Ms Patricia de Lille
Minister of Public Works and Infrastructure
Parliament of the Republic of South Africa
Private Bag X9155
Cape Town
8000

and

Mr Mkhuleko Hlengwa, MP
Chairperson of the Standing Committee on Public Accounts
Parliament of the Republic of South Africa
PO Box 15
Cape Town
8000

Dear Minister de Lille and Mr Hlengwa

ARMSCOR lease agreement

1. I refer the Minister and the Standing Committee on Public Accounts (SCOPA) to the attached lease agreement between the Armaments Corporation of South Africa SOC Ltd (ARMSCOR) and the Department of Public Works.

2. I have been informed that allegedly during former President Thabo Mbeki’s tenure, when Mr Mosiuoa Lekota had been Minister of Defence, Mr Lekota had apparently written to the Department of Public Works instructing the department to not pay rent on the ARMSCOR building as he allegedly could not understand why rent should be paid for a building owned by the Department of Defence.

3. As I understand it, this instruction was henceforth honoured and allegedly never disputed.

4. Yet, the attached lease agreement apparently issued in February 2019 was signed in January 2022, and the signatories had allegedly, in 2020, processed (or had affected the processing of) a payment of ±R180 million in arrears rent money in a minimum of two tranches.

5. Apparently, the payment system does not allow for the processing of such large amounts, yet the payments mysteriously slipped through the cracks.

6. There are allegations that officials were paid kickbacks for processing these transactions.

7. It is alleged that since June 2021 the rental contract of millions-upon-millions of Rand per month for a period of five years commenced, whilst there is allegedly a directive that prevents ARMSCOR from leasing offices from other entities.

8. Some questions I have for the Minister is, who paid for the construction of the building and who is its current owner? To whom is rent paid exactly and by whom i.e., whom is the debtor and whom is the creditor? Why did it take three years to sign a contract, but alleged payments were made in terms of that unsigned contract? Why is the contract so poorly constructed that the signatory for the lessee, the Acting Deputy Director General’s full name is not listed?

9. I would therefor ask whether any of the allegations and information are true and whether SCOPA would not deem it fit to investigate the matter.

Yours sincerely
Mr Bantu Holomisa, MP
President of the United Democratic Movement