City confirms recovery of R290 million from Denel
11 December 2018
Today, I received notice that the R290 million loan owed to the City by Denel has been repaid in line with the loan repayment date of the 10th of December 2018.
This follows the lending of residents’ money to Denel, through Gupta linked Regiments Capital, via an unsecured loan made without the City’s knowledge and irrespective of the financial risk posed to residents’ money.
While the City welcomes the repayment of the loan, it is unfortunate that said repayment was made possible through a bailout funded by money acquired from hard working taxpayers. The bailout has come in the form of a guarantee of R3.43bn to Denel, which has been marred by allegations of state capture lead by the nefarious Gupta family.
Indeed, it is through the state capture project that the loan to Denel was made possible in the first place.
A recent report by amaBhungane’s has shed light on alleged collusion between Regiments Fund Managers, which has also been linked to the Guptas, former City Mayor, Cllr Parks Tau, and former MMC for Finance and current Leader of the ANC’s Johannesburg Region, Cllr Geoff Makhubo.
Working together, Cllr Tau and Cllr Makhubo paved the way for Regiments Fund Managers to transfer the R290 million to Denel.
In turn, Regiments was able to enrich itself to the tune of a R3.42-million fee from Denel for securing the R290-million in debt from the City’s sinking fund
In 2006, Regiments Fund Managers received a contract to manage the City’s “sinking fund” - a pool worth billions of Rand set aside to meet the City’s future debt repayment needs.
A contract signed by Makhubo shows that Regiments agreed to pay 10% of its fees to Makhubo’s company, Molelwane Consulting, in exchange for Makhubo’s “maintenance of strategic relationships with the COJ [City of Johannesburg].”
With the blessing and alleged aide of Cllr Tau - who has admitted on record that he knew of the relationship between Makhubo and Regiments - Cllr Makhubo, who was tasked with exercising political oversight on one of the City’s largest contracts, was allowed to feast off the same set of contracts he had oversight over.
Further, it is alleged that the role of Cllr Parks Tau was more than that of a bystander. Cllr Tau not only knew of the crooked deal, it is suspected that Cllr Tau allowed the arrangement to take place so as to also benefit his political party the ANC. This will be confirmed through an additional on-going investigation into the matter.
Yesterday, I laid criminal charges of fraud, corruption, money laundering and racketeering against both Geoff Makhubo and Parks Tau.
The depth of criminality and the arrogance displayed by the ANC, Makhubo and Tau is astounding to say the least.
The City is currently at an advanced stage of conducting its own forensic investigation into this matter. Once completed, and given the serious nature of this criminality, I have instructed General Shadrack Sibiya, the Head of the City’s Group Forensic and Investigation Services Unit, to set up a meeting with the top leadership of the Hawks to ensure that every effort is made to see to it that blatant criminality is met with the full might of the law.
Since entering office as the Executive Mayor of Johannesburg, my promise has been to rid the administration from the deep rooted corruption inherited from previous administration.
I will continue to ensure that residents of this City grow in their confidence for the multi-party government to lead ethically, putting the needs of the residents first.
Issued by Luyanda Mfeka, Director, Mayoral Communications, Office of the Executive Mayor, 11 December 2018
