Shadow falls on Lekota

Minister of Defence Mosiuoa Lekota has interests in fuel and wine businesses that he did not declare to Parliament as required by law. In both fields the companies with which Lekota is involved have either done business with the government or have attempted to secure state or parastatal contracts.

The wine company does regular business with the Free State government, an administration Lekota formerly headed. The company obtained funding from a national government agency to exhibit its products in three countries.

Lekota’s fuel company is a distribution agency of Caltex, the petroleum giant, and recently tried to secure a Transnet deal.

Lekota’s involvement in the businesses raises serious conflict-of-interest questions as Lekota is arguably in the position to use his influence and has access to privileged information that could advance his business interests.

The Executive Members Ethics Act and the ministerial handbook require all ministers to disclose all their shares and directorships.

Lekota on Thursday admitted to having failed to disclose his interests and said that he may have benefited financially from one of the companies.

Failure to disclose has recently led to disgrace for former African National Congress Women’s League president Winnie Madikizela-Mandela and ANC chief whip Tony Yengeni.

Both Yengeni and Madikizela-Mandela escaped Parliament’s censure after they resigned from Parliament in the wake of their separate fraud convictions earlier this year.

Colm Allan, head of the watchdog Public Service Accountability Monitor at Rhodes University, this week said of Lekota’s case: ”Revelations of this nature serve to undermine public trust in the government.

”It is important for the South African public to have sufficient confidence in the government to assume that when executive members take decisions these are designed to serve public needs and not their own private interests.

”Because of the power that Cabinet ministers have to make decisions about the allocation of government resources, the Constitution requires them to be absolutely transparent about their own private business interests.”

Lekota, who is also national chairperson of the ANC, is a director of the Landzicht winery in the Free State. He acquired the interests after 1996 when he left the province’s premiership.

He is also a director of its holding company. He did not declare this. He also has undisclosed shares in two entities, which trade as BZL Petroleum. The fact that BZL is a distribution agency of Caltex and the fact that Lekota is a shareholder of BZL arguably brings him uncomfortably close to the petroleum giant.

In this case the conflict of interest arises from the fact that Lekota sits in Cabinet meetings that make decisions which affect fuel companies. BZL’s R3-million business premises in Harrismith are branded by Caltex. BZL distributes Caltex’s diesel products to farmers and businesses in the Free State. BZL boasts a 60% market share in the Harrismith and Bethlehem areas. Lekota’s partners in BZL include James Bell, Christiaan Coetzee and Wessel Zietsman.

Bell this week spoke openly to a Mail & Guardian reporter posing as a businessman about BZL’s business activities. He conceded that BZL was interested in securing a contract from the Defence Department, which Lekota heads.

He also openly discussed a recent effort by BZL to secure a major contract from Spoornet, a division of state transport parastatal Transnet.

”We had a contact within Spoornet in Durban. We were sure that we would get the deal. We even flew the guy to Caltex’s head office in Cape Town, but he failed to secure the contract for us,” Bell said.

When contacted later for formal comment, Bell told a different M&G reporter: ”There is nothing that you can discuss with me, since he [Lekota] has no stake [in BZL].”

His comments also included: ”Jou moer [Stuff you]” and: ”As ek jou vat sal ek jou fokken nekkie vir jou omdraai [If I take you I will wring your fucking little neck for you].”

When pressed to give his version, Bell said: ”I do not have a side of the story. If the minister tells you he is involved or not involved, then he says that.”

Bell earlier boasted that BZL distributes more than two million litres of diesel every month. He said this was expected to increase when the company starts getting government deals.

Lekota, according to the companies’ registrar, holds 33% in Prestprops 1169 and 5% in Prestprops 1209, which trade as BZL.

Bell said BZL stands for the last names of the company’s partners, Bell, Zietsman and ”the other partner”. The ”other partner” clearly refers to Lekota.

Lekota acquired his Prestprops shares between 2001 and 2002. He was appointed defence minister in 1999. Lekota’s involvement in Landzicht, which is a prominent wine cellar in the Free State, began in June 2001.

He did not declare his directorship of Landzicht, and neither did he disclose his directorship of Landzicht’s holding company, GWK Corporation. What he declared is his directorship of Trade First, a wine farm in the Free State that supplies grapes to Landzicht. GWK confirmed in writing this week that Lekota is one of its directors. Other directors are NB Jacobs, FJ Lawrence, JH Coetzee, JF Jacobs, and JG Stander.

GWK said: ”He [Lekota] has one farm in the Jacobsdal area and his grapes are delivered to GWK-Landzicht Wines, Jacobsdal.”

Lekota acquired his farm two years after he left the premiership of the Free State. GWK confirmed that Landzicht is a regular supplier of wines to the Free State government.

”For many years already they [the Free State government] use all our wines for their functions … For many years we have been working closely with the Free State province Department of Tourism, Environmental and Economic Affairs,” the company said.

A Free State government official, who cannot be named, confirmed that Landzicht is a regular supplier of wines for all provincial government functions.

The official also confirmed that Trade and Investment South Africa, an agency of the Department of Trade and Industry, has paid 80% of the cost of Landzicht’s exhibitions in two overseas countries and one on the continent.

The exhibitions were held in Thailand, Beijing and Uganda. Attempts to get comment from the Department of Trade and Industry proved fruitless.

Last year Landzicht exhibited its wines in Moscow at a festival organised by the South African embassy there.