DA REFERS HLONGWA ALLEGATIONS TO INTEGRITY COMMISSIONER
I have today referred to Dr Ralph Mgijima, the Gauteng Legislature's Integrity Commissioner, the issue of alleged undeclared interests of Mr Brian Hlongwa, as detailed in current court documents (see letter below).
A variety of allegations are made about Hlongwa when he was Gauteng Health MEC in an affidavit lodged by the National Director of Prosecutions in the Johannesburg High Court. These are part of an application for an asset forfeiture order for a property owned by Hlongwa at 163 Eccleston Crescent in Bryanston, Johannesburg, as well as the forfeiture of claims against the Gauteng Health Department (GHD) by 3P Consulting (Pty) Ltd and the Baoki consortium.
The affidavit deals with the alleged and/or suspected corruption of Hlongwa and officials of the GHD in relation to contracts between the GHD, 3P, certain subcontractors to 3P, Regiments Healthcare (Pty) Ltd and the Baoki consortium.
According to the affidavit: "At no time did Mr Hlongwa declare to the Gauteng Legislature the holiday to Cuba, payments towards his new house at Eccleston Crescent, various home renovations, rent-free accommodation, cash, spa treatments or other benefits received from Mr Payne, Mr Smidek, Mr Pillay or their various entities."(Note: Mr Heinz Smidek is the CEO of the Baoki consortium that won the tender from the GDH for a Health Information System).
There is reference to a previous inquiry by the former Legislature Integrity Commissioner Advocate Jules Browde, and the affidavit describes how Hlongwa admitted Payne's assistance in buying his R7.2 million house, but said that he did so as a friend. His lawyer, Mr Siven Samuel refused to answer questions about a R1 million loan by Pillay to purchase the House on the grounds of legal professional privilege.
The submission is made that "There is no evidence of any loan repayment to Mr Payne or Mr Pillay or any of the entities under their control by Mr Hlongwa or his wife or any of the entities under their control. Even if there had been a genuine loan, this was itself a gratification, and ought to have been declared by Mr Hlongwa."
It is submitted further that Hlongwa and two senior GDH officials "did not declare these benefits because they were well aware they were not innocently given or received, involved contractors to the GDoH and would attract attention."
Hlongwa's alleged undeclared benefits include the following:
1. R1.5 million paid by Pillay to Brisgo Properties, a company 100% owned by Hlongwa and his wife, to pay towards purchase of the Eccleston Crescent house.
2. A further R2.6 million paid by Payne and Pillay towards the Eccleston house. This was paid through the account of Hongwa's lawyer, Mr Samuels.
3. The purchase for R4.75 million of Hlongwa's previous house at College Drive in Bryanston by Kemsing Services (Pty) Ltd, a Cyprus-registered company owned by Smidek. It is alleged that "the timely sale of the College Drive property and the resultant access to the proceeds of the sale constituted a gratification as defined in the Prevention and Combating of Corrupt Activities Act."
4. Free rental when he stayed at the College Drive house after it was sold despite provision for occupational rental of R40 000 per month.
5. Refurbishment of the College Drive house for a total amount of R216 540.37, allegedly paid for by Payne, Pillay and their entities.
6. Payment of R1 563 674 from Kemsing on 8 May 2009 into Hlongwa's personal account purportedly for the purchase of furniture but is alleged to be "a cover-up for a cash gratification".
7. Payment for renovations to the Eccleston Crescent house amounting to R1 444 382.89 from Pillay, Samuel and entities associated with Payne and Pillay.
8. Trip to the Durban July Handicap for Hlongwa and his wife in 2008, including two nights at the Beverley Hills Hotel, paid for by Regiments.
9. Spa treatment for Hlongwa and his wife at the Fairlawns Boutique Hotel, complete with limousine transport, on 30 July 2009, paid for by 3P, the value being approximately R8381.
Hlongwa is currently the Chief Whip of the Legislature. All members of the Legislature are required to declare their interests every year and failure to do so is a serious breach of the Members' Code of Conduct.
Five years ago I was suspended from the Legislature for five days for refusing to apologise for raising questions as to how Hlongwa could afford to buy a R7.2 million house.
There is now strong evidence that Hlongwa failed to declare interests related to the alleged corruption involving R1.4 billion in contracts with the Gauteng Health Department.
My referral of this issue to the Integrity Commissioner gives Hlongwa the opportunity to prove whether he was totally honest in declaring all his interests when he was Health MEC.
Text of the letter sent to Dr Ralph Mgijima:
Dr Ralph Mgijima
Integrity Commissioner
Gauteng Provincial Legislature
Dear Dr Mgijima,
REFERRAL - ALLEGED UNDECLARED INTERESTS BY BRIAN HLONGWA
I wish to refer the issue of alleged undeclared interests by Brian Hlongwa MPL as detailed in court documents which have recently featured in the media.
I enclose an affidavit by Thabo Amos Motedi of the Directorate for Priority Crime Investigations which has been lodged in the Johannesburg High Court by the National Director of Public Prosecutions.
