Deputy finance minister linked to PRASA malfeasance
31 March 2017
Johannesburg - New deputy finance minister Sfiso Buthelezi was linked to possible financial irregularities in former Public Protector Thuli Madonsela’s 2015 report on the Passenger Rail Agency of South Africa (PRASA).
Buthelezi previously held the position of PRASA chairperson until he was replaced by Popo Molefe in 2014.
Derailed , Madonsela’s damning report on the troubled state-owned rail transport entity, contains allegations that a company of which Buthelezi was a shareholder and a director clinched an advisory services contract from PRASA while Buthelezi led PRASA’s board.
According to the report, however, Madonsela could not make any conclusive findings on the allegations because former PRASA CEO Lucky Montana failed to provide her with key documents related to the allegations.
Buthelezi held shares in Cadiz Holdings and Makana Investment Corporation, according to an “undated” declaration of interests form included in the Derailed report. Buthelezi was also a director of the latter company. Makana is a subsidiary of Cadiz.
Contract
According to information provided to Madonsela, Cadiz Holdings secured a contract to provide advisory services to PRASA on the state-owned company’s huge tender for new passenger carriages worth R51 billion.
Madonsela set out to determine whether Buthelezi “improperly fail[ed] to disclose and manage a conflict of interest arising from his interest in Makana, a subsidiary of Cadiz, a company allegedly providing advisory services to PRASA on the Rolling Stock Programme”.
However, she did not receive the documents she needed to probe the claims.
“The documents have not been provided by PRASA, whose GCEO (Montana) only offered an explanation disputing the allegation and providing names of companies involved in the said advisory services. Accordingly, I have deferred my findings on this allegation and [it] will be dealt with in the second report,” she wrote.
Madonsela’s much-anticipated second report on PRASA’s disastrous financial affairs under Montana’s leadership could not be completed before she made way for Public Protector Busisiwe Mkhebane in October 2016.
Letter
According to the report, Montana at the time wrote a letter in which he denied that PRASA had awarded an advisory contract to Cadiz.
“PRASA argued that the allegation that Cadiz is providing advice on the new Rolling Stock Project is not only false but also dangerous as it jeopardises an important process in the upgrading of passenger rail services and the creation of job opportunities within South Africa,” reads Madonsela’s report.
According to CIPC records, Buthelezi resigned as a director of Cadiz Holdings in November 2010. He only resigned as a director of Makana Investment Corporation in August 2016.
The report states that Buthelezi was a “senior executive at Makana Investment Corporation, which is owned by the Makana Trust, which belongs to former political prisoners in South Africa”.
