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Roshan Morar’s fingers in every pie, including KZN education and SAA

Startling claims have emerged that Roshan Morar has effectively captured the KwaZulu-Natal education department’s finance office for more than 15 years.

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Morar, a highly influential auditor, is also board chairperson of the Ithala Development Finance Corporation and a highly controversial former board member of the Public Investment Corporation (PIC).

Morar is a director of Harith General Partners, an entity created using PIC funds and which was subjected to intense scrutiny at the Mpati Commission of Inquiry into the PIC. Along with Global Aviation, it makes up the Takatso consortium. 

One of Morar’s network of companies, Amakhono Capital, of which Morar is sole director, has also recently been sanctioned by the Special Investigating Unit (SIU) for personal protective equipment (PPE) fraud at the KwaZulu-Natal education department.

Recent disclosures by a whistleblower within the department reveal that staff from Morar’s auditing firm, then known as Roshan Morar & Associates, have been running the office of the department’s chief financial officer (CFO) since 2005.

Internal memorandums provided to the Mail & Guardian by a whistleblower in the department show that six staff members were first seconded to the CFO’s office from Morar & Associates in 2004.

The staff members were appointed on the instruction of the then-superintendent general of education in KwaZulu-Natal, Dr Cassius Lubisi, to provide “essential services” that the department had not been able to procure through recruiting staff.

The six-month appointments were extended several times over the intervening years, with the staff members, who included the manager in the CFO’s office, being made permanent between 2012 and 2014.

They included the deputy manager of the CFO’s office, accounts manager, supply chain staff and financial services staff.

Their names are all known to the M&G.

Lubisi went on to become the director general in the presidency under Jacob Zuma, but he was appointed as chairperson of Morar Incorporated, as Morar’s company is known today, in April this year.

Lubisi still occupies the post.

In a memorandum on 26 March 2007, Lubisi said that the services provided by the six staff seconded from Morar had been “exceptional” and that it was envisaged they would be “retained” on an individual basis.

It was “critical” that their services be retained, while the posts were advertised, Lubisi said.

However, the posts were eventually filled by the six Morar staff members.

The whistleblower told the M&G this week that Morar had effectively “captured” the CFO’s office in the education department since 2007 which had ensured that his companies, including Morar Incorporated, continued to rake in millions of rand from key contracts with education.

These included the 2017 award of a multimillion-rand contract to Morar Incorporated in 2017 to audit the department’s procurement and supply chain expenditure for the 2015-16 financial year.

While serving on the PIC board’s investment committee, Morar signed off on the disastrous loan of R11.6-billion to the Lancaster Group, while serving on the board of L101, a Lancaster subsidiary. The transaction saw the PIC buy Steinhoff shares via Lancaster when it did not need to do so and was, according to the Mpati commission, a conflict of interest on the part of Morar.

Morar Incorporated was also appointed last year to investigate the disappearance of personal protective equipment, despite the fact that another of Morar’s companies, Amakhono Capital, was a PPE provider.

According to another internal memorandum, which M&G has seen, from the legal services director Ntokozo Maphumulo, the 2017 contract was awarded without going out to tender at the request of the current director general of the education department, Enoch Nzama.

While regulations stipulated that three quotes should be procured, this could not be done as the review “needs to be conducted urgently”.

“Morar Incorporated had previously done work for the department, hence are familiar with the procedures and applicable legislation,” the memorandum states. It then goes on to recommend that Nzama sign off on the appointment.

No time frame for the investigation — or amount to be paid to Morar Incorporated — is mentioned in the memorandum.

“In both cases, the head of department has cherry-picked service providers to do work for the department and authorised the bypassing of normal tender procedures. The secondment of staff from Morar’s company to the CFO’s office was highly irregular, as was the 2017 appointment,” the whistleblower said.

“There were no red flags raised over either decision, despite the fact that if a head of department deviates from procurement processes, or wishes to deviate, they are required to secure concurrence from the provincial treasury. This is another indication of the level of capture that [Morar] has achieved,” the whistleblower said.

