Stop the rot: The SIU’s report recommends that Justice Minister Ronald Lamola (centre) tightens up practices at the master’s offices and that officials are referred to courts for criminal prosecution. (Madelene Cronje)
Up to 15 officials in the master of the high court could face internal and criminal investigations concerning malfeasance in the section. A high-level probe by the Special Investigating Unit (SIU) into numerous allegations of fraud, corruption, and misconduct against officials in the master of the high court offices nationally has recommended that the officials, including senior managers, be referred for possible criminal prosecution.
The Mail & Guardian has seen extracts of the SIU’s progress report sent to Justice Minister Ronald Lamola, making a raft of recommendations, including amendments to internal policy, to tighten the master’s office.
Years of complaints
The justice department has, for years, received complaints about the master of the high court, which deals with deceased estates, insolvencies, registration of trusts and curators. The situation has become so bad, the report said, that some of the 15 referred for possible criminal and disciplinary action were senior in the section.
“The SIU has received up to 150 allegations from members of the public against officials of the master’s offices, and the profiling of persons of interest is ongoing,” reads the report.
Because of the complex nature of matters involving insolvent estates and liquidations, the SIU has sourced the services of an expert in the field from the Office of the State Attorney to assist the team.
The report states that the investigation has found that:
- Most complaints relate to deceased estates;
- The second-most complaints relate to the appointment of liquidators. The allegations are centred on the appointment process and the alleged interference of officials from the master’s office in favouring particular liquidators;
- There seems to be mistrust between some employees at the master’s offices and, as a result, they are lodging complaints against each other; and
- Largely manual and non-automation of some of the processes at the master’s office allows for interference and manipulation.
In February last year, President Cyril Ramaphosa signed a proclamation for the SIU to investigate the master of the high court.
In the same month, Lamola authorised the temporary closure of all master of the high court offices to allow SIU investigators to collect information, including copying hard drives.
According to the report, 181 matters are under investigation. Most cases stem from the Pretoria and Johannesburg master’s offices, and 158 matters were received from whistleblowers and members of the public after the publication of the proclamation.
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Spokesperson Stephan Mahlangu, said the department was unaware of any preliminary report into the SIU investigation and cannot comment.
“The department anticipates that, upon conclusion of investigations by the SIU, a final report on the work of SIU will be sent to the presidency, and a copy will be sent to the minister of justice and correctional services,” he said.
How the allegations built up
Two weeks ago, the M&G reported that former acting chief master Theresia Bezuidenhout was accused of interfering in disciplinary action against officials implicated in maladministration and corruption in the administration of deceased estates.
She has denied all allegations, saying they were part of a campaign to target her and tarnish her reputation.
The M&G is also aware of affidavits that have been handed to the SIU, which delve into the nefarious activities in the liquidation industry, which is worth more than R4-billion. The affidavits deposed by a former senior master of the high court and a whistleblower from a prominent liquidation firm uncover a trail of abuse of power, conflict of interest and corruption involving several senior officials in the master’s office and prominent liquidators.
The affidavits form part of a criminal investigation by the police’s organised crime unit, which dates back to 2015. This investigation has now been folded into the SIU investigation.
The SIU had not responded to a request for comment by the time of publishing.
An informant ‘found dead’
A source with knowledge of the cases said collection, analysis and assessment of documentation and information relevant to the investigation is ongoing.
But the affidavits before the SIU already paint a dire picture of the master’s offices. A former senior official in the Pretoria office — whose name is known to the M&G but is being withheld because it is not mentioned in the progress report — said information from two liquidators going back to 2013 points to collusion and corruption involving prominent liquidators and senior officials in the master of the high court offices in Pretoria.
The whistleblower, the former senior official who wrote one of the affidavits, further said it is believed that the senior officials, whose names are known by the M&G, conspired with the liquidator to make sure that his company got lucrative insolvency appointments and protected him when he was found to have been previously sequestrated, rendering him unable to even act as a liquidator.
The whistleblower also said that one of the informants, who was also a liquidator, was “found dead” on 15 July 2013, just four days after he cancelled a follow-up meeting with him. The informer had said in the letter to the whistleblower that he had received death threats and was scared.
“The manner in which these persons protected each other and worked together to achieve a common goal, namely to obtain undeserved advantages and benefits and to make large sums of undeserved money from the insolvency industry, can best be described as syndication or racketeering as contemplated in the Prevention of Organised Crime Act,” reads the affidavit.
“I believe that by their collusion, or alternatively their failure to act, having the effect to prevent [name withheld] exposure and removal from the master’s panel, the [seven names, which has been withheld] have committed a number of crimes.”
The SIU’s report recommends that officials at the master’s offices are referred to the courts for criminal prosecution.
Backup blackmail plan
The other deponent, who used to work for a prominent firm, detailed in his affidavit regular visits by one senior official to the firm’s offices.
“[Name withheld] instructed all [company] staff not to mention this to anyone. He threatened that should any of us tell someone about this, we will be fired,” said the deponent.
The deponent also alleged that a master’s official was romantically linked to the head of the liquidation firm. They had several social occasions where alcohol was consumed. “[Name withheld] does not only visit [name withheld] for so-called meetings, but they socialise as well. She used to have drinks with him and sometimes got very drunk.
“He [the head of the liquidation firm] also mentioned to me on numerous occasions that he keeps all these photos and messages from [name withheld] on his phone to blackmail her whenever she decides to ‘screw him over’ for some or other reason.”
Peter Masango, a provincial coordinator in the department for the National Education Health Allied Workers Union, said all officials mentioned in the report should be “charged, both internally, criminally and suspended.”
“The liquidators implicated should also be removed from the master’s panel of liquidators and criminally charged. We will no longer tolerate abuse of power, corruption, malfeasance, and racism in the department.”
Recommendations
Other than the possible criminal referrals, the progress report recommends that Lamola prioritise developing regulations, in terms of section 103 of the Administration of Estates Act, regarding the appointment of executors in deceased estates.
The recommendation states that the frequency of accounting by curators bonis (officials appointed to seize and administrate the assets until the matter is finalised) be increased from the current annual accounting.
It also recommends that master’s officials be rotated regularly to different sections, that prolonged acting positions in the master’s offices be urgently attended to, and that a time frame is introduced for all acting positions.
The report further suggests that the justice minister re-examine the discretionary power of the master of the high court to appoint previously disadvantaged liquidators because it is open to abuse.
Finally, the whistleblowers’ hotline in the justice department must be regularly monitored.
This investigation was made possible by the Henry Nxumalo Grant.