Paul O’Sullivan: Once respected CEO Mike Lomas back in SA to ’fess up on R1.4bn Eskom fraud

Ace forensic investigator Paul O'Sullivan has landed another big fish in a six year investigation into a R1.4bn Eskom fraud. One of the key facilitators of the heist, former Group Five CEO Mike Lomas, today landed at OR Tambo after losing his case against extradition from the UK. Lomas's return to SA will accelerate the State's criminal trial against massive Eskom tender winner Tony Trindade of Tubular Construction and his internal accomplice, Kusile contract manager Frans Hlakudi. O'Sullivan spoke to BizNews editor Alec Hogg..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here..Watch here.Listen here.Highlights from the interview.Mike Lomas is a former executive involved in a high-profile corruption case in South Africa. He has been accused of playing a central role in a multi-billion-rand corruption scheme related to Eskom, South Africa's national power utility. The charges against him are linked to his involvement in facilitating and overseeing corrupt contracts during his time in the energy sector, which resulted in significant financial losses for the state-owned enterprise..Lomas, who fled to the United Kingdom to avoid prosecution, was a key target in ongoing investigations led by forensic investigator Paul O'Sullivan. O'Sullivan, through his organization Forensics for Justice, played a crucial role in bringing Lomas to face justice. After significant efforts, Lomas was arrested in London in 2021 and later extradited to South Africa to stand trial..While awaiting trial, Lomas has been placed in a witness protection program due to the sensitive nature of the case and his potential cooperation with authorities. It is speculated that he may testify against other involved parties in exchange for a reduced sentence under South Africa's plea bargaining system..His case is part of broader efforts to combat widespread corruption in South Africa, particularly within its energy sector..Download PDFThe-state-v-Antonio-Trindade-others-2019-06-27Download.Edited transcript of the interview.00:00:10:01 – 00:00:39:11.Alec Hogg:Paul O' Sullivan, on a very big day. You've been investigating something for the last six years. The scoundrel, or one of the scoundrels, in the middle of all of this had to be extradited from the UK, brought back to South Africa. What makes this story fascinating is that this man was the chief executive of one of the biggest construction companies listed on the Johannesburg Stock Exchange, a position he held from 2001 to 2007..00:00:39:13 – 00:01:06:02.Alec Hogg:His name is Michael Lomas, and Paul O' Sullivan, you have brought this man to justice, or so it would appear. But perhaps let's go back. Mike Lomas was the chief executive of Group Five. He left in 2007. Group Five had a good time after he left. We had the 2010 building boom. Then the collusion allegations came in 2013, and in fact, the company went bust in 2019..00:01:06:07 – 00:01:14:11.Alec Hogg:How did he get involved with this company that was stealing so blatantly from Eskom?.00:01:14:13 – 00:01:37:17.Paul O' Sullivan:Okay, so when he was at Group Five, he had to fall in line with the compulsory retirement policy. He had to retire, I think, at the age of 64 or something like that..00:01:37:17 – 00:02:18:18.Paul O' Sullivan:65. So, he had to go on pension. And here he was, remember, he's British. He's from the UK. I think he was born and grew up in Manchester, somewhere in the north of England, and he went to university in Manchester and studied engineering. A very competent person, by the way. So, what happened was after he went on pension, he was still living in South Africa, himself and his wife, and I guess he felt he had more work left in him and he wanted to contribute more to the economy..00:02:18:20 – 00:02:52:23.Paul O' Sullivan:And he had a reputation because everybody knew him. So, he ended up being invited as a consultant to assist Trindade's group of companies, which was in a bit of a mess. The group of companies was in a mess because they hadn't really implemented any good corporate governance, and they were making money so fast through their corrupt practices that they were disorganized..00:02:53:00 – 00:03:14:12.Paul O' Sullivan:They didn't even have an asset register. They had nothing. So, if there was a proper audit of the company – in fact, I've got some of the audit reports – the auditors were screaming at them because they were auditing large sums, and they needed to have clean audits because they were working for public companies like Eskom..00:03:14:12 – 00:03:34:14.Paul O' Sullivan:So, they