/ 7 September 2018

Duarte link surfaces in Zondo inquiry

Please explain: The Zondo commission has approached the state-owned South African Forestry Company.
(Oupa Nkosi)

Zondo commission investigators have their sights on a state-owned entity (SOE) whose chief executive allegedly awarded a dodgy contract worth more than R10-million to his business associates — the former husband and the son of ANC deputy secretary general, Jessie Duarte.

The South African Forestry Company SOC Ltd (Safcol) is worth more than R3-billion and is involved in timber harvesting and processing and related activities. It is one of the SOEs being investigated after allegations of state capture by those close to the Gupta family were revealed.

The Mail & Guardian has established that investigators of the commission into state capture, led by Deputy Chief Justice Raymond Zondo, have approached the Safcol board regarding the December 2015 multimillion-rand tender that was allegedly awarded by its then acting chief executive, Harvey Theron, who is now a board member.

Safcol board chairperson Lungile Mabece confirmed that the board had received a letter from the commission but said there had been no details.

“The only thing that has happened — there is a letter that was written by someone from the commission to the minister of public enterprises, where they indicated that they would like to confirm the support and available assistance from the state-owned companies. That letter was forwarded to Safcol for the purpose of confirming that they will be able to support and procure whatever evidence that has been identified.

“There has not been other communication to say that, ‘here are the contracts we would like to be looked into’. In fact, anything that may come or be linked to Safcol we have indicated that we will immediately secure those and comply,” Mabece said.

Theron allegedly approved the awarding of a tender to Analytical Risk Management, a company linked to his business partners, who include John Duarte, Jessie Duarte’s former husband, their son, Yusha Duarte, and Malcom Mabaso, the former adviser to former mineral resources minister Mosebenzi Zwane.

Yusha and Theron were groomsmen at Mabaso’s wedding in 2015 and Mabaso’s mother, Linda Mabaso, was the board chairperson of Transnet at the time.

READ MORE: ‘My son-in-law made a mistake’ — Jessie Duarte

The contract awarded to Analytical Risk Management, which traded as 2RM, was to conduct a due diligence investigation into Safcol’s performance and financials. Normal tender processes were not followed and 2RM is currently under business rescue.

The contract followed the resignation of chief executive Nomkhita Mona and chief financial officer Zoliswa Mashinini in December 2015. They had refused to sign the contract and appoint 2RM without any competitive tender bidding process being followed.

The company and Theron’s Prospero Digital Agency were, in 2016, listed on Vumela Holdings’ website as its subsidiaries. Vumela Holdings was at the time run by Mabaso, John and Yusha Duarte, but Theron never declared a possible conflict of interest by awarding the contract to his business associates.

When the Business Times reported on the allegations, Vumela Holdings took down its website and any references to Prospero Digital Agency. Theron also denied any links to John Duarte.

The board had said at the time there was an urgent need for Safcol to deviate from normal tender processes because of the “sensitive nature” of the due diligence exercise. As chief executive, Mona insisted the tender process should be open, but was then forced to resign. Theron stepped in as acting chief executive and allegedly ensured the tender was awarded to 2RM.

The board requested the former public enterprises minister, Lynne Brown, to approve the appointment of 2RM without following normal tender processes but she referred the matter back to the board.

The M&G has established that Zondo commission investigators have conducted interviews with Safcol employees but there are concerns that some evidence might have been lost because the company’s server had crashed at some point.

Approached for comment, Theron said he had not received any communication regarding a Zondo commission investigation. Asked whether he believed that the appointment of 2RM was above board, he did not comment.

John Duarte did not respond to the M&G’s request for comment.