The Rhodes University-based Public Service Accountability Monitor (PSAM) has questioned Gauteng Integrity Commission Jules Browde’s decision to clear Gauteng finance minister Paul Mashatile of an alleged conflict of interest.
The PSAM suggested Browde took too narrow a view of the executive ethics code, which regulates ministers’ financial conduct.
The Mail & Guardian reported earlier this year that Mashatile twice declared an interest in a company that benefited from a multimillion-rand contract with the Gauteng government.
Asked to investigate, Browde this week announced he had cleared Mashatile of impropriety. He said the minister had erred in declaring a 15% interest in Gadlex Holdings to the Gauteng legislature as he had never in fact owned the shares.
Gadlex Holdings owns 97% of Gadlex, Business Connexion’s 25% BEE partner. The latter has a contract with the Gauteng Shared Services Centre, which falls under Mashatile.
The M&G disclosed that Mashatile declared his shareholding in Gadlex Holdings in September 2004. In March this year, he again declared his interest, mistakenly calling the company ”Gadlex Investments”.
Asked in July how he justified his interest in a company that did business with an agency falling under him, Mashatile said he had never owned the shares. He said he was offered a share option before his current ministerial term started in May 2004, kept the option open until last year, but did not exercise it.
Browde insisted this week that Mashatile had neither owned nor had an option to own the shares, adding: ”Disclosing what he did, as well meaning as it was, led to the reasonably mistaken perception expressed by the Mail & Guardian, and you were entitled to say what you did.”
He said he had spoken to Gadlex Holdings’s four directors, IT entrepreneurs Benjamin and Isaac Mophatlane, former parliamentary communications committee chairperson Nkenke Kekana and Bridgman Sithole, a former finance coordinator in the ANC’s elections department.
”If Mashatile had an option on those shares, they would be obliged to give them to him. But they haven’t. They laugh when they think about it. These shares are very valuable; he has no right to them at all,” said Browde.
But, the PSAM’s Adrienne Carlisle said she was surprised Browde had concluded there was no conflict of interest.
”The executive ethics code directs that [provincial ministers] may not expose themselves to any situation involving the ‘risk’ of a conflict between their official responsibilities and their private interests,” Carlisle stressed.
”Browde’s report pays attention to only one aspect of the code — that an MEC must actually hold a financial or business interest that gives rise to a conflict of interest. But Mashatile’s explanation that he was afforded an option to take up shares in Gadlex confers on him a right to exercise such an option and clearly represents an interest which has all the inherent risks which the code intended to prevent from occurring.”
Carlisle said the offer could be perceived by the public as an attractive incentive to ensure long-term and lucrative contracts for an individual, entity or third party. ”In the PSAM’s view, this clearly represents a conflict of interest.”
This week, Browde found Gauteng education minister Angie Motshekga had failed to declare an interest in companies owned by her husband and member of the Gauteng legislature Mathole Motshekga. She grudgingly apologised to the legislature on Monday, saying those responsible for the finding should explain it in writing.
Gauteng speaker Richard Mdakane was also cleared of an alleged failure to disclose interests.