The whistleblower said Morar appeared to have a “blanket of protection” at various levels of government, which meant that he continued to be appointed to key roles at parastatals despite the series of controversies in which he has been involved.

”He is very clearly being protected. The 2017 review he was appointed to do came with no terms of reference whatsoever. It was just another blank cheque to say come in and do whatever you want,” the whistleblower said.

The KwaZulu-Natal provincial treasury is currently investigating a R30-million contract awarded to Morar by the eThekwini municipality to review its revenue management system. The contract ballooned to around R93-million and resulted in the suspension of city manager Sipho Nzuza last year.

Earlier this year Morar agreed to pay back the education department the profit his company, Amakhono Capital, had made on an unlawful R4-million PPE tender it was awarded.

The SIU probed the award of the tender — which was exposed by M&G — and found that it had been unlawfully awarded as Amakhono had submitted critical documents several days after the tender closed.

However, the SIU found Morar had not committed any criminal offence and accepted his offer to pay back the profit he made on the deal to avoid a lengthy legal battle over the unlawful contract.

SIU spokesperson Kaizer Kganyago said this week it had identified supply chain management breaches in the Amakhono award.

Kganyago said he could neither confirm or deny whether any of the staff who handled the Amakhono PPE contract were among those seconded from Roshan Morar & Associates to the department.

Education department spokesperson Kwazi Mthethwa said “secondment cannot happen between a private institution and a government institution.”

He said the SIU had “cleared the department of any wrongdoing with regard to PPEs”.

Mthethwa undertook to respond to detailed questions from M&G but had failed to do so by the time of writing.

Adrian Lackay, spokesperson for Public Enterprises Minister Pravin Gordhan, referred the M&G to departmental spokesperson Richard Mantu for comment. 

Mantu referred M&G to Harith spokesperson Khaya Buthelezi.

Buthelezi said that Morar was appointed to the Harith board in 2015 but was not a shareholder in either Harith or the Takatso Consortium.

“Mr Roshan Morar is a PIC appointed non-executive director on the Harith board. As you know, PIC holds 30 % of Harith General Partners,” Buthelezi said.

In a statement, the PIC said it had “noted” reports that its funds would be used by the Takatso consortium to fund the acquisition of a 51% stake in SAA and denied this, saying that while the PIC had shares in Harith, it was not a member of Takatso.

It confirmed that the PIC did own 30% of Harith General Partners and that “some of the individuals” involved in Takatso “may have previously been associated with the PIC”.

“Nonetheless, Harith General Partners and the Takatso consortium did not involve the PIC in any way in this acquisition,” the PIC said.

Morar confirmed the appointments, but denied any wrongdoing, or knowledge of the appointment process.

“We are not aware of the said memorandum or the internal processes, discussion, motivations, recommendations or approvals that preceded our appointment,” Morar said. “The department is better placed to provide an accurate account in this regard.”

Morar said his company was “no longer in possession of any documents relating to our appointment,” because of  “the extreme time lapse since the appointment (more than 14 years)” and requested copies of the documents leaked to M&G by the whistleblower.

Morar said claims that he had captured the department’s CFO office were ‘’false”.

“Dr Lubisi’s appointment as the chairperson of Morar Incorporated occurred more than 16 years after the secondment of staff,” Morar said.

“Dr Lubisi was appointed as the superintendent-general of the department in June 2005.

The original secondment of staff from Morar Incorporated took place prior to his appointment. Dr Lubisi was not the chairperson of Morar Incorporated in 2005 or 2007 nor was he associated with the company in any way,”’ he said,

Morar refused to disclose how many tenders his companies held with the education department and declined to comment on the 2017 contract signed off on by Nzama.

“We are not aware of the internal processes, discussions, motivations, recommendations or approvals that preceded our appointment. The department is better placed to provide an accurate account in this regard.””

Lubisi — who retired from the presidency last September, and was appointed as chairperson of Morar Incorporated in April this year — has not  responded to questions from the M&G.

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Paddy Harper
Paddy Harper
Storyteller.

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