Catch up here: Johannesburg’s corrupt mayor, dirty deals at Denel, EOH clean-up – #StateCaptureinquiry

BizNews journalist Bernice Maune spoke to editor Jackie Cameron about the big stories from the Zondo Commission’s state capture inquiry this week. Listen below to hear how Joburg mayor Geoff Makhubo was at the epicentre of  corrupt dealings with EOH. Former Denel boss Stephan Burger cracked under pressure, admitting to giving a contract to VR Laser – a company owned by known Gupta associate Salim Essa and Duduzane Zuma. This, as Bernice explains, violated tender procurement policy. But with the bad comes the good. Listen in on how EOH CEO Stephen Van Coller got a group of forensic investigators to expose corruption in his company, and how he vows to pay back mismanaged money that was swindled from the state by the corrupt. – Jarryd Neves

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On Stephen Van Coller, the CEO of EOH:

It really has been quite a fascinating week, to say the least. We started off on Monday and we saw that Stephen Van Coller was quite passionate. You could just feel the emotion coming out from his testimony. He has been appointed the group CEO of that company in 2018. He was just a couple of months into his role, when he found out that there had been wide scale corruption and collusion happening within EOH. He found out through a journalist who called him, wanting his comment.

The forensic company’s name is ENSafrica. That company came in and as they were starting to do their investigations – they were looking at emails, they were looking at bank statements, they were looking at records all from five years back up until 2018. They found that executives within the EOH finance division had been colluding with government officials from the departments of water, national defence, the National Prosecuting Authority and from the City of Johannesburg, to have multi-million rand tenders awarded to them, in exchange for bribes, gifts, donations. Sometimes there would be invoices paid out to a shell company. Sometimes these monies would be paid for nothing essentially.

On Van Coller approaching the authorities:

When Stephen found this out through ENSafrica, instead of just cleaning this up within the company and not saying anything, he thought to himself the best thing to do would be to approach the Hawks, the police and work with them to find out if they could have cases opened. So that’s exactly what happened. Those two crime enforcement agencies came on board, and together with ENSafrica, they were then able to open fraud cases. They were then able to open criminal cases against the people that were involved. Heads rolled, people got fired from EOH.

The best part of his testimony was just hearing how committed he was to paying back the money. For him it wasn’t just a matter of ensuring EOH has a good standing within its industry, but it was also important to ensure that all the millions that had been sourced to the company – which is taxpayer money – would then be returned to the state. That’s what happened on Monday.

On former Denel boss Stephan Burger:

It’s been a bit of a back and forth with Denel, because you have Stephan Burger – who was the CEO of Denel Land Systems – and then you also have Riaz Saloojee, who was the group CEO of Denel as a whole. Between the two of them, they have both been denying who was responsible for awarding that contract to VR Laser. But before they came to testify, we had Cecelia Malahlela, who was the group’s supply chain executive of Denel Land Systems.

She was also able to provide evidence – not just oral evidence but emails as well – to show how Stephan Burger was pressurising her, to ensure that VR Laser got that contract. From Cecilia’s testimony, we were able to get some truth out of that to see how this actually happened. So when we heard Mr Burger’s testimony, in the beginning he wanted to sort of shift blame – blame his superior at the time – but at the end, he sort of had to accept that the buck ended with him. He’s the one who ensured that the committee approved the contract. He had the power to overturn the contract and give it to LMT Systems, which was a subsidiary of Denel at the time. They were even quoting R100-million less, which is very bizarre. Why not give it to a company that has a credible reputation?

On VR Laser:

75% of the company is owned by Salim Essa, who –  as we all know – is a Gupta lieutenant. Then Duduzane Zuma owns 25% of that company. All the monies that were routed to VR Laser, he would get  the 25% share cut or whichever cut they had agreed upon at the time. But he is one of the main shareholders, yes.

On Stephan Burger’s fate:

I think the one thing that the Zondo commission has been very good at, is being able to thoroughly investigate and then connect the dots. So, with Cecilia Malahlela’s testimony – which was very powerful and very strong – because it was backed up by physical evidence. Also, with us being able to hear from Stephan himself and him admitting that he did give them that contract willingly. I think it is possible that we could see arrests happening. If it will happen this year? I think that’s still a bit early because they’re still busy with Denel. I think once they have all that testimony in, then they will be able to make findings that would ensure that.

He should account for those decisions that he made, because they were corrupt decisions. To willingly violate a tender procurement policy, which goes against Treasury and the Finance Ministry’s financial act – that is actually a criminal charge on its own.

On Johannesburg mayor Geoff Makhubo:

Geoff has been the chairperson of the greater ANC Joburg branch and he has also been their treasurer for a few years, before becoming the mayor of Johannesburg – which happened last year, in September. He has a consulting company that he owns with his wife, Florence. This consulting company is called Molelwane Consulting. While he was on the committee for finance, on the City of Joburg’s mayoral committee, he received deals worth R30 million. So, the ANC knowingly put his name forward last year to take up the position of mayor, knowing this. That’s also quite disappointing in itself. But his way to protect himself there was that he resigned, prior to taking up the mayorship.

What then happened is that, EOH has a public sector division. This is headed up by a very interesting figure. This person’s name is Jehan Mackay. Jehan has a company called TSS, which was acquired by EOH in 2011. He was tasked with ensuring they got government contracts. That’s exactly what he did. He went out, he networked, he used the resources that were available to him – and connections clearly – and he got massive amounts of government contracts. Geoff and Jehan had a relationship as well. He also had a relationship with a man by the name of Patrick Makhubedu.

Mr Makhubedu was the financial executive at EOH. So, between the three of them, there was a kickback system in place, where Geoff would ask for donations for the ANC – and some of these donations were to host conferences, some of the donations went to celebrations that the ANC was having. The largest one was, I think, for about three to four months. Geoff was asking if they could bankroll their expenses for the entire four months. I think it was October, that they were asking for R6 million. If you tally all that up, it’s insane amounts of money.

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