/ 7 August 2009

A little business goes a long way

Almost half of all directors general in government departments have private business interests, the Mail & Guardian investigation can reveal. In addition, almost all other heads of government departments are registered as directors of various private business concerns.

Vusi Mavimbela, the director­general in the Presidency, holds shares in companies that get lucrative business contracts from government. Mavimbela, who was appointed by President Jacob Zuma last month, is listed on the company register (Cipro) as a director of about 18 companies, including Group Five, which has extensive construction contracts with the government.

Vusi Mona, deputy director general of communications in the Presidency, said this week that Mavimbela had resigned his directorships of all companies that were active and which could possibly be doing business with government or might in future.

They included Group Five, Imbiza Mineral Holdings, Ilembe Airport Construction Services, Mvelaphanda Group and Lexshell 650 Investments, which held Mvelaphanda’s interests in Group Five.

Mona said that while Mavimbela was still a shareholder in all these companies, he had declared his interests to the government.

Human Settlements Minister Tokyo Sexwale also held shares in Group Five and Mvelaphanda Group, but has transferred his shares to a blind trust over which he has no control.

Mona said Mavimbela did not remember his directorships in other companies registered under his name, such as the First African Independent Broker, Siyafunda Training and Development, Evaton-Sedibeng Brokerage Consultants, Jadilevu Construction and Training, Sihlangene Training Services, Pacfin South Africa Trading Enterprise, Siyasondela Development, Ziltrex 83, Siyamba Minerals Holding and Golden Falls Trading. He said four of Mavimbela’s companies — Marematlou Investment Holdings, Smartnose Wines, Malundi Investment Holdings and Ndzalo Mining — were dormant.

The involvement of politicians and senior government officials in companies that do business with government has raised serious questions about conflicting interests.

Jay Kruuse, head of the public service accountability monitor based at Rhodes University, said it was not enough for senior public servants to declare their business interests to the government.

”Given the ongoing presence of widespread conflicts of interests, it is understandable that people should wish there to be a blanket ban on government employees having business interests in entities which do work for the state,” said Kruuse.

Themba Godi, chairperson of the standing committee on public accounts (Scopa), which is the parliamentary watchdog committee, said: ”Directors general should be prohibited from being involved in business altogether. The current legislation says government employees should declare and get permission to do business.

”Our position is that even if people have permission, it raises ethical questions for them to be involved in business activities.

”If you are a director general, it is like insider trading. You know everything about how the department works. Influence is definitely exerted on your colleagues to get the things to go your way.”

However, a senior government official in the presidency said the Constitution did not prevent government officials from having business interests. ”Does it mean that if people leave business to join government, they should become poor? It doesn’t work that way.”

Other senior government officials identified by the M&G as being involved in private business include:

  • Home Affairs director-general Mavuso Msimang, who is listed as a director of Zatic Holdings, which runs the Holiday Inn in Soweto.
  • Msimang told the M&G this week he had resigned as a director of Zatic Holdings. Asked if he still held shares, he said: ”I might have 7% shares; I’m not sure. Whatever I am doing [privately] I declared.” He said that while he was a board member of the African Parks Network, Peace Parks Foundation and the iSimangaliso World Heritage Site, he had not received a cent from these entities.

  • The defence department’s acting director general, Tsepe Motumi, is listed as a director of Chancellor House Defence Dynamics and Smokey Mountains Trading 573. This week he said he had resigned from both companies. Chancellor House Dynamics is part of the ANC’s front company, the Chancellor House Group. The auditor general has cautioned that Motumi’s involvement in Chancellor House, while he was employed by the Defence Department could give him an unfair advantage enabling him to use inside knowledge to trade in the arms industry.
  • Health Department director-general Thami Mseleku is one of the senior government officials who failed to declare his or her private business interests, according to Public Service Commission documents. Cipro lists Mseleku as a director of Mseleku Brothers Investments. According to Cipro, he has resigned as director of Lilitha Mining, although Mseleku said that he was never involved in the company.
  • He said Mseleku Brothers Investments was established only recently and had not yet done business. He had since made financial disclosure for the current year to the Public Service Commission and disclosed his involvement in Mseleku Brothers Investment.

  • Public enterprises director general Portia Molefe is listed as a director of Maruong Trading and Mphutungwane Consulting, but her spokesperson, Ayanda Shezi, said this week that Molefe has resigned from the two companies, which were closed down in February this year.
  • ”Her interest in these companies were declared in line with public service regulations,” said Shezi. She said Molefe’s only business interest was in Sasol, where she had about 130 shares that she acquired last year through the Sasol Inzalo BEE initiative.

  • Agriculture director-general Njabulo Nduli, who was reportedly given special leave by her boss, Tina Joemat-Pettersson, this week, has interests in property and mining. Her companies include Yomama Mining, Eagle Valley Properties and In the Know Consulting. Nduli was not available for comment at the time of going to press.
  • Social development director-general Vusi Madonsela has declared his interest in seven companies, mainly in the mining industry. But his spokesperson, Zanele Mngadi, said this week that all Madonsela’s companies were now dormant.
  • Justice Department director-general Advocate Menzi Simelane is listed as a director in Lehlabile Transporting and Earthmoving, but he vehemently denied any link to the company. Simelane said he was not aware that a group of individuals who had approached him with a business proposition had eventually registered a close corporation where he featured as a member in the business entity.
  • ”He neither consented nor did he sign any documentation to be part of that business entity. This he did not declare as he was not aware of it,” said justice ministry spokesperson Tlali Tlali. Simelane said he does not hold shares in any company.