Well-connected accountant coins it

Roshan Morar is no ordinary accountant. Aside from securing some of the biggest contracts from the KwaZulu-Natal and Free State governments and sitting on numerous state-owned entities that have been flagged for nefarious activities, he is also the man who bagged a R30-million contract with eThekwini that ballooned by more than 300%.

Morar, who is the Ithala Development Finance Corporation board chairperson, is at the centre of the R90-million tender controversy which has resulted in the suspension of eThekwini municipal manager Sipho Nzuza and is currently being investigated by the KwaZulu-Natal treasury.

The windfall from the city — on whose tender panel Morar sits — was followed by a R2-million personal protective equipment (PPE) contract from the provincial government to a financial services company he owns, Amakhono Capital. 

Amakhono supplied the province’s education department with 1 000 16-litre backpack spray guns at a cost of R2 070 each on May 22 this year, according to the provincial government’s Covid-19 expenditure disclosure. A second transaction for 999 units is understood to have taken place several months later, after the cut-off date in the provincial report.

This despite the fact that Amakhono has no background in the medical or protective equipment sector and was billed by Morar and fellow directors as being an empowerment vehicle aimed at offering financial services to BEE companies.

Morar confirmed both contracts, saying they were above board.

“Amakhono Capital was established as a general trading enterprise in 2004. The company supplied and delivered to the provincial government 1 999 mobile units used for Covid-19 disinfecting and sanitisation,” Morar said. He said the contract to supply was secured in accordance with both supply chain management procedures and national treasury regulations.

Out on bail: eThekwini municipal manager Sipho Nzuza hired Morar to investigate an IT system without a mandate. Photo: Darren Stewart/Gallo

“Government is currently reviewing all PPE expenditure and Amakhono Capital will gladly assist if requested to do so,” Morar said.

Morar said the eThekwini contract with Morar Incorporated had been to conduct an investigation into the city’s revenue management system (RMS).

“Our investigation has been finalised and a report with our findings and recommendations has been submitted to the city manager,” he said.

He declined to comment beyond, saying that the contract had been secured in accordance with supply chain management procedures.

Morar said treasury had not approached him regarding the eThekwini contract.

Morar, an accountant from Pietermaritzburg, has been connected in ANC circles since the early 1990s, securing lucrative work with the KwaZulu-Natal provincial government under premiers S’bu Ndebele and Zweli Mkhize. 

Morar received a series of plum posts on the boards of public entities ranging from the South African National Roads Agency (Sanral) and Public Investment Corporation (PIC) to the Passenger Rail Authority of South Africa (Prasa), during former president Jacob Zuma’s two terms of office. 

During this time, he also worked extensively for the Free State government. This was under Ace Magashule’s term as premier.

During his Sanral term, Morar came under fire in Parliament over the entity’s irregular expenditure of R1.6-billion during the 2015-16 financial year and was accused by MPs of being lax about corruption. 

The Mpati commission, which looked into allegations of impropriety at the PIC, found that while Morar was chair of the corporation’s investment committee, the committee approved a billion-rand loan to the Lancaster Group to buy a 2.7% stake in the Steinhoff Group. 

Morar had been appointed to the board of L101, a Lancaster Group subsidiary, which represented a conflict of interest. The bulk of the PIC’s R9.4-billion investment in Steinhoff through the deal had to be written off.

Morar was also recently nominated by Magashule, now ANC secretary general, for a diplomatic post via the party’s deployment committee, for 2021.

Upstanding: Roshan Morar

Back in 2017, Morar Incorporated was awarded the eThekwini contract to audit the city’s RMS contract — which had cost the city hundreds of millions of rands, but which does not function.

According to sources in the municipality, the award was made by Nzuza, who had given Morar a mandate to investigate the RMS debacle and several other contracts entered into by the city. Morar then brought in a legal firm, Hlongwa Attorneys, to assist with the investigation, a report from which was eventually handed to the city manager’s office, at an eventual cost of R90-million to R100-million.

The report, according to council sources, recommended charges against a number of city officials and members of the city’s bid adjudication committees.

The award of the contract to Morar was, however, questioned by councillors, who felt the costs were not reasonable and questioned the process of appointing him.

An initial internal investigation found that Nzuza had acted wrongfully by appointing Morar without a mandate from the executive committee, according to a senior council official who asked not to be named.

The matter was referred to the provincial treasury for investigation and Nzuza placed on special leave, which was extended by three months before his return to work last week.

Nzuza is out on R50 000 bail after being arrested in connection with the R430-million waste removal contract over which former mayor Zandile Gumede and a group of councillors, officials and contractors are facing corruption and fraud charges.

Council spokesperson Mluleki Mntungwa said Nzuza had been suspended for three months to allow for an independent investigation by the KwaZulu-Natal provincial treasury on a matter where there were allegations of violating supply chain processes.

Mntungwa said there had been delays in finalising the investigation partially because of the Covid-19 lockdown and the “unavailability of some of the material documents.”

Mntungwa did not disclose the name of the companies involved or the quantum of the alleged supply chain management violations.

“I cannot provide details on the matter as investigations have not been concluded,”’ Mntungwa said.

In the PPE matter, Morar’s other company, Amakhono Capital, was awarded a R2.07-million PPE tender by the province as part of its Covid-19 spend, made public by premier Sihle Zikalala last month.

According to company records Morar is the sole director of Amakhono, a financial services and property company, which was formed in 2004. Other former directors include high flyers such as Naledi Moyo-Ndwandwe, former chief executive of Trade and Investment KwaZulu-Natal and Bheki Zulu, the chief executive of the Council for the Built Environment.

Amakhono, which is based in Pietermaritzburg, was described by Morar at the time as a transformation vehicle specialising in advisory services for black business involved in deals of R25-million upwards in property, financial services and other sectors. No mention was made of protective equipment or the medical sector. 

Kwazi Mthethwa, spokesperson for the KwaZulu-Natal department of education, said he would respond to questions about the expenditure but had not done so at the time of writing.

Lennox Mabaso, spokesperson for Zikalala, said the report on Covid‑19 spending had been issued in the interest of transparency“The report is neither an analysis or an audit and has no conclusive finding. It is simply an accountability report as to what each department and entity spent. Individual departments would have to account to the auditor general for their spending,” he said.

Mabaso added that any financial misconduct would be dealt with through due process and dealt with by the appropriate agencies.

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Paddy Harper
Paddy Harper

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