Mashaba says probes could reveal extent of state capture in City of Joburg
Johannesburg - Ongoing forensic investigations into tenders at the City of Johannesburg during the African National Congress (ANC) administration, including the probe into Gupta-linked company Regiments Capital's 10-year long contract with the City could be a first case of state capture identified in the City of Johannesburg, mayor Herman Mashaba said on Thursday.
Mashaba's statement follows an Amabhungane expose on Thursday detailing how ex-MMC for finance Geoff Makhubo, under former ANC mayor Parks Tau, was reportedly paid R30 million to act as a ''broker'' for the company at the city.
''What is clear from the [Amabhungane] article is that Regiments Capital bought influence in the ANC by benefitting its leadership, their families and paying for the ANC’s regional elective conference. One is left wondering whether the city’s final forensic investigation will deem this to be the first case of state capture identified in the City of Johannesburg,'' Mashaba said in a statement on Thursday.
The Amabhungane investigation showed how Makhubo allegedly received at least R30 million in payments from Regiments Fund Managers, part of Regiments Capital. According to the report, Makhubo and his company Molelwane Consulting received the payments after Regiments won a contract from the city to manage its ''sinking fund'' in 2006. The fund is a pool of billions of rands earmarked for future debt repayments. Regiments further donated R250,000 for the ANC regional elective conference in 2008.
By 2015, Regiments had taken an estimated R300 million in fees from the city, while Molelwane received a 10 percent cut from the deal. Mashaba said the council has given city manager Ndivhoniswani Lukhwareni the go-ahead to negotiate with Regiments and take back the fund. The Regiments contract with the city expires in 2020.
''I have instructed the city’s legal team to explore options for both civil and criminal legal proceedings so that the city may recover monies owed to it. This includes monies given to Regiments due to its excessive pricing, conflict of interests and corrupt activity.''
''The ANC, and particularly Councillor Geoff Makhubo, has consistently fought the multi-party government’s efforts to combat corruption in the city. We have always suspected that this is due to their concern that someday they would be implicated. It appears this day has come.''
The ANC in the Johannesburg region said it would advise Makhubo to avail himself to any possible investigation by the governing party.
''The ANC Joburg region notes the report from Amabhungane on the alleged impropriety of its Chairperson related to the City of Johannesburg Sinking Fund. The ANC Joburg executive committee has been briefed by comrade Makhubo on the matter. Comrade Makhubo has already committed to avail himself to provide all relevant information to relevant ANC structures including the Integrity Committee,'' said spokesman Jolidee Matongo.