This forms part of an application for an asset forfeiture order for a property owned by Mr Hlongwa at 163 Eccleston Crescent in Bryanston, Johannesburg, as well as the forfeiture of claims against the Gauteng Health Department (GHD) by 3P Consulting (Pty) Ltd and the Baoki consortium.
The affidavit deals with the alleged and or suspected corruption of Hlongwa and other officials or former officials of the GHD in relation to contracts between the GHD, 3P, certain subcontractors to 3P and Regiments Healthcare (Pty) Ltd.
It is a lengthy affidavit that describes in detail how 3P won the tender to establish and manage a Project Management Unit (PMU), how this contract was irregularly increased by 20% from the original R60 million, then increased to R138 million and then extended for three years at a further cost of R273 366 500. During this time, goods and services were procured to the value of R349 732 721.10 for the GHD by 3P in breach of the procurement and financial management provisions of the Constitution and the Public Finance Management Act.
Furthermore, the relationship is described between Hlongwa and Mr Richard Payne and Mr Niven Pillay, the CEOs of 3P and Regiments respectively. Regiments was allegedly irregularly appointed to review the GHD's Folateng project at a cost of R3 492 768. According to section 13.5 of the affidavit: "Acting either in their private capacity or through corporate entities under their control, Mr Payne and Mr Pillay paid the deposits on a house for Mr Hlongwa at 163 Eccleston Crescent and further paid to renovate Mr Hlongwa's houses. Mr Payne also provided cash, an overseas holiday, a spa treatment and other benefits to Mr Hlongwa."
Page 115 of the affidavit deals with Hlongwa's failure to declare the benefits received to the Gauteng Provincial Legislature.
According to section 353 on page 115: "At no time did Mr Hlongwa declare to the Gauteng Legislature the holiday to Cuba, payments towards his new house at Eccleston Crescent, various home renovations, rent-free accommodation, cash, spa treatments or other benefits received from Mr Payne, Mr Smidek, Mr Pillay or their various entities."(Note: Mr Heinz Smidek is the CEO of the Baoki consortium that won the tender from the GDH for a Health Information System).
Sections 354, 355 and 356 deal with a previous inquiry by the Legislature's Integrity Commissioner, and describes how Hlongwa admitted Payne's assistance in buying his R7.2 million house, but said that he did so as a friend. His lawyer, Mr Siven Samuel refused to answer questions about a R1 million loan by Pillay to purchase the House on the grounds of legal professional privilege.
According to section 356: "There is no evidence of any loan repayment to Mr Payne or Mr Pillay or any of the entities under their control by Mr Hlongwa or his wife or any of the entities under their control. Even if there had been a genuine loan, this was itself a gratification, and ought to have been declared by Mr Hlongwa."
The submission of section 358 is that Hlongwa and two senior GDH officials "did not declare these benefits because they were well aware they were not innocently given or received, involved contractors to the GDoH and would attract attention."
Hlongwa's alleged undeclared benefits include the following:
10. The total amount of R1.5 million paid by Pillay to Brisgo Properties, a company 100% owned by Hlongwa and his wife, to pay towards purchase of the Eccleston Crescent house (see page 81).
11. A further R2.6 million paid by Payne and Pillay towards the Eccleston house (see pages 82 to 84). This was paid through the account of Hongwa's lawyer, Mr Samuels.
12. The purchase for R4.75 million of Hlongwa's previous house at College Drive in Bryanston by Kemsing Services (Pty) Ltd, a Cyprus-registered company owned by Smidek. It is alleged that "the timely sale of the College Drive property and the resultant access to the proceeds of the sale constituted a gratification as defined in the Prevention and Combating of Corrupt Activities Act." (see pages 84 to 88).
13. Free rental when he stayed at the College Drive house after it was sold despite provision for occupational rental of R40 000 per month (see pages 88 to 89).
14. Refurbishment of the College Drive house by Ukwakha Dezign and Creative Building Projects for a total amount of R216 540.37, allegedly paid for by Payne, Pillay and their entities (pages 89/90).
15. Payment of R1 563 674 from Kemsing on 8 May 2009 into Hlongwa's personal account purportedly for the purchase of furniture but is alleged to be "a cover-up for a cash gratification" (page 90).
16. Payment for renovations to the Eccleston Crescent house amounting to R1 444 382.89 from Pillay, Samule and entities associated with Payne and Pillay (pages 89 to 90).
17. Trip to the Durban July Handicap for Hlongwa and his wife in 2008, including two nights at the Beverley Hills Hotel, paid for by Regiments (pages 92 to 93).
18. Spa treatment for Hlongwa and his wife, complete with limousine transport, on 30 July 2009, paid for by 3P, the value being approximately R8381 (page 111).
All of the above should have been declared in the public declaration of Hlongwa's interests, but I can find no record of it in the public section of the Register of Members' Interests for the relevant years. I do not, of course, have access to the confidential section.
I request that you investigate this matter as the apparent failure to declare the above interests would be a major breach of the Code of Conduct.
Yours sincerely,
Jack Bloom
MPL
Statement issued by Jack Bloom MPL, DA Member, Gauteng Legislature, August 6 2014
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