Zuma crony linked to Swazi fraud and bribery scandals

Former Swazi chief justice Michael Ramodibedi (left). (The Nation)

Former Swazi chief justice Michael Ramodibedi (left). (The Nation)

An enigmatic businessperson and Zuma family associate is embroiled in an extraordinary saga of alleged customs fraud that has seen the Swazi chief justice and minister of justice sacked and charged with corruption.

Taiwanese-born Jen Chih “Robert” Huang is linked to recent events in Swaziland by his import-export company, Mpisi Trading 74, and through a close associate, Chien-Fen Lee.

Huang has been associated with Zuma’s nephew, Khulubuse, the president himself and his lawyer, Michael Hulley. (See “Plot thickeners: Huang, some Zumas, a Hulley” below)

On April 20 this year, the then Swazi justice minister, Sibusiso Shongwe, was arrested by the Swazi Anti-Corruption Commission, setting off a chain of events that has rocked the kingdom and appears to point back to South Africa and companies linked to Huang.

Shongwe, since stripped of his Cabinet post, has been charged in connection with a bribe allegedly offered to the then Swazi chief justice, the controversial Michael Ramodibedi.


Sibusiso Shongwe

Ramodibedi is a Lesotho-born judge, who has faced impeachment in his own country.

According to the Swazi charge sheet and evidence presented at subsequent Swazi impeachment proceedings taken against Ramodibedi, Shongwe approached several judges, including Ramodibedi, with offers of a bribe to rule in favour of Impunzi Wholesalers, which was in a R10-million dispute with the Swazi Revenue Authority (SRA).

The company is registered in Swaziland, but evidence presented in court by the commissioner of the SRA and investigations by amaBhungane show a web of connections between Impunzi and Huang’s company, Mpisi.

Since July last year, Mpisi and other assets attributed to Huang have been placed under curatorship. It followed a seizure and preservation order obtained by the South African Revenue Services (Sars) as security for tax claims amounting to more than R540-million from Huang and his companies.

Mpisi was also involved in the importation and subsequent donation of 181?300 ANC-branded yellow T-shirts before the elections in May last year.

The T-shirts were part of a larger shipment of clothing and quilts stopped by Sars and became the subject of intense negotiations and threats of litigation between the ANC and Sars to secure their release in time to be distributed to ANC supporters.

Sources sympathetic to the then Sars acting commissioner, Ivan Pillay, claimed his refusal to bend the rules for the party played a role in him becoming a political target.
He was suspended and resigned earlier this year following allegations that he had presided over a “rogue unit” at Sars.

The same unit, which Pillay maintained was legal, had begun investigating Huang, and the same sources said this was among its most sensitive cases that were the real reason why the unit was shut down.

It appears that the quilts and T-shirts might have been from the same place as the items at the centre of the Swazi imbroglio.

In affidavits setting out the genesis of the dispute with Impunzi, the SRA commissioner, Dumisani Masilela, said Impunzi began importing quilts into Swaziland in November 2013. He said the revenue authorities picked up anomalies, including the valuation of the quilts for the payment of customs duties. They were valued by Impunzi at $1.50 each, which raised suspicions at the SRA, given that investigations showed that the same items were declared as being worth 10 times that when being imported into South Africa.

The commissioner said: “The other peculiar circumstances with these items is that they would arrive through the Durban port and then be transported to Swaziland. They would be imported through Swaziland and immediately taken to South Africa.”

He said the facts available suggested the SRA had been cheated of revenue of between R10-million to R25-million.

“The very modus operandi of moving the items from Durban harbour into Swaziland and then Johannesburg, after they have been cleared, is suspicious.

“Swaziland cannot be used as a conduit pipe for such illegal underdeclaration in the common customs union area.”

Swaziland is part of the Southern African Customs Union, which means that, if duties are paid in Swaziland, then they do not have to be paid again in South Africa.

In another affidavit, the SRA commissioner said Impunzi exported the quilts to South Africa to a company called Kimbravect.

“Kimbravect is the sole purchaser of [Impunzi’s] goods. The information at hand indicates that the very same company imports the very same items from China, from a company called Canfox Trading. For the record, this [Canfox] is the same company which [Impunzi] was paying for the goods.”

This is where Mpisi comes in. In an affidavit submitted in support of the Sars application to place Huang’s assets under curatorship, a senior Sars enforcement official, Pieter Engelbrecht, links Kimbravect to Mpisi.

He said: “It appears that Mpisi is continuing to make use of various entities … as conduits for the flow of funds”, and cites Kimbravect as an example, noting that payments of amounts owing on Mpisi’s customs account were made by Kimbravect.

“The director of Kimbravect is also an employee of Mpisi,” Engelbrecht adds.

The sole director of Kimbravect is Lucien Wax. When asked about the Swazi case this week, he did not deny links to Mpisi and Huang, but said he would get someone to call back. No one did.

The Chinese company identified by the Swazi authorities, Canfox Trading, also appears to lead back to Mpisi. Canfox is registered in Hong Kong, with the sole director being Haipeng Mu. A man with the same name is listed on a South African database as being an employee of Mpisi.

The Swazi commissioner adduces one further piece of evidence. Following queries by the SRA about the correct duties payable, Swazi railways refused to release an imported consignment to Impunzi, and there were several meetings to resolve this issue.

The commissioner said that at at least one meeting Impuzi was represented by its Swazi director, Thembisa Matsebula, and “a certain Chien-Feng Lee”.

