the time of going to press. – African Eye News Service