WHY DOES JOHNNY SEXWALE GET GAUTENG GOVT LOAN?
Gauteng Enterprise Propeller (GEP), an agency of the Gauteng Department of Economic Development, has paid R400 000 to support a company part-owned by Mr Johnny Sexwale, brother of Human Settlements Minister Tokyo Sexwale.
This is revealed in a written reply to my questions by Economic Development MEC Firoz Cachalia.
According to Cachalia, this money was paid to Franchise Business Innovations, of which Johnny Sexwale is a director. It was paid in October 2008 after the GEP Credit Committee recommended that "the concept be developed further under the Black Franchisors Development program."
According to GEP, a franchise development support agreement was signed, and a further R600 000 is still to be disbursed, subject to the conditions in the agreement. The money is not repayable at this stage, but if GEP terminates the agreement because of breach, then the disbursed amount will be converted into an interest bearing loan and becomes repayable.
This all looks very fishy. Mr Sexwale is listed in the CIPRO register as the director of 21 companies. GEP should only be giving loans to start-up small businessmen, rather than someone who heads many established businesses.
Sexwale is also a Director since January 2009 of Blue IQ Investment Holdings, which is a sister agency of GEP in the Gauteng Economic Development Department. It is surely a conflict of interest for a director of a government agency to be in receipt of a loan from another government agency.
GEP has been severely criticized by the Auditor General for many of its loans and its general inefficiency and waste. Politically-connected people seem to have benefited most, rather than ordinary struggling businesses that really need a hand up.
MEC Cachalia should review all GEP's loans, recover as much money as possible, and act against any possible corruption.
Statement by Jack Bloom, MPL, Democratic Alliance Gauteng corruption spokesperson, February 1 2010
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