Mashaba meets Head of the Hawks over serious corruption uncovered in Joburg

30 January 2019

Yesterday I met with the National Head of the Hawks, General Godfrey Lebeya, and other senior members of his team. The purpose of this meeting was to bring a number of serious criminal matters to his attention and express my concern over the failure of our criminal justice system to ensure that the rampant corruption uncovered in the City of Johannesburg results in criminal convictions.

I was joined by General Shadrack Sibiya, Head of the City’s Group Forensic and Investigation Services (GFIS), whose team is mandated with uncovering the corruption fraud and theft our administration inherited.

To date, they have been investigating over 4000 cases totalling R24 billion.

Since its inception in late 2016, the City’s GFIS Unit has completed over 100 forensic investigations with serious criminal findings. Yet, despite the City’s efforts in exposing and ending this rot, criminal cases opened by the City are not resulting in prosecutions.

I would like to sincerely thank General Lebeya for this constructive engagement and his personal undertaking to ensure a better working relationship between the Hawks and the City. This will include the City’s GIFS Unit being given the opportunity to present its forensic reports to senior leadership at the Hawks, as well as certain cases being transferred to their serious crime unit.

The Hawks will also assist the City in engaging the Asset Forfeiture Unit, who will be included in all meetings going forward. This will ensure that we can start to reclaim the millions stolen from our residents.

Some of the criminal cases the City raised during the meeting included:

- The R1.7 billion failed Johannesburg Broadband Network Project which saw national cabinet members benefit to the tune of millions of Rand. Today, three years later, the non-operational network is valued at only R600m. Given that this project included a multi-national company listed on the New York Stock Exchange, I have also reported this matter to the United States Department of Justice. I believe that this case provides an excellent opportunity for cross-Atlantic co-operation in the fight against corruption between the relevant authorities in the US and South Africa.

- The allegedly corrupt relationship between Regiments Fund Managers and former MMC of Finance in the City and current leader of the ANC in Johannesburg, Geoff Makhubo. 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. By 2015, Regiments had amassed an estimated R300-million in fees. 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].”

The extent of the looting that has been uncovered in the City was beyond what I could ever have imagined. However, of even greater concern, has been the failure of the criminal justice system to ensure that these criminals face the full might of the law.

To date, the National Prosecuting Authority has withdrawn a number of clearly prosecutable cases from court for no valid reason. In other instances, the investigation officers do not appear to be putting the required effort into ensuring that criminals have their day in court.

This is why I have also written to the new Head of the NPA, Adv. Shamila Batohi, to request a meeting once she officially takes up her position next month.

Criminal cases which I intend bringing to Adv. Batohi’s attention include:

- Former candidate valuer, Mbali McClare, who was arrested for deliberately undervaluing 22 properties in the City, amounting to just under R500 million. Her case was nefariously withdrawn by the NPA because they alleged they were unable to trace any of the property owners. This despite their offices being situated in a building owned by one.

- Two directors of Setheo Engineering were arrested in 2017 for colluding with City Power officials and receiving payments exceeding R88 million for work that was never completed in the building of the Eldorado Park sub-station and refurbishment of the Hopefield sub-station. They had secured the contract through a fraudulent bank guarantee which led the City to believe that they had the balance sheet to handle the project.

- Former MMC of Housing, Dan Bovu was arrested on charges of corruption and theft for the illegal sale of state land to vulnerable people within our society. This case too was provisionally withdrawn from the roll because material witnesses were no longer prepared to testify after being paid money by the very same trust that was established by Bovu to sell City owned land. Rather than pressing further charges for defeating the ends of justice, corruption and witness interference, the NPA saw fit to provisionally withdraw the case from the roll.

Only by working together, will we be able to end the scourge of corruption in our city and country.

With Johannesburg being the economic engine of our country, it is essential that we do not turn a blind eye to the rampant looting and theft which took place. This will be key to rebuilding trust, getting our country working again and on the path to prosperity.

Issued by Luyanda Mfeka, Director: Mayoral Communications, Office of the Executive Mayor, 30 January 2019