The Scorpions seemed to be edging closer to Mpumalanga public works minister Steve Mabona this week when they arrested his head of department and two businessmen connected to him — and claimed that a contract from which he had received R1-million was fraudulent.
The elite investigative unit’s assertion that Mabona had benefited from a fraudulent transaction is one of a number of setbacks for the embattled provincial minister in recent weeks.
Mabona’s problems started in October after the Mail & Guardian revealed questionable dealings between him and businessman Walter Senoko’s company Positioning Corporate Underwriters and Insurance Consultants (PCUIC).
Mpumalanga Premier Ndaweni Mahlangu reacted to the M&G’s revelations a fortnight ago by appointing a forensic team to probe the matter. At the same time, the Scorpions tightened their net oround key players involved in the Mabona saga.
The unit issued warrants of arrest for Senoko and PCUIC director Mike Makweya. Another warrant of arrest was issued for William Mthombothi, the acting head of Mabona’s public works department.
The three handed themselves over to the Scorpions this week and were formally charged with fraud. Senoko and Makweya were released on R35 000 bail, Mthombothi on R20 000, and the matter was remanded to January.
The charges against Senoko, Makweya and Mthombothi relate to the transfer of R6,6-million by Mabona’s department to PCUIC. It was this transaction that was exposed by the M&G after it was discovered that R1-million of that money had ended up with Mabona. Mabona has denied any wrongdoing.
Contractually the R6,6-million was owed to the construction company DZ Civils for roadworks commissioned by the department, but, by agreement, the money was released by Mabona’s department to PCUIC.
PCUIC supplied guarantees to the department to enable it to release the money. Scorpions investigators believe that PCUIC does not have the standing to issue such guarantees and that the transfer of the R6,6-million to PCUIC was fraudulent.
Details of the case are apparent from an affidavit submitted by Scorpions investigator Vongani Mugwanbane to the Pretoria Regional Court arguing for arrest warrants to be issued against Senoko, Makweya and Mthombothi.
The affidavit states that PCUIC did not have the financial standing to back the guarantees. Senoko’s company had only R700 in its bank account when it guaranteed the R6,6-million.
The affidavit charges that Mthombothi, ”acted unlawfully by accepting Senoko’s guarantees … The rules of the civil engineering contract state that only a bank executed guarantee shall be accepted by the department.”
It also states that: ”The account of PCUIC was only opened in May 2003, which was approximately a month before the department paid the [R6,6-million to PCUIC]. PCUIC did not have money in its account to back the guarantees that it issued to the department. There was only an amount of approximately R700 in the account by the time the department paid in the money.”
In spite of this, the affidavit says, the department’s money almost immediately started leaving the PCUIC account. This included: ”two cheques of R500 000 [a total of R1-million], which were drawn in favour of or for the benefit of Mr S Mabona, the MEC for the Department of Public Works, Roads and Transport.”
The affidavit does not say why Senoko paid Mabona the R1-million. Mabona has denied that the money constituted a kickback, saying it was for a car and a house that he had sold to Senoko. However, as earlier reported by the M&G, neither the house nor the car has been transferred into Senoko’s name.
Senoko initially supported Mabona’s explanation — that he had paid Mabona the money for a car and a house — but has since backtracked and is now saying that it was for ”productive investments”.
This may cause further trouble for Mabona, as his version is now challenged by the party most closely involved with him in the transactions.
The affidavit says Senoko employed the R6,6-million transferred to PCUIC by Mabona’s department for ”personal use”.
”By the middle of August 2003, there was only R600 000 remaining in the [PCUIC’s] account. The majority of the funds in the account were utilised for personal and/or contractual [purposes] of Mr Senoko.”
Senoko and Makweya’s legal representative, Zehir Omar Attorneys, this week said their client would like to maintain ”the right to silence”. Mthombothi refused to comment.