An interest-free loan to his wife was not an incentive for Social Development Minister Zola Skweyiya to award a government contract to a company, the Public Protector said on Thursday.
The announcement was part of an investigation by advocate Lawrence Mushwana into an interest-free home-improvement loan of R65Â 000 to Skweyiya’s wife. The loan was made by Sandi Majali, the MD of Imvume Management.
Imvume allegedly paid R65Â 000 for the improvements to the minister’s Waterkloof home in order to ensure that Skweyiya would use his influence to secure business for the company. The loan was paid back in 2004.
A company in which Imvume has interests, IT Lynx, was awarded a contract to distribute social grant payments on behalf of the state. The contract was worth an estimated R500-million.
“The final adjudication of the tender took place in May 2002 which was a year and seven months before the loan was granted,” Mushwana said.
He said it could therefore not have posed a risk in respect to the awarding of the tender.
The loan could only have been considered an “award” if Skweyiya knew Majali or Imvume had links to IT Lynx, which he did not. There were also no indications in the tender documents that Imvume had interests in IT Lynx.
Mushwana, however, found that Skweyiya failed to disclose the loan as required by Parliament’s Executive Ethics Act. “In this regard it was noted that he has apologised to Parliament for not disclosing the said benefit,” Mushwana found in his report.
In an unrelated move, the Treasury has stopped the IT Lynx contract, citing problems with its compliance with Treasury legislation. The contract was suspended pending the outcome of a court case brought by IT Lynx against the State Information Technology Agency and others.
The Mail & Guardian‘s Oilgate exposé in May last year revealed that Imvume had diverted R11-million in state oil money to the African National Congress. This caused a public outcry.
Imvume obtained a gagging order against an M&G follow-up revealing that payments were also made to a brother of Deputy President Phumzile Mlambo-Ngcuka and towards the renovation of Skweyiya’s private home.
The gagging order was dropped after the Freedom Front Plus revealed the same information under the cover of parliamentary privilege.
Imvume then initiated a set of legal proceedings aimed at uncovering how, and from whom, the M&G obtained proof of the payments from its bank account.