/ 24 May 2013

Health honcho silent on R1m from shady builder

[Photo: Leon C Ferris]
[Photo: Leon C Ferris]

Northern Cape health’s Gugulethu Matlaopane received R1-million from a housing graft suspect


The head of the Northern Cape health department, ­Gugulethu ­Matlaopane, this week refused to explain a mysterious R1-million transfer to her account from a building contractor who allegedly accepted millions in municipal payments for houses that he failed to build. The Mail & Guardian has seen a draft report of an investigation by the Special Investigating Unit (SIU) showing that R1-million was paid to Matlaopane in the first year of a massive low-cost housing scheme funded by the Naledi (Vryheid) municipality in North West. According to the report, the contractor, Frank Khotso Khasu, completed only four of the 3 500 houses envisaged by the project, despite his company, Khasu Engineering Services, receiving the full R86-million contract price. Last week, the M&G reported on a draft cash-flow analysis by a forensic accountant that revealed that Khasu moved millions of rands through at least 167 accounts during the first year of the contract, many held by friends, business associates and relatives. Matlaopane, Khasu’s partner in two businesses, was one of the beneficiaries. Gugulethu Matlaopane Last week, she refused to answer questions about the payments on the phone and then failed to answer written questions sent by the M&G to the address that she supplied in the Northern Cape government. Approached once more this week, she claimed that she was no longer in partnership with Khasu, despite official company records showing otherwise. Asked again about Khasu’s payments to her account, she once more asked for the questions to be sent to her. No response had been received by the time of printing. The transfer came in eight erratic instalments between July 2008 and April 2009. Different amounts ranging between R50 000 and R500 000 were transferred and the deposits were not made on the same day of the month. The SIU report notes that the payments to Matlaopane may have been related to the construction project, but highlights the fact that the money was paid into her personal, not business account, and that she was linked to Khasu through business ventures. The SIU report states that between June 28 2008 and May 25 2010, the Naledi local municipality paid R27-million to Khasu Engineering and the remaining R58-million was paid into Khasu’s personal accounts. A site inspection report indicated that work worth only R20-million was done on site. Back story Matlaopane appears to have been unemployed at the time she received the money, according to one of her current colleagues and another who employed her at one time. However, as she did not respond to questions, this could not be verified. During the period 1994-1999, Matlaopane was the head of the Independent Electoral Commission in the Northern Cape, and Khasu was her counterpart in North West. The two went on to form two companies together in 2001, Ubunye K and K Project Management, and Khotso Matlaopane Election Management in 2003. They are still active directors of the election management business, according to Cipro records. The latest available statistics for the Naledi local municipality in the North West indicate that about 11 000 people are still without houses. Municipal officials told Parliament last year that the bucket system was still the norm for many of these people. Anger and fast-tracking In 2007, community members stormed the Naledi municipality’s offices demanding that it deliver on its promise to build houses. They held officials hostage for four hours. The municipality responded by adopting a turnkey strategy that involved the bypassing of tender processes, allegedly to speed up the appointment of a contractor. Khasu Engineering was appointed. The SIU report noted that, despite the municipality’s claims that it had to bypass the competitive bidding processes, the appointment was irregular. The project fell apart almost as soon as it began and Khasu quickly claimed he was being underpaid by the municipality. The SIU investigation found he had invoiced the council for millions of rands for work that was not done or completed. He took it to court in 2010, claiming he was still owed R7-million. His claim was dismissed, but Khasu is allegedly appealing. Despite his claims that the project had failed because he was underpaid, the transfer of money to Matlaopane and others, including his wife Ouma Khasu, continued. Among his other suspicious transactions was the transfer of R5-million to a firm of attorneys for property purchases, including a farm in Gauteng, according to the deeds office. Khasu did not respond to attempts to contact him on the phone and by SMS. * Got a tip-off for us about this story? Email [email protected] The M&G Centre for Investigative Journalism, a non-profit initiative to develop investigative journalism in the public interest, produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.