had to have clean audits. The auditors were screaming at them because they were failing to properly manage their affairs. So, they brought Mike Lomas in to help clean up their company, which I guess for the first two or three years, he probably did quite a good job. But then, one day….00:03:36:07 – 00:03:59:06.Paul O' Sullivan:He met with this fellow, Hlakudi, and he told him he needed money. So, Lomas went back to Trindade and told him, "Okay, you pay him from your account, and I'll sort you out later." That's how it began. He made these payments, and I think we added up about 4 or 5 million rand over a few months..00:03:59:06 – 00:04:18:14.Paul O' Sullivan:But every time he made a payment – because we got Lomas's bank statements as well – when I met with him, he gave me all of his bank statements. In fact, the statements that were missing, he gave me a special power of attorney, and we applied that to the bank, and we got those missing bank statements..00:04:18:16 – 00:04:48:18.Paul O' Sullivan:So, we were able to fill in all the gaps. And every time he made a payment to Hlakudi, there was a corresponding payment from Trindade, his company, Tubular Steel, or whatever they were called, into his own bank account. So, what that did for us was prove that it wasn't Mike Lomas, although he was actually the frontman, if you like..00:04:48:20 – 00:05:11:21.Paul O' Sullivan:But it proved that Mike Lomas's version was correct, which was that he was instructed to pay and then claim the money back like an expense voucher from Trinidad. So, we then had Lomas, Trinidad, Fakude, and a couple of others in the bag, and we just had to literally sit and put it all together, which we did..00:05:11:23 – 00:05:35:07.Paul O' Sullivan:I think I opened the docket. First, as I do in my normal manner, I wrote to Trindade inviting him to pay back the 1.4 billion rand that he had stolen from Eskom. And he hired an attorney, a little fellow by the name of Robert Kanarek, who in turn hired, what's his name, Lawrence Hodes..00:05:35:14 – 00:06:00:06Paul O' Sullivan:Lawrence Hodes tried to attack me quite nicely, in fact, but failed miserably. He brought an urgent application to court to get all the evidence I had, and I told him to get lost. When we went to court, he tried to bully me. I pointed out that the documents he was asking for were part of the docket against his client..00:06:00:07 – 00:06:24:21Paul O' Sullivan:If he wanted those documents, he'd have to wait for his client to be arrested, charged, and then request them from the state. He made a big deal, claiming his client would never be arrested and charged. Six weeks later, his client was arrested and charged. The court agreed with me, so I didn't have to hand over the evidence, which amounted to about 4,000 pages of documents..00:06:24:23 – 00:06:41:15Paul O' Sullivan:The documents were handed over to the state, and certain parts will form the prosecution. The evidence is watertight. I don't see how they can get away with it..00:06:41:19 – 00:07:07:02Alec Hogg:I've read your affidavits, and there's no doubt about Mike Lomas's involvement with Trindade and getting him to do various things. But we won't go into the details. The question is, what happens to Lomas now? He's back in South Africa, extradited from the UK, which surely doesn't make him popular here. Could he become a state witness?.00:07:07:02 – 00:07:10:06Alec Hogg:Is it possible that he could turn state witness?.00:07:10:08 – 00:07:44:09Paul O' Sullivan:I believe he will. He's 78 years old and not in good health. Although he spent around 30 or 40 years in South Africa, he was never a citizen. Some people come to South Africa, become permanent residents, pay their taxes, and live here. Then, when they feel they've had enough, they pack their bags and leave. I've been here over 40 years, and I became a citizen quickly because I believe if a country is good enough to live in, it's good enough to be part of..00:07:44:11 – 00:08:03:10Paul O' Sullivan:But Mike Lomas never became a citizen. As a non-citizen, you're treated slightly differently in terms of the Criminal Procedure Act. I don't think he fought hard enough against his extradition in the UK; he could've tried harder. At one point, we even appointed an attorney in South Africa to negotiate on his behalf to become a Section 204 witness or a 105A witness, meaning he'd plead guilty to some offenses..00:08:03:12 – 00:08:51:05Paul O' Sullivan:He couldn't get full indemnity from prosecution since he committed serious crimes. The plan was for him to plead guilty to corruption, possibly get a suspended sentence, and return as a witness