A series of suspicious payments, emanating from the heist of the VBS Mutual Bank, link Economic Freedom Fighters MP Floyd Shivambu’s brother Brian to a cousin of EFF leader Julius Malema.
The payments, totalling more than R5-million, were made between June 2017 and February 2018 from Brian Shivambu’s Sgameka Projects to Mahuna Investments, a company solely owned by Malema’s cousin, Matsobane Phaleng.
The Mail & Guardian has established this from three independent sources.
The payments range between R1-million from June 9 last year to R500 000 on February 5 this year.
Brian Shivambu’s links to the VBS heist first emerged earlier this month when the South African Reserve Bank’s report, by Terry Motau SC, revealed he had received about R16-million in “gratuitous” payments, which Motau said had “no lawful cause whatsoever”. The payments between Sgameka and Mahuna are derived from these payments.
Brian Shivambu has denied receiving the money illegally, claiming he was paid by Vele Investments for consultancy work he had provided. Vele Investments is one of the major shareholders in VBS. According to Motau, it is among the companies that, with its associates, looted R936 669 111 from the bank.
The report has been referred to the Hawks and the National Prosecuting Authority for criminal investigation and prosecution.
The M&G understands that the payments made by Brian Shivambu to Phaleng and the payments he made to his brother, Floyd, are being investigated by the banks whose accounts were used to transfer the money flagged by Motau.
In all, Brian Shivambu, through Sgameka, paid Phaleng’s Mahuna Investments R5.9-million in nine transactions of varying amounts.
It is unclear what the purpose of the payments were. Both declined to comment on whether they had any contractual agreements and what services were rendered.
This week Brian Shivambu said: “I’m taking legal action against the VBS report and wouldn’t want to respond to questions about issues that will be under court process. Please allow me to deal with this matter through the court processes.”
Phaleng also declined to comment on the payments, saying his company was not implicated in Motau’s report.
“After carefully reading of the VBS report and consulting with our team, we couldn’t find our name implicated in whatever way possible, and we wish not to get involved. I will advise that you send all your inquiries to Sgameka,” Phaleng said.
At a press briefing last week, Malema rallied behind his lieutenant, saying Floyd Shivambu had provided the party with his bank statements and the party could not find anything untoward. Payments made by Brian to Floyd were of a kind that were normal between siblings, he said.
Speaking to the M&G from Rwanda on Thursday Malema said he did not know anything about the payments nor any business relationship between his cousin and Shivambu’s brother. “I am not involved in this thing of Matsobane, he must answer for himself.”
“Yes he’s my cousin, but we are not close … My grandmother had nine kids … I have many cousins and I am not close with all of them.”
He previously told the media that people with evidence that the EFF had benefited from VBS should approach the party.
A search of the South African Revenue Service’s (Sar’s) value-added tax vendor search portal showed that neither Mahuna Investments nor Sgameka Projects were registered for tax. Sars had not commented at the time of going to print.
Sars regulations require a company with a turnover of more than R1-million annually to pay tax.
Mahuna Investments’ business is described as “not restricted” on its company registration forms. A Google search for the company turned up nothing except its registration details.
Phaleng made headlines in 2012 when controversy erupted in Limpopo about a group of politically connected people who were awarded school-feeding scheme contracts in various district municipalities.
It was alleged then that the individuals, which included another of Malema’s cousins, Tshepo Malema, and his then bodyguard and security adviser, Jabavu Olifant, had not delivered food to schools. The contract lapsed in 2013.
Phaleng, through his company Tsa-Tshidi Trading, was awarded a contract in 2011 worth R5.51-million to deliver food to the Sibasa Secondary School in Thohoyandou. Tshepo Malema, who is close to Julius, had two contracts, one for R5.22-million to deliver food to the Vhuronga Secondary School in Thohoyandou and one for R3.33-million for the Pietersburg Primary School.
At the EFF press conference, Floyd Shivambu said his brother would pay back the money he received from Vele Investments if he was advised to do so by law enforcement agencies.
Brian Shivambu has said he was not given an opportunity to give Motau his side of the story.
The party found itself in an unenviable position this week when Parliament debated the VBS scandal. Floyd Shivambu was heckled with cries of “pay back the money” from all benches. The call was made famous by the EFF in its efforts to force former president Jacob Zuma to account for state-funded nonsecurity upgrades at his Nkandla residence.
During the debate, DA MP Phumzile van Damme said: “We can no longer have our people misled by wolves in wool dyed red, proclaiming to care about them. They must be exposed for who they are — corrupt eatists.”
Two weeks ago, the M&G revealed how Floyd Shivambu in text messages provided a business account number for his brother’s other company, Grand Azania, to a businessperson at the centre of Public Investment Corporation investigations, Lawrence Mulaudzi.
The same account number has also been linked to suspicious VBS payments. Mulaudzi told the M&G at the time that he had paid Grand Azania for services rendered.
Absa, at which Mahuna banks, said: “We are always conscious of our obligations in terms of the Fica [Financial Intelligence Centre Act] and other local and international law enforcement obligations to combat financial crime, and inform or co-operate with the relevant authorities whenever this is required.”
One of Brian Shivambu’s banks, First National Bank, said it was aware of the VBS report and that it “complies with all anti-money laundering and regulatory practices in South Africa” and “the bank is currently reviewing the report”.
A banking source said that inexplicable movements of money can be investigated using the concept of ultimate beneficial ownership, which financial institutions and authorities use to trace illicit flows of money.
Ultimate beneficial ownership distinguishes between legal ownership of an entity through which money flows and actual control of the entity. This is in accordance with a guidance note compiled by the Finance Intelligence Centre on the implementation of Fica.