Gauteng Minister of Public Transport, Roads and Works Khabisi Mosunkutu has moved to defuse allegations of impropriety over his receipt of money from a company that had dealings with his department.
The Mail & Guardian reported last week that the now-defunct Union Alliance Media (UAM), which was hired to manage government funds donated to the taxi industry by Mosunkutu’s department, had channelled R10 000 into Mosunkutu’s personal account in 2001.
The taxi industry in the province is represented by Gauteng Taxi Council (Gataco), which was launched in 2000.
In 2001 Mosunkutu’s department gave Gataco a grant of about R2,6-million, not R4-million as reported last week, which was the first instalment of the R10-million that had been allocated to Gataco. The money was transferred into a trust account jointly managed by UAM and Gataco.
The transfer of money from UAM’s coffers into Mosunkutu’s personal account is reflected in UAM financial documentation. The documents, one of which is headed “Union Alliance Media Ltd Electronic Fund Transfer Authorisation Sheet”, show that the money was transferred, but do not specify the purpose. Mosunkutu’s spokesperson Sizwe Matshikiza last week refused to confirm or deny the transaction, saying only that the minister would give “a comprehensive response in due course”.
On Sunday, two days after the M&G story, Mosunkutu issued a media statement confirming receipt of R10 000, but said this was a “personal loan” from one of the directors of UAM. He did not name the director.
Speaking in the Gauteng legislature on Tuesday, Mosunkutu said he had approached the UAM director for a “personal loan” because of financial difficulties. “When I found myself temporarily in financial difficulties towards the end of 2001, I approached an individual who is also director of UAM for a loan,” he said.
UAM, established in 1998 as a subsidiary of trade union investment company Union Alliance Holdings, was liquidated last year by FirstRand, which it owed about R45-million.
An audit conducted by KPMG found that UAM had spent more than R300 000 of Gataco’s money without authorisation by the taxi body’s executive committee. This finding was disputed by Gataco this week. In a statement Gataco also said that the funds at the centre of Mosunkutu’s scandal did not come from the taxi body’s coffers.
Mosunkutu seems to maintain the R10 000 was mistakenly paid to him by UAM rather than by the UAM director who had granted him the “personal loan”. He told the provincial legislature: “Subsequent to the liquidation of UAM, liquidators brought it to the the department’s attention that these funds needed to be paid [from the Gataco allocation managed by UAM].
“Once we’d been alerted, I instructed my attorneys to clarify the matter with the liquidators that this was a private loan and had nothing to do with Gataco. I regret that despite numerous correspondences dating back to March 2002 between my attorneys and the liquidators, the resolution of this matter has been delayed.”
Despite Mosunkutu’s explanation, the transfer of money into his account remains problematic. He has not stated whether he has made any effort to repay what he describes as a “loan” and what arrangement, if any, had been made to determine terms and interest.
And if, as Mosunkutu claims, it was a personal loan “from an individual who is also director of UAM”, the question of conflict of interests remains. Why did he choose specifically to approach a director of UAM, a company that had financial dealings with his department, for “a personal loan?”
Asked to comment on the terms and arrangement of the “loan” this week, Matshikiza said he would not discuss the issue as it is a “private matter”.
“I find no reason to discuss the MEC’s private and personal loan. It is a personal loan and a private matter. The ministerial statement in the legislature stated that this was a private loan and I think that this matter is closed,” he said.
In his address to the legislature Mosunkutu said: “With hindsight, it is clear that I committed an error of judgement.
“I understand that the appearance of a conflict of interests has been created that is potentially damaging to my public standing and confidence of the public in the institutions of government [and] for this I apologise, without reservations or qualifications, to members of the [Gauteng legislature] and the public.
“But I want to assure members there was no dishonesty on my part, and that it will never happen again.”
Thabo Masebe, spokesperson for Premier Mbhazima Shilowa, said the premier will not take action against Mosunkutu as there are institutions in government that can determine whether the MEC acted improperly or not.
“At the moment, what the premier has is the M&G article and an explanation by the MEC. The premier will not act on the basis of this. The premier would act on the basis of findings of institutions such as the legislature and the public protector,” Masebe said.