Justin Arenstein
Former Mpumalanga premier Mathews Phosa has assembled a rogue’s gallery of disgraced politicians and shady financiers to fund his new R390-million casino hotel development in Maputo.
The deal is one of a series involving Phosa and other prominent Mpumalanga figures under investigation by South Africa’s Scorpions unit and police commercial crime teams.
Scorpions investigation manager Corrie Engelbrecht confirmed the probe on Thursday but declined to comment for fear of prejudicing “a very sensitive case”.
Funding for the ambitious Quatro Hotel Estate project is being put together by Jean Mopotu – one of the masterminds behind Mpumalanga’s R1,3-billion promissory note scandal in 1998.
Mopotu, who describes himself as a “freelance entrepreneur”, was a director of Fenetic Investments with international fugitive and suspected chemical weapons dealer Moshe Regenstreich.
Fenetic Investments illegally used 32 Mpumalanga game parks as collateral for a secret offshore loan scheme, which saw Mpumalanga Parks Board chief Alan Gray arrested on 54 theft and fraud charges.
Regenstreich fled the country on a false Lesotho passport in August 1998. He was arrested by United States marshals on international diamond fraud charges at his luxury Las Vegas hideout last month.
Mopotu stayed in the country and attempted to use his association with African financiers Zamex to raise funds for Phosa’s R390-million Quatro Hotel project earlier this year.
He confirmed this week that he was still working on the project and was scheduled to meet possible funders later this week.
But Mopotu is not the only controversial figure linked to the project.
The government concession to refurbish Quatro Hotel was awarded to D&C Casino Estates, headed by disgraced former Mpumalanga environmental affairs MEC David Mkhwanazi.
Phosa allowed Mkhwanazi to resign from the government in 1998 following repeated mismanagement, and nepotism charges by the auditor general and other watchdog bodies.
His role in a string of scandals involving Gray, starting from the R25- billion Dolphin Deal in 1996, and his links with discredited gravy-train consultant Eugene Nyati, is being probed by the Scorpions.
Phosa is listed as chair of D&C Casino Estates in documentation supporting the casino development.
Phosa is also a senior shareholder on another of the consortium members, Vuka & Siza Colliers, and serves as non- executive director of the project’s financial advisers, KPMG.
Phosa’s business relationship with Mkhwanazi and other disgraced provincial politicians initially sparked the investigation between the police and the Scorpions.
Mkhwanazi, Gray, recently sacked finance MEC Jacques Modipane, former South African ambassador to Mozambique Mangisi Zitha and ousted finance department head Sam Cronje secretly set up a helicopter charter company, Air Excellence, in 1996.
The partnership’s articles of association stress that the names and roles of the politicians should be kept “top secret” at all costs because Air Excellence’s luxury Bell Ranger helicopters would be leased to the government through another of Gray’s companies, Lowveld Helicopters.
The secret partnership appears to have broken up before making any real profit, but the auditor general nevertheless repeatedly chastised Mpumalanga for chartering helicopters when cheaper alternatives existed.
Phosa knew about the partnership and appears to have warned those involved that it would embarrass both the government and the African National Congress but took no disciplinary action.
A four-year forensic audit into the scheme by independent auditors Gobodo Inc was finalised two months ago and prompted National Director of Public Prosecutions Bulelani Ngcuka to order urgent criminal investigations.
The report is also believed to have prompted Modipane’s surprise dismissal from the provincial government in April. Phosa’s successor Ndaweni Mahlangu, unexpectedly fired Modipane shortly after receiving the report but has to date refused to give reasons for the dismissal.
The report is also believed to be the reason Mkhwanazi and Gray made a desperate appeal for National Intelligence Agency (NIA) protection in April, in return for evidence that Phosa was involved in corruption.
Gray and Mkhwanazi made the offer during a secret meeting with NIA Director General Vusi Mavimbela in Pretoria to offer information against “various people on a number of issues”.
Mavimbela confirmed the meeting last month, saying the NIA’s own earlier covert investigations indicated there was “substance” to many of the allegations but that charges would be difficult to prove in court.
Mavimbela refused to specify which allegations against Phosa or other high- profile individuals were true.
Phosa was consistently unavailable for comment this week, but Engelbrecht confirmed the Quatro, and Air Excellence deals were central to the Scorpion investigation.
National Directorate of Public Prosecutions representative Sipho Ngwema also confirmed that a high-level probe was under way but declined to release further details.