The public protector's investigation into Julius Malema's company has put his financial security on the line.
During the release of the "On the Point of Tenders" report on Wednesday, Public Protector Thuli Madonsela stopped short of actually declaring that corruption had been at the root of a highly irregular tender worth around R50-million, originally being awarded to a company from which Malema had benefitted – but only because the Hawks are currently investigating exactly that.
But the action she recommended, and in some cases commanded, from other organs of state hold dire consequences for those involved in On-Point Engineering and its dodgy deal with the Limpopo department of roads and transport.
Among the findings of the report were acts of corruption, fraud, maladministration, improper enrichment at the expense of the state, and the report provided sufficient evidence for investigation, if not prosecution. And Madonsela has set a range of agencies to the task.
Perhaps most seriously, the report directs both prosecutors and the Asset Forfeiture Unit to conduct an investigation, including "a thorough scrutiny of the relationships between the representatives of the shareholders of On-Point, the top management of the [Limpopo department of transport]", and various decision-makers in the Limpopo government. Those shareholders include Malema, who according to business partner Lesiba Gwangwa was brought into the deal specifically because of his connections.
Gunning for assets
The protector also wants the master of the high court to look at the affairs of the trusts used by Malema and Gwangwa to siphon money from the Limpopo government, by way of On-Point; the master too has powers that could lead to the eventual seizure of property bought with the proceeds, which Madonsela has found strong indications could include at least a farm and a Sandton house for Malema.
Madonsela also wants the state attorney to institute legal action to recover money she says was paid to On-Point on the basis of fraud, which in itself could result in assets being seized.
But the state attorney and Asset Forfeiture Unit may have to get in line: the South African Revenue Service is also going after Malema's assets, on the basis of a tax judgment, and has reportedly already seized some of his properties.
Several officials in the Limpopo government might not stand to lose homes unless they are found to have been bribed during the debacle, but face disciplinary action that could see several lose their jobs. Some, the protector said, failed "to perform their functions diligently" – perhaps enough so to face immediate dismissal.
'Guilty in absentia'
Meanwhile Malema lashed out at the protector on Wednesday, saying she found him "guilty in absentia".
"You can't find a man guilty in absentia," Malema said at Slovo Park informal settlement, west of Johannesburg, according to an SABC report. "You cannot say to a man in absentia: 'You are guilty and therefore we are going to take everything you have and let you walk naked'."
"Those who respect the law, they must treat all of us equally," he said.
After she received three complaints in July 2011, Madonsela decided to investigate the allegations that the department of roads and transport corruptly awarded the On-Point tender.
Also under scrutiny were claims that Malema used his political position to influence the awarding of tenders by the department and the Limpopo government in general.
She also investigated whether Malema's Ratanang Family Trust and/or Malema improperly benefited from the tender awarded to On-Point. The total amount paid by the department to On-Point in terms of the contract at the end of June 2012 was R43 868 900.
A misrepresented company
The bid presented by On-Point in respect of the project management unit tender deliberately and fraudulently misrepresented the profile, composition, experience and therefore the functionality of the company.
It was claimed that On-Point was an established and experienced operation with management teams and professional staff that complied with the requirements of the request for proposal.
But at the time of the bid, the company had existed for only a month and had no employees or several of the purported key management and staff. "The shareholders of On-Point, including the Ratanang Family Trust, benefited improperly from the tender that was awarded to On-Point," Madonsela said.
She said the state attorney should institute legal proceedings against On-Point and shareholders who benefited from the PMU tender, to recover money to which the department was entitled. – Additional reporting by Sapa