against the rest of the gang. Negotiations started on this basis, but after three months, we suddenly received instructions from him that he no longer wanted us to continue, nor cooperate. He wanted us to send all the documents and evidence to his UK attorney. So, we sent everything, and that was about three years ago..00:08:51:05 – 00:09:21:07Paul O' Sullivan:I think, at first, he thought he could get away with it, but the extradition process started, and he was released on bail—£250,000, I believe. By then, he had spent quite a bit of money here in South Africa. I'm not suggesting it was proceeds of crime, but he had received a salary from Trindade and didn't appear to have benefitted too much. He also received a handsome leaving package from Group Five, so he was quite wealthy..00:10:39:15 – 00:11:12:18Paul O'SullivanHe wasn't a poor man. We couldn't see any evidence of him being in receipt of the proceeds of crime. So, for the money laundering aspects in his account, where he paid money to Hlakudi and was paid that money back, he was acting as a middleman in that respect. I kind of feel we'll know what's going on with him when we find out what happens at his court appearance because he's arrived back today..00:11:12:20 – 00:11:35:02Paul O'SullivanHe'll either appear in court today or on Monday. He has to appear in court within 48 hours of being arrested. Well, this arrest would have taken place when he stepped off the plane. He couldn't be arrested overseas; he was already arrested overseas but not by South Africa. He was arrested by the UK authorities on an Interpol warrant..00:11:35:02 – 00:12:08:16Paul O'SullivanSo, his formal arrest took place when he stepped off the plane, and then he has to appear in court either today or Monday. In my opinion, three things could happen: either he's released on bail, he's detained without bail, or he's released into the witness protection program. Now, if he's released into the witness protection program, then you can be satisfied that he's going to be a state witness against these other individuals..00:12:08:18 – 00:12:33:13Paul O'SullivanIf he's released on bail, I would assume he's going to be a state witness against these other individuals. We already know when they make their next court appearance. They tried very hard to get the case struck off, but they failed. So, I guess now that Mike Lomas is home—if that's the right expression to use….00:12:34:06 – 00:12:55:22Paul O'SullivanAnd we know he's home because I was monitoring his flight. I think I sent you a picture of the flight. He was somewhere over Chad at 4:00 this morning, and his flight landed, I think, at 9:16 this morning. So, he's well and truly on South African soil. I believe his wife is with him..00:12:56:00 – 00:13:07:21Paul O'SullivanAnd I believe there was a medical practitioner on the plane as well because Mike is not a fit and healthy person. He's 78. What happens to him now?.00:13:09:09 – 00:13:25:00Alec HoggWhat happens when you actually arrive? So, you've been arrested by the British police. They've put you onto an airplane. Presumably, you don't fly business class. You come to OR Tambo, you get off the plane, and you get arrested by the South African police?.00:13:25:02 – 00:13:25:23Paul O'SullivanWell, remember….00:13:25:23 – 00:13:27:00Alec HoggDo you get a jet?.00:13:27:00 – 00:13:55:04Paul O'SullivanNo, you're already in the company of the South African police when you get on the plane because you don't travel on the plane on your own. And as you rightly say, you don't travel business class. So, the standard protocol for arrested persons being transported—what they call prisoner transportation—is that they sit with the police officers transporting them at the back of the plane, right at the very back..00:13:55:06 – 00:14:20:01Paul O'SullivanThen what normally happens is the plane will be disembarked, and they remain seated. After the plane has been disembarked, they will then disembark, and someone will be waiting at OR Tambo. The plane that came in was the A380, so it would have parked at a terminal, disembarked, and then they would have left..00:14:20:01 – 00:14:47:00Paul O'SullivanThe investigating officer was either on the plane with him, or there would have been other police officials. Once he stepped off the plane, he was still in international territory until his feet touched South African soil. Once he stepped on South African soil, they would formally arrest him, saying, "I'm arresting you, blah, blah, blah.".00:14:47:00 – 00:15:07:15Paul O'SullivanNow, he's formally under arrest in terms of the South African Criminal Procedures Act. The next step is to