According to the Sars affidavit, a Chien-Feng Lee is a shareholder in Mpisi and is also listed as a member of the key management of Mpisi.

There is another twist to the tale that led to the charges being brought against the Swazi justice minister and the chief justice and the unravelling of the scandal.

Following the detention of the goods, Impunzi went to court to challenge the SRA.

The case was heard on December 16 last year by Swazi High Court Judge Stanley Maphalala, who on February 6 this year ruled in favour of the SRA.

A day after the initial hearing, R1-million in cash was deposited in a South African bank account controlled by Shongwe. Two days later, another R1-million in cash was deposited.

The deposits to Shongwe were made at two Johannesburg branches of First National Bank, in Eastgate and in Crown Mines, and clearly raised red flags – the Swazi Anti-Corruption Commission was tipped off and began an investigation.

The commission is still investigating the source of the funds and so far there is no evidence linking the payments to any of Huang’s companies.

But the deposits triggered a preliminary charge to be laid against Shongwe.

The investigations also led to Ramodibedi.

In an affidavit obtained by amaBhungane, dated June 2 this year, Ramodibedi’s former colleague, Judge Mpendulo Simelane, described how early this year he was summoned to Shongwe’s home to discuss something sensitive.

Simelane’s statement said Shongwe revealed that Ramodibedi was struggling financially, but there was money to be made from cases over which the judges were presiding.

“He then told me that he has a case involving some wealthy businessmen operating a company called Impunzi Wholesalers who are suing Swaziland Revenue Authority for some goods which were imported into the country.

“He said the wealthy businessmen are prepared to give us a sum of two-million emalangeni [about R2-million] if we can help them win the case.

“He said he wants me to preside over the case and I will get E200?000, the chief justice will get E500?000 and he will keep the balance.

“I told him that I do not accept bribes and that this borders on corruption. He further told me that he has discussed the matter with the chief justice and that he should allocate the case to me. I refused the offer and left his house and proceeded to work.”

Simelane said that, just before he got to his chambers, he got a call from the chief justice saying there was an urgent matter involving imported goods that he had allocated to Simelane.

He said he told Ramodibedi his diary was too congested and he couldn’t hear the case.

“Later on I learnt through the print media that the case of Impunzi Wholesalers has been allocated to Justice Stanley Maphalata, who ruled in favour of Swaziland Revenue Authority.

“A couple of days after the delivery of that judgment, I got a call from the chief justice saying lmpunzi Wholesalers has noted an appeal against the High Court judgment and he has since set up a special sitting of the Supreme Court.”

Simelane again missed the appeal hearing, which was heard by Ramodibedi himself and two other judges, one of whom has reportedly become a state witness.

Ramodibedi ruled in favour of Impunzi on March 13, overturning the High Court ruling – but a month later the tide turned against him. A warrant was issued for his arrest on April 17 for corruption and abuse of power.

To avoid arrest, he barricaded himself in at his government residence, and, on May 6, he was suspended, pending impeachment proceeding by the Swazi Judicial Services Commission (JSC).

At the JSC, he was charged with three counts of abuse of office, which included the Impunzi case.

Following a JSC recommendation to King Mswati, Ramodibedi was sacked and he left Swaziland on June 20. He is believed to be back in Lesotho.

Shongwe was recently released on bail, and the commission’s investigation is continuing.

Responses
Questions about Huang, Mpisi, Sars and the Swazi connections were sent to Sars and to Huang’s attorney, Michael Hulley. Sars did not respond.

Hulley, who is believed to be attending the Brics (Brazil, Russia, India, China and South Africa) summit in Russia with Zuma, sent a message saying he was travelling and did not have access to his email.

Mpisi’s public relations officer, Joy Meyiwa, reissued a statement from March this year that stated: “Any suggestion of impropriety concerning the businesses or individuals associated and their financial affairs is false. Any allegation of undue or improper political or other influence is false.

“The business entities and individuals concerned, together with the relevant accountants and legal practitioners have been and will continue to co-operate with the South African Revenue Service. Any suggestion otherwise is denied.

“At no stage have any of the business entities or persons set out to deliberately avoid [their] statutory obligations. In the event that any tax or customs liabilities are found to be due to Sars, this will be dealt with in accordance with law.”

  See Swazi judiciary’s lessons for SA


Plot thickeners: Huang, some Zumas, a Hulley

Following Jacob Zuma’s election as president, Robert Huang cultivated a relationship with his nephew, Khulubuse Zuma.

At one point Khulubuse was described as the chairman of Huang’s company Mpisi, though he was never registered as a director. Huang assisted Khulubuse in 2010 by introducing potential Chinese investors to rescue his ill-fated mining venture, Aurora Empowerment Systems, which also involved Zuma’s lawyer, Michael Hulley.

Khulubuse has previously stated that he ended his business relationship with Huang and resigned from Mpisi in 2011.

But Huang appears to have remained in favour. He joined the business delegation accompanying Zuma on a state visit to China in December last year and is said to have visited the president’s Nkandla house.

He discharged his previous lawyers and engaged Hulley after the Pretoria high court ruled against him and in favour of the South African Revenue Services in August 2014.

He was challenging a search operation carried out by Sars in April 2013, which delivered the documents forming the basis of Sars’s huge tax claim against him. Hulley is still representing him in litigation and negotiations with Sars.

  • A previous version of this article incorrectly reflected a picture of Khulubuse Zuma on our homepage for this article, while the article correctly reflected the picture of Swazi Chief Justice Michael Ramodibedi. This was due to a system error, which has now been fixed. We apologise for the error. 

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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.

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