The Special Investigating Unit (SIU) this week confirmed that probes, started at the beginning of August into the government acquisition of property, constituted one of the largest by the corruption-busting outfit.
This comes after a raft of revelations about allegedly dodgy leasing agreements, such as those involving National Commissioner of Police General Bheki Cele’s new R500-million headquarters for the police and last week’s Mail & Guardian revelations that Mpumalanga premier David Mabuza allegedly attempted to push through the purchase of a building for R458-million — more than four times the independently evaluated price.
A spokesperson for the SIU, who declined to be named, told the M&G this week that President Jacob Zuma had issued a proclamation on July 30 mandating the SIU to “investigate concerns in the Department of Public Works” over the irregular procurement of goods and services, including leased accommodation, and irregular or fruitless expenditure.
This is “one of the biggest ever launched” by the SIU, the spokesperson said.
The Mpumalanga government this week confirmed that it was backtracking on an agreement to purchase the building, situated at Riverside Park on Government Boulevard, Nelspruit, which has been independently evaluated at just over R112-million.
In a written response to the M&G, David Nkambule, the Mpumalanga department of pubic works spokesperson, said: “It became apparent that the process followed in the acquisition fell outside the scope of the provisions of the relevant guiding prescripts.”
He added that the provincial government had also agreed with the seller, Sharon Miranda Pillay, the sole director of Hardplay Investments 6, to re-evaluate the properties to determine “the fair market value” and “take an informed decision on the most appropriate way forward in consultation with the national treasury”.
At the time of going to press on Thursday, the department was unable to detail the extent of the violations of the government spending controls outlined in legislation such as the Public Service Act and the Public Finance Management Act.
The department was also unable to reveal:
- Whether disciplinary action would be taken against officials found responsible for irregular procurements that may have arisen from the purchase; and
- What financial loss the government might incur, given that the department of public works’s accounting officer, Mathew Mohlasedi, signed an offer to purchase the property in January this year.
The M&G last week reported on allegations in papers lodged in the Labour Court by Priscilla Nkwinika, the suspended former head of Mpumalanga’s public works department, that Mabuza had personally approached her on two occasions to push through the exorbitant deal.
Through his spokesperson, Mabutho Sithole, Mabuza this week denied the allegations, calling them “strenuous” [sic] and “unfounded”.
Other attempts were made to push through the deal. The Mpumalanga executive council (exco) was called together on December 29 last year, during the holiday recess period, and presented with a memorandum proposing the purchase of the buildings. The memo said negotiations with the owners were “at an advanced stage” and “both parties [had] agreed in principle on a purchase price of R458-million”.
The memo, which is in the M&G‘s possession, makes no mention of the independent evaluations conducted on the buildings earlier that year that had determined a price less than a quarter of that suggested in the memo.
The official allegedly responsible for drafting the memo, Mathabatha Mokonyama, the deputy director general for public transport and traffic management, did not sign the mandatory declaration confirming that the memo adhered to exco guidelines or that the information provided was accurate and reliable.
But Mokonyama denied drafting the memo, telling the M&G he was on leave from December 15 last year until January 10.
Mohlasedi, the head of department appointed to the post on December 15, and Clifford Mukasi, the public works provincial minister, approved the memo.
Notices for the department of public works’s 2010/2011 medium-term expenditure framework, also in the possession of the M&G, show that the provincial finance department then made additional allocations for the purchase of the buildings soon afterwards. The offer to purchase was signed by Mohlasedi on January 24.
The M&G attempted to contact Mohlasedi but he had not responded to messages at the time of going to press.