Former Gauteng finance minister Jabu Moleketi was not involved in finalising the details of a contract that allegedly contravenes the Public Finance Management Act, the province’s current finance minister said on Monday.
”The former MEC was briefed, but not involved in the final shareholders’ agreement that established the company [Capstone 518] … he didn’t even see it,” said Paul Mashatile.
”The information I have is that [Moleketi] had left the matter to his officials and as a result he did not sign this document,” Mashatile told reporters in Johannesburg.
”I am not investigating the [former] MEC,” Mashatile emphasised. ”You may find the MEC was within his powers to delegate to his officials.”
This follows an investigation into Capstone (trading as Infotek Services) set up as the sole provider of specialised information-technology services to the Gauteng Shared Services Centre (GSSC).
The company was jointly owned by Mike Roussos, head of the GSSC, and the Gauteng department of finance and economic affairs. No tender procedures were followed in awarding the government’s business to Capstone.
”I found this arrangement to be improper and against public policy,” said Mashatile.
A shareholders’ agreement and a service agreement with Capstone will be cancelled once Mashatile receives legal advice on the correct procedures to be followed.
He has instituted a forensic audit into the affairs of Capstone and the GSSC, which should be completed within a month.
”Capstone will be closed down,” he said, adding that its employees will be integrated into the Gauteng government.
Mashatile told reporters that Roussos, whose contract was terminated in August, has indicated he may take the government to court.
”The provincial government will not pay any money arising out of Capstone. We are prepared to go to court on this matter,” he said.
”I consider the shareholders’ agreement null and void and therefore unenforceable. Therefore, no benefits will accrue to Mike Roussos as a result.
”No money has changed hands … so far,” said Mashatile.
The GSSC has paid Capstone R52-million for ”all sorts of services”, but the company has not been audited, ”therefore we have taken steps to ensure we correctly value the company”, the minister said.
”I want to know what the R52-million was paid for.”
The auditor general’s investigation into the books of the GSSC and Capstone, instituted on July 14, will probably be released later this week.
The report also found other problems in the GSSC relating to forward payments, Mashatile said.
Moleketi is now the national Deputy Minister of Finance.
In 2002, Roussos — as chief executive of the GSSC — wanted to leave the government because he could earn more money in the private sector.
”The MEC at the time did not want to lose his contribution to the GSSC and persuaded him to extend his contract by another two years,” Mashatile said. ”The MEC then briefed the premier about possible ways of incentivising Mr Roussos.”
This led to the formation of Capstone, with the shareholders’ agreement signed by Roussos and Pradeep Maharaj, acting on behalf of the department of finance and economic affairs. — Sapa