process him. They would book him in the SAP 14 register at OR Tambo airport. They have a cell there, and he would be put in the cell while he's booked in..00:15:07:17 – 00:15:32:20Paul O'SullivanThen, they issue a document called a live body receipt, which the police at OR Tambo would issue to the investigating officer or whoever was assigned to escort him. They would then take him away. I guess his next port of call would probably be Pretoria Central, or it could be Johannesburg Central, depending on how the docket is managed..Download PDFTIBERI-AFFIDAVIT-2017-08-19_Redacted-2Download.00:15:32:20 – 00:15:58:20Paul O'SullivanI understand that the case is with the Palm Ridge Magistrate's Court, specifically with the Commercial Crime Court seated there. So, they would probably book him in at Johannesburg Central, and his court appearance would either be today or Monday..00:15:58:20 – 00:16:21:16Paul O'SullivanFrom there, we'll know what's going to happen. He has to appear in court—there's no way around that. If they decide to keep and detain him, it might appear that way in court. If he's going into the witness protection program, that would count as detention as well. There are two types of detention in the witness protection program..00:16:21:18 – 00:16:43:00Paul O' Sullivan:One of those types is you're detained as a prisoner, where you're actually under guard all the time, but you're still in the witness protection program. Now, since his wife is thought to have flown with him, I'm guessing that they probably have a little, what we call, a safe house somewhere for him to stay, which will be secure..00:16:44:03 – 00:17:07:09Paul O' Sullivan:Until he appears in court to give evidence. My imagination would be that, at some point, he will give evidence against these rascals, and then at some point, he would plead guilty and be given a suspended sentence in terms of Section 105. After that, he'll obviously go back to the UK and finish what's left of his life..00:17:07:09 – 00:17:24:03Paul O' Sullivan:But if he's an uncooperative person, which I doubt, because he was extremely cooperative with us, if he's uncooperative, then I guess he's probably going to spend the rest of his life in a South African prison..00:17:24:05 – 00:17:32:17Alec Hogg:What's happened to the rest of the gang, as you call them? Trendy? It's Lucky and the others who were involved in the plundering of it?.00:17:32:18 – 00:17:57:15Paul O' Sullivan:So they're on bail, and their trial is in the process of getting ready to proceed. Now, it may well be that with Lomas being home, the matter will be moved from the Commercial Crime Court to the High Court, because we may start at the Commercial Crime Court. The thing about it is that there's a large sum of money involved..00:17:57:15 – 00:18:29:07Paul O' Sullivan:We're not talking about five grand here. We're talking about hundreds of millions — over a billion rand. My estimate is 1.4 billion rand. Now, if you've got corruption to the tune of 1.4 billion rand, you're looking at somewhere between 20 years and life sentences for those individuals. So I think they're all facing very lengthy sentences, and with or without the evidence of Mike Lomas, it's an open-and-shut case..00:18:29:07 – 00:18:32:06Paul O' Sullivan:The evidence is watertight..00:18:32:06 – 00:18:59:22Alec Hogg:Tony Trindade – I've seen your emails to him, and they're typical Paul O' Sullivan emails. You stir him up a little bit. His reaction to you, if I recall, was to counter everything that you'd said. But you did say in one of your affidavits that he does have a Portuguese passport. Has that been taken from him?.00:18:59:22 – 00:19:01:20Paul O' Sullivan:Yeah, his Portuguese passport has been taken. He's on bail, and there are reporting conditions, so he can't leave the country. He's here now. He's stuck here. He used the proceeds of crime to hire lawyers to have a poke at me. I pointed out to them that they were being paid with the proceeds of crime. It didn't seem to bother them..00:19:01:22 – 00:19:23:02Paul O' Sullivan:But they failed in everything they tried to do, and after their failure, a week or two weeks later, their clients were arrested. So, who's paying them now? I don't know, because Trindade himself has been sequestrated, has had all his companies liquidated. On paper, he's a penniless man. But we all know that over time, he moved millions of rand out of the country..00:19:23:11 – 00:19:50:13Paul O' Sullivan:We know that because we've got evidence, and we gave that evidence to the liquidators. So whether they can get that back, I'm not sure. But I'm pretty sure that Trendy stashed away quite a