REPUTATIONS are at risk as a dispute between business factions heats up.
A high court judge and the national police chief both face the heat in a blazing row over a R99-million airports security contract. Accusing both is a well-connected drugs convict who earlier partnered the judge in business.
Cape High Court Judge Jerome Ngwenya is accused by the convict of having benefited from ”stolen” shares. Judge Ngwenya’s standing may be compromised by his earlier business relationship with the convict, who was at the time a fugitive from justice.
National police Commissioner Jackie Selebi is accused by the convict of having ordered his belated arrest as a favour to the judge’s brother, Noel Ngwenya. This was after the business relationship between both Ngwenyas and the convict went sour. Selebi’s standing may be compromised by his alleged friendship with Noel Ngwenya, who was arrested last week on multiple fraud counts and whose security company is subject to a multimillion-rand tax investigation.
The convict is Vuyo Ndzeku, related by marriage to Minister of Housing Sankie Mthembi-Mahanyele and a long-time business partner of Lungi Sisulu, son of struggle veterans Walter and Albertina Sisulu. Ndzeku was arrested in 1988 for mandrax dealing but served his sentence only in 2000. He maintains the mandrax charge was a set-up, but does not deny earlier links with the drugs underworld. He said this week: ”I am not scared of [Selebi].”
Selebi confirms personal involvement in the saga, but denies his relationship with Noel Ngwenya is as close as suggested or that it influenced his actions: ”He is an acquaintance & not, you know, a buddy.”
Judge Ngwenya, denying Ndzeku’s charges, comments: ”Had I time on my side, I would have written a short novel about Ndzeku.”
The dispute is remarkable for the way it has pitted politically connected business factions against each other. It came to a head last November when the Airports Company of South Africa (Acsa) cancelled Khuselani Security and Risk Management’s contract to provide security at the country’s major airports, claiming Khuselani had not performed adequately. Noel Ngwenya is chief executive of Khuselani.
The contract, worth R99-million over three years, was awarded 18 months earlier and its premature termination remains the subject of arbitration proceedings. But Khuselani’s axing unleashed a torrent of whispered allegations against opponents of corruption and worse, but hard to prove from sources allied to both camps.
The Mail & Guardian reported at the time that, days after Acsa cancelled Khuselani’s contract, Acsa chairperson and prominent businessman Mashudu Ramano was hauled in by police who questioned his citizenship. It is tempting to regard the police action as harassment, since no charges were formulated against Ramano afterwards.
Selebi was accused by Acsa officials at the time of having pressured them not to terminate his ”friend” Noel Ngwenya’s contract. Selebi was quoted responding that police ”top management suggested [to Acsa] that it would make sense to keep the incumbents in place until such time as everybody had been checked out and other measures had been put in place”.
Now the long arm of the law is reaching in the opposite direction, driven primarily by tax officials. The Sunday Times reported at the weekend that revenue service and police officers raided Khuselani’s offices last week to gather evidence in a R5-million tax investigation against the company. Noel Ngwenya was arrested the same day on seemingly related multiple fraud charges. He was released on bail of R500 000 – a measure of the gravity of the charges.
Khuselani was founded in 1996 by Ndzeku, Sisulu and Jerome Ngwenya (then still a practising attorney – he was appointed judge only two years ago). Noel Ngwenya, at the time employed by state arms firm Denel, also played a role in the company. Copies of share certificates from November that year reflect Ndzeku, Sisulu and Jerome Ngwenya as the joint owners. ”It worked well; there were no problems,” Ndzeku says.
The problems were to come later. Judge Ngwenya says: ”They [Ndzeku and Sisulu] were to add value to the business because of their connections and profiles. This never happened but we incurred the stigma and trouble that persecutes me to this date.”
At the time the partners came together, Ndzeku had just lost a final appeal against his drugs conviction. Ndzeku was arrested in Cape Town in 1988 and charged with dealing in thousands of mandrax tablets, none of which was found on him. He was sentenced in 1992 to nine years, although the effective term was three years.
The Appeals Court dismissed Ndzeku’s final plea in November 1995 and confirmed his conviction. The judgement was ”reported”, meaning it was accessible to the legal community.
Judge Ngwenya says he knew Ndzeku had a ”problem” as Ndzeku could not be registered with the Security Officers’ Board, which oversaw the private security industry. But he maintains he was not aware of the full details until much later: ”Had I known about his past criminal record I would not have had any dealings with him. Upon my discovery of the true facts I cut all ties with him.”
Ndzeku maintains Judge Ngwenya knew all along: ”He did know about my case – I wanted him to help me [as attorney].”
