ETHICS COMMITTEE FINDS HON SHIVAMBU BREACHED CODE OF CONDUCT ON VBS COMPLAINT

Parliament, Monday, 2 October 2023 – The Joint Committee on Ethics and Members’ Interests has found that Hon Floyd Shivambu MP has breached item 10.1.1.1 of the Code of Ethical Conduct and Disclosure of Members’ Interests for National Assembly and Permanent National Council of Provinces Members for failing to comply with the requirements of the provisions for disclosing financial interest in respect of the R180 000 that was paid to him in 2017 by Sgameka Pty Ltd.

The first complaint was referred to the committee on 16 October 2018 by Mrs Karlsen, a then Member of Parliament. The committee that was constituted under the 6^th Parliament resolved during November 2019 to continue with the complaint. On 18 October 2019, Hon John Steenhuisen MP also referred a complaint to the committee. Because the complaint focused on the same issue, the committee processed the two complaints together.

IThe complaint was based on media reports in the Daily Maverick and alleged that:

1. The Member received about R10 million through his younger brother Brian Shivambu and that the EFF allegedly received R1.3 million through VBS Bank.
2. Money was funnelled through a company called Sgameka Projects (legally owned by Mr Shivambu’s brother Brian Shivambu) into the Member’s bank account.
3. Lawrence Mulaudzi made payments into the account of a company called Grand Azania (Pty) Ltd (legally owned by Mr Shivambu’s brother Brian Shivambu) (“Grand Azania”). These funds were then used to pay expenses related to the Member’s wedding.
4. the Member benefitted from payments made by the company Sgamaka Projects into Grand Azania’s bank account.
5. the Member failed to disclose Sgameka, Grand Azania, Brian Shivambu or Lawrence Mulaudzi in his 2017 and 2018 disclosure of member’s interests.
6. the Member used the savings of vulnerable VBS depositors and municipalities funnelled through Sgameka Projects and Grand Azania to fund his extravagant lifestyle and political aspirations.

The committee resolved to summon the liquidator in the VBS matter. The liquidator provided an affidavit in the form of a report to the committee. The report highlighted that the following money was transferred from Sgameka Projects (a company owned by Mr Brian Shivambu, the Member’s brother) to the Member as follows:

1 18 August 2017: R100 000
2 24 August 2017: R 30 000
3 26 August 2017: R 50 000
The committee will recommend to the House to impose a penalty of a reduction of nine days salary against the Member for breach of breaches item 10.1.1.1 of the code.

Furthermore, the liquidator identified that money was moved from Sgameka Projects to other bank accounts held at other retail banks. But the liquidator did not have jurisdiction to obtain information in respect of bank accounts that were not held with the VBS and therefore could not furnish the committee with additional information.

The committee resolved to summon the Financial Intelligence Centre (FIC) to obtain information relating to the transfer of money from Sgameka Projects to bank accounts not held at VBS for it to obtain intelligence on the movement of money. The FIC held the view that in terms of section 40 the Financial Intelligence Centre Act, No. 38 of 2001 it would be unlawful for it to provide the committee with financial intelligence. The committee was in the process of invoking section 14 of the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act, 4 of 2004 against the FIC, but after receiving legal advice, did not proceed with the issuing of the summons. 

All other investigative avenues used by the committee to try and trace whether more money was paid to the Member via bank accounts to which the liquidator did not have access were unsuccessful. This part of the investigation is therefore inconclusive. The committee decided to finalise the complaint on the evidence that it had before it.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CO-CHAIRPERSONS OF THE JOINT COMMITTEE ON ETHICS AND MEMBERS’ INTERESTS, MR BEKIZWE NKOSI AND MS LYDIA MOSHODI.

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ETHICS COMMITTEE UNABLE TO MAKE FINDING ON ALLEGATIONS OF BREACH OF CODE AGAINST HON MALEMA MP

Parliament, Monday, 2 October 2023 – The Joint Committee on Ethics and Members’ Interests has resolved that it is unable to make a finding regarding a possible breach of the Code of Ethical Conduct and Disclosure of Members’ Interests for National Assembly and Permanent National Council of Provinces Members against Hon Julius Malema MP.

The complaint was referred to the committee on 18 October 2019 by Hon John Steenhuisen MP alleging that Hon Malema breached the Code as it relates to the Venda Mutual Bank scandal. The complaint was based on a media report in the Daily Maverick dated 8 September 2019 and alleged that the Member:

1. benefited from VBS funds through Mahuna Investments.
2. did not disclose the benefit in his 2017 and 2018 declaration of interests.
3. used the life savings of vulnerable VBS depositors and municipalities to fund his extravagant lifestyle, business interests and political aspirations.
4. used about R4.13m, which was paid to the EFF from an illegal sum of R16.1m that was part of the illegitimate Sgameka Projects Company.
5. participated in a scheme to mask the origin and ultimate beneficiaries of these funds.
6. failed to disclose these alleged connections with Mahuna Investments and subsequently misled Parliament to believe that he was not connected to Mahuna Investments.

In considering the matter, the committee resolved to summon the liquidator in the VBS matter to furnish it with a report on the movement of money in the VBS scandal. The report was presented to the committee on 23 August 2021. In terms of the report, Sgameka Projects paid R4 803 180 into an ABSA bank account belonging to Mahuna Investments. 

The Sgameka account was identified by the liquidator as the account into which money from the VBS was paid and then transferred out into other bank accounts held by both natural and juristic persons. In terms of the report, the Member did not hold a bank account with the VBS. The report also indicates that no money was transferred from the Sgameka bank account to the Member. There is no reference in the report to any account held by the Member that may implicate him in the VBS scandal.

The committee resolved to summon the Financial Intelligence Centre (FIC) to obtain financial intelligence on whether the Member received money through Mahuna’s ABSA bank account. The FIC held the view that in terms of section 40 the Financial Intelligence Centre Act, No 38 of 2001, it would be unlawful for it to provide the committee with financial intelligence. The committee was in the process of invoking section 14 of the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act, 4 of 2004 against the FIC, but after receiving legal advice, did not proceed with issuing the summons. 

The committee noted that section 40 of the Financial Intelligence Centre Act prevented the committee from pursuing the allegations further. To this end, the committee’s investigation is inconclusive as the committee was not in possession of sufficient information to make a finding. The committee decided to close the file in the matter.

ISSUED BY THE PARLIAMENTARY COMMUNICATION SERVICES ON BEHALF OF THE CO-CHAIRPERSONS OF THE JOINT COMMITTEE ON ETHICS AND MEMBERS’ INTERESTS, MR BEKIZWE NKOSI AND MS LYDIA MOSHODI.

Issued by Parliament, 2 October 2023