few million rand — I'm guessing at 100 million or maybe more. How do we know that? Because he was laundering money between his companies and he established overseas companies in places like Angola and Portugal. He bought equipment from those companies and transferred money overseas..00:19:50:15 – 00:20:27:08Paul O' Sullivan:And that equipment was already here. He already owned it. So, he was buying equipment that he already owned, and that was done for the purpose of money laundering. It's amazing how the banks assisted in all this money laundering. It's mind-blowing to think that the banks in South Africa were so readily able to assist in the laundering of money by these criminals..00:20:49:06 – 00:21:18:00Paul O'SullivanAnd it leaves me in no doubt about the conduct of the banks, and the lawyers, by the way—law firms that knowingly get paid with the proceeds of crime but are quite happy to receive that money and perform services for it. Those are the type of people that have brought South Africa to this point. They are also the type of people I would like to see going down with people like Trinidad and company..00:21:18:00 – 00:21:48:09Paul O'SullivanBut, you know, unfortunately, it seems they get away with it. I wonder how many of them are now becoming compliant. We saw a recent report by the FICthat said only 38% to 40% of lawyers and estate agents—the category of people that have to issue compliance reports—only 40% of them have issued those reports. This means 60% of them are non-compliant, which is shocking..00:21:49:07 – 00:21:52:23Paul O'SullivanSo this gray listing will stay with us for a while..00:21:53:01 – 00:22:20:04Alec HoggI hope that this is a reflection, though, that the country of no consequences is finally facing consequences. From your perspective, Paul, has there been any support from the South African police? We are aware that there are all kinds of obstacles that can be thrown in the way of a case like this, through crooked cops. Have you encountered any of that?.00:22:20:06 – 00:22:46:16Paul O'SullivanNo, I have encountered good doses of, well, I can say, backbiting. Some of the cops involved in this process went out of their way to try and say that I hadn't been involved in the investigation, which is rubbish, of course, because I opened the docket back in 2019, and the evidence I provided is overwhelming..00:22:46:18 – 00:23:28:00Paul O'SullivanAnd it's ironic that all the people I named in my docket are the people now on trial. The fact that I flew to London and persuaded Lomas to give a version of events under oath demonstrates that I was heavily involved in the investigation. But we had one of these cops who made the comment to Barry Roux—because we hired Barry Roux to negotiate the early stages of the Section 105 plea bargaining agreement for Mike Lomas. This cop at the meeting made the comment, "Well, just make sure Paul O'Sullivan's name doesn't appear on any of the documentation.".00:23:28:01 – 00:23:51:04Paul O'SullivanSo, needless to say, I made that cop aware that I knew he made that comment and that I had no respect for him whatsoever. But the cops have done a fair job. There's no doubt about it. The fact that they've been arrested—now it's no longer a police job; it's a prosecution job. And I'm satisfied that the NPA is on top of it. The police did their work years ago..00:23:51:04 – 00:24:17:08Paul O'SullivanThe police no longer have any work to do here, apart from bringing people to court. But the work that has to be done now is the NPA's, and this project is in very capable hands. It's Andrea Johnson and the Investigative Directorate. This is one of their big projects, and I am satisfied they've got the right people on the job and that we will see a successful prosecution and these nasty characters going to prison..00:24:17:08 – 00:25:00:08Alec HoggAnd maybe some knock-on effects here. Within the affidavits, similar deals were done on Kalahari Manganese for a new smelter at Coega at Cision SA. The tenders were given to Trinidad's company for concealing wastewater. He seems like a really bad egg. Well done to Paul O'Sullivan for exposing all of this..00:25:00:10 – 00:25:04:22Alec HoggHe is with Forensics for Justice. Alec Hogg from BizNews.com..Download PDFTIBERI-AFFIDAVIT-2017-02-16_RedactedDownload.Read also:.TRIBE VIBE: Ian Cameron goes after "porn" General Patrick MbothoIan Cameron goes after "porn" GeneralBizNews Briefing – Rate cut joy; immature politicians; Remgro v Discovery; Exploding pagers

Paul O’Sullivan: Once respected CEO Mike Lomas back in SA to ’fess up on R1.4bn Eskom fraud

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