Mpumalanga’s influential public works minister, Steve Mabona, privately received payments totalling R1-million from a company that had contracts with his department.
The money, in two amounts of R500 000 each, flowed to Mabona within days of his department having transferred millions to the company for a contract that was subsequently probed.
Mabona and others involved in the saga deny the payments constituted kickbacks, saying they were for legitimate private deals between Mabona and Walter Senoko, the company’s principal.
However, the responses provided by Mabona and Senoko’s company are riddled with inconsistencies — and even contradicted by evidence under oath on behalf of Senoko’s company. Serious questions remain over the true purpose of the payments.
Senoko and his company, Positioning Corporate Underwriters and Insurance Consultants (PCUIC), attempted to interdict the Mail & Guardian from publishing this story. But the gag attempt was dismissed, with costs, by the Pretoria High Court on Tuesday.
Mabona, who submitted an affidavit in support of PCUIC in court, is one of the most powerful — and controversial — members of Premier Ndaweni Mahlangu’s provincial government.
Mabona’s defence is that the payments were for a house and a car he had privately sold Senoko. Even if these explanations stand, conflict-of-interest questions remain about his engaging privately with a man whose company had business from his department.
The two R500 000 payments were made in June this year from PCUIC’s corporate account. Details of the payments are apparent from evidence entered in recent Pretoria High Court litigation between a construction company, DZ Civils, and PCUIC.
The first payment was by a PCUIC cheque, signed by Senoko, to firm of attorneys Stan Fanaroff & Associates. The firm’s Stan Fanaroff has confirmed receiving the money on Mabona’s behalf.
This cheque was dated June 6, but cleared for payment only on June 11 — the day after Mabona’s department had transferred R6,6-million to PCUIC on June 10 in terms of a tripartite contract between the department, PCUIC and DZ Civils.
The second payment, again by PCUIC cheque signed by Senoko, was made a day later — on June 12 — to a company called Mnyombo Investments. Mnyombo has Mabona as its sole director and is fully owned by a Mabona family trust.
Mabona maintains the payments were for legitimate private transactions between him and Senoko. He said this week Senoko was paying him for a R2-million house he had sold Senoko in upmarket Kelvin, Johannesburg, and for a R690 000 late-model Mercedes.
Both these explanations raise many questions:
Mabona claims the payments were for private sales between himself and Senoko. Why did Senoko pay from the PCUIC account and not his own private funds?
Mabona says the house was sold in terms of a contract signed in July last year and the car in December. Why were the payments in terms of these contracts in such neat figures of R500 000 each — so many months after the contracts were supposedly entered — and within days of Senoko’s company having received millions from Mabona’s department?
Why has neither the house nor the car been transferred to Senoko’s name?
The house is still registered to Mabona and his wife, and they still live there. The car is still in the name of Mabona’s company Mnyombo Investments.
Casting further strong doubt on both explanations — regarding the house and the car — is an affidavit submitted by an employee of PCUIC to the Pretoria High Court in the course of the litigation between DZ Civils and PCUIC.
The employee, Mike Makweya — who was authorised to swear the statement on behalf of PCUIC — said in that matter that the R1-million was “invested in a project pursued by Myombo [sic] Investments.
“The said venture will assure a profit of approximately 25% of capital outlaid … [One cheque] reflects a payment of R500 000 to Myombo Investments. [The other cheque] reflects payment fo R500 0000 to Stan Fanaroff Attorneys, the attorneys of Myombo Investments.”
Makweya’s sworn version that the payments were for productive investments directly contradicts Mabona’s version that they were for the sale of a car and a house.
Senoko’s attorney, Phatudi Maponya, in reply to M&G questions, agreed with Mabona that the payment to Mnyombo Investment was for the sale of the Mercedes S500 through a “personal and confidential” contract between Mabona and Senoko.
But Maponya did not confirm the Kelvin property formed the basis for the other payment, saying: “It is our instruction that the payment of the sum of R500 000 relates to a lawful transaction. We have further investigated the nature and origin of the sum of R500 000 and we are satisfied that there is nothing irregular, unlawful/or corrupt regarding same.”
There are two known deals between PCUIC and Mabona’s Mpumalanga Department of Public Works, Roads and Transport.
The first related to the R6,6-million paid by Mabona’s department to PCUIC on June 10. Contractually the money was due to DZ Civils for road construction commissioned by the department but, by agreement, the money was released, for a commission, to PCUIC before it was due to DZ Civils.
This deal has run into difficulties on two fronts: the first was the court challenge by DZ Civils to wind up PCUIC. The order was granted but was later rescinded because DZ Civils did not serve proper notice.
But the deal has also been subject to an ongoing internal investigation by Mabona’s department, concerned that PCUIC had not supplied proper guarantees for the R6,6-million.
Mabona earlier acknowledged to the M&G that his department had demanded that PCUIC repay the money. Maponya responded that PCUIC would “vigorously defend” this claim.
The second deal between Mabona’s department and PCUIC — in this case trading under another name, Bushi Investment — involved the latter being placed on a departmental roster to supply earthmoving equipment.
This seems to have been a standard procedure, only qualifying Bushi Investment to supply the department. But in July acting department head William Mothombothi signed a document which, on the face of it, awarded Bushi a definite three-year contract to rent graders and excavators to the department at R350 344 a month.
That contract, too, has been questioned and is subject to litigation between PCUIC/Bushi and a company that refused to finance the equipment after, on its version, it developed doubts about whether the rental contract was regular.