Ndzeku at the time was not only a convict, but also technically a fugitive from justice, as he failed to report for his sentence and authorities, for reasons still unclear, neglected to arrest him. But he made progress in high society. Already in January 1995 he married Phuthi, the daughter of controversial sorghum beer king Mohale Mahanyele, who 18 months later wed housing minister Mthembi-Mahanyele. Luminaries at Ndzeku’s wedding reportedly included Adelaide Tambo and former Zambian president Kenneth Kaunda.
One former business partner of Ndzeku’s says: ”He could open doors. He was connected. He could take you to minister level, to premier level.”
During 1998 Noel Ngwenya, having left Denel, formally joined Khuselani, of which he is now CEO. That same year Ndzeku and Judge Ngwenya helped found Swissport South Africa in conjunction with the Swissair group. Swissport has the security-sensitive job of handling passengers, baggage, cargo and aircraft at South African airports. Judge Ngwenya became Swissport chairperson, with Ndzeku as his alternate director.
But the relationship between the Ngwenyas on the one hand, and Ndzeku and Sisulu on the other, deteriorated during the course of that year. Judge Ngwenya says it was during this time that he chanced upon details of Ndzeku’s conviction from published law reports. He wrote to Swissport International in August 1998 announcing the withdrawal of Ndzeku from the Swissport South Africa board.
The letter read: ”Mr Ndzeku is currently a fugitive from justice and was convicted of a serious matter and has failed to remedy the situation, despite having been afforded both assistance and an opportunity to do so.”
In January 2000, Selebi personally ordered Ndzeku arrested for his 1992 drugs conviction.
Selebi says: ”I got a report suggesting that Ndzeku, who had been convicted of dealing with narcotics and who had been sentenced to nine years, had been evading arrest & After some investigation we learned that Ndzeku was working for Swissport & I got very concerned and disturbed that a convicted fugitive was working at the airport. That is how I got involved in the Ndzeku matter.”
Judge Ngwenya’s letter suggesting Ndzeku was removed from Swissport in 1998, and Selebi’s statement suggesting Ndzeku’s ”presence” at Swissport played a role in his 2000 arrest, seem not to match.
Ndzeku charges his belated arrest was designed to benefit the Ngwenyas. ”Because Jackie [Selebi] was Noel [Ngwenya’s] friend, he started to remove me.”
Selebi denies he knew Noel Ngwenya at the time of Ndzeku’s arrest: he maintains he first met Ngwenya later that year. ”[The arrest] had to do with someone who had committed a crime; it did not have to do with my friendship with anybody.”
Ndzeku’s release on parole after just 83 days – on the grounds that he qualified for various remissions and amnesties, and that five-sixths of his effective three-year sentence could legally be converted to correctional supervision – led to an outcry from Selebi and others. Ndzeku was rearrested, but in July that year the Pretoria High Court ordered his release.
During Ndzeku’s spell in prison two things happened. First, Jerome Ngwenya was appointed to the Cape High Court Bench. To comply with the prescription that judges not be involved in business, he handed over his directorship in Khuselani to his twentysomething daughter, Thandekile Ngwenya, and placed his shares in a trust of which she is the beneficiary.
Second, Khuselani landed the R99-million airports security contract, significantly boosting the company’s value.
Ndzeku, on his release, went on the warpath against the Ngwenyas. In a sworn affidavit, Ndzeku claims to have discovered early last year that all his and Sisulu’s shares were, between 1997 and 2000, irregularly transferred to both Ngwenya brothers and to the trust of which Thandekile Ngwenya is beneficiary.
Ndzeku’s affidavit continues: ”I have never transferred, sold or in any way whatsoever made over my shares to Jerome Ngwenya or anybody else. I state that the register of members’ share accounts as reflected in the share register is false and purports to reflect what must be fraud.”
Ndzeku says he pressed charges against both Ngwenya brothers over the ”stolen” shares. The Johannesburg police commercial crime unit this week confirmed it had investigated the charges and forwarded the docket to prosecuting authorities for a decision. Judge Ngwenya calls Ndzeku’s charges ”spurious and false”.
Ndzeku and Sisulu appear to be at least partially behind other actions against Khuselani and the Ngwenyas. A complaint has been lodged with the Judicial Service Commission against Judge Ngwenya. A commission representative confirms there was a complaint, but will not disclose details and says it will not be investigated pending finalisation of related civil procedures.
Ndzeku says he was the one who handed information to the revenue service that sparked the tax investigation against Khuselani and the Ngwenyas. ”I gave the receiver all the information.”
For now, authorities seem to be taking seriously at least some of the convict’s complaints. Whether the Ngwenyas and Selebi can withstand the heat remains to be seen.