Admin
20 Jul, 2020
Alleged looting of state resources, through the DBSA, by some of the same people who have been fingered in the Public Investment Corporation investigation
Mr CM Ramaphosa President of the Republic of South Africa Private Bag X1000 Pretoria 0001 Dear Mr President RE: Alleged looting of state resources, through the DBSA, by some of the same people who have been fingered in the Public Investment Corporation investigation 1. I wrote to you a little more than a month ago, on 17 June 2020, regarding my grave concerns over the apparent looting of state resources by some of the very same individuals who were found to have had an enhanced ability to secure easy access to Public Investment Corporation (PIC) funds, as well as some new characters, who have now seemingly set their sights on looting from the Development Bank of Southern Africa (DBSA). 2. In the 17 June-letter I also suggested that Treasury intervene and cause the DBSA to urgently stop the Crede Power and Infrastructure funding, via a vehicle called Poseidon, and that investigation be made into the allegations of impropriety. 3. Much water has flown under this bridge and, since then, the individuals who I had named in my letter, first tried to bully me via a lawyers’ letter and had ultimately run to the courts in an attempt to, what appears to me, intimidate and of course gag me. Their first volley failed as the court removed their application from the urgent court roll and they were ordered to pay the wasted costs occasioned by the set-down on the urgent court roll. 4. I had also made a Promotion of Access to Information Act (PAIA) application to the DBSA to obtain all the information pertaining to the Crede Power and Infrastructure/Poseidon water project but was unsuccessful because the DBSA relied on frivolous technicalities to refuse my request. I am of the view that this was a gambit to play for time. Speculating about the real reason why they acted in this manner, leads me to think someone was up to no good. 5. The DBSA’s chief executive officer and managing director, Mr Patrick Dlamini, had also decided to engage with me in letter-warfare, which I believed to be yet another effort to intimidate me. But, knowing what I know now, I suspect it might also have been a play for time to cook the books. 6. I was quite disturbed, last week, to learn that there had been alleged interference with the DBSA’s computer systems, where electronic documentation and records on the Crede Power and Infrastructure/Poseidon water project had been made to vanish at the time of my PAIA application, thus frustrating a good cause, whilst aiding and abetting those suspected of ill deeds. 7. Up to now, there have been far too many coincidences, that point to a massive cover-up. For instance, Crede Power and Infrastructure’s website being unavailable, just after my complaint to you and a threat from some lawyers, when I wanted to double-check my researched information. Then the DBSA spitefully refused my PAIA application and Mr Dlamini inadvertently confirmed, in writing, that the information at my disposal was accurate. Now we have an alleged sudden clean-up and wipe-out of critical information on the DBSA’s funding of the Crede Power and Infrastructure/Poseidon water project. 8. This brings another serious matter into focus and that is whether there are any other current funding deals at the DBSA, involving the same parties, of which we are unaware and whilst the grass is growing underneath your feet, evidence of such are also disappearing. 9. Given the information I have imparted to you in this writ, I wonder whether you and/or Minister of Finance Tito Mboweni can rely on any information provided to you by, who in my view are, potentially discredited DBSA executives. 10. I submit to you that there is a clear need for an independent forensic investigation to review the entire matter and in particular the alleged tampering with the DBSA’s computer records. Forensic investigators will be able to validate which files and what information have been tampered with and/or have been deleted. Computer experts will also be able to ensure that any restored information is legitimate. 11. The other matter that I had raised in my 17-June letter had been that PIC board member, Ms Irene Charnley, had allegedly received a USD 20 million loan from the DBSA and that she has yet to pay that back. It might behove you to also have investigation made of the DBSA’s loan practices and whether those loans are serviced, and who the culprits are that do not pay their instalments as per the agreement with the bank and why. 12. I remain at your disposal to discuss these matters and I reiterate my request that a forensic audit is urgently needed to get to the bottom of what seems to be the machinations of the greedy and the looting of state resources. Yours sincerely Mr Bantu Holomisa, MP President of the United Democratic Movement Copied to: Minister of Finance, Mr Tito Mboweni DBSA Chairperson, Mr Enoch Godongwana DBSA Chief Executive Officer and Managing Director, Mr Patrick K Dlamini
Admin
13 Jul, 2020
DBSA’s strange treatment of the allegations of corruption regarding the Poseidon water project and its funding
Mr Patrick K Dlamini Chief Executive Officer and Managing Director Development Bank of Southern Africa PO Box 1234 Halfway House 1685 Dear Mr Dlamini Development Bank of Southern Africa’s strange treatment of the allegations of corruption regarding the Poseidon water project and its funding 1. I respond to your letter of 10 July 2020, which the Development Bank of Southern Africa (DBSA) Company Secretary, Ms Bathobile Sowazi, sent at 22:57 on a Friday. Looking back at other emails, after hours correspondence seems to be the norm at the DBSA and one can but speculate as to the reasons why. 2. In all your letters to me regarding the Poseidon water project you sound defensive and blustering regarding the DBSA’s handling of this funding deal. Why would you cover your wickets with such excessive vigour and choose to cast aspersions on my bona fides? 3. You stated that I have “…publicly disclosed confidential information and documents belonging to the DBSA’s clients…”, what I interpret this to mean is that the information at my disposal is true and accurate. You are, in fact, right to be worried that the DBSA’s credibility might be undermined, as it, and/or some of its leadership, are seemingly engaged in activities they do not want exposed. 4. It is interesting that you decided to pre-empt President Ramaphosa’s response to my request for an investigation of the Poseidon deal. Now that you have positioned yourself as the president of this country, will you please tell the nation how the following people, as per your below document, are involved in the Poseidon transaction and how they directly and/or indirectly benefit from this deal. 5. This list of politically exposed persons (PEPs) in Poseidon’s group structure is a veritable Who’s Who of directors of public owned entities. It raises questions about the comprehensiveness and effectiveness of the DBSA’s due diligence processes in terms of corporate governance as defined in the Companies Act, No. 71 of 2008 and its 2011 amendment, the Public Finance Management Act, No. 1 of 1999 and the fourth revision of the King Report on Corporate Governance. 6. Item number 4 of the above document (in the picture), refers to the Public Investment Corporation (PIC) directors who were identified as PEPs in this deal by virtue of being board members of a state-owned entity. Who exactly are these PIC board members your document refers to i.e. the board members at the time of the submission of the application or those at the time of its approval? Either way it would be helpful if you could explain their involvement in this private, for-profit matter and whether the DBSA condones this kind of association. 7. It is confounding that your very own document states that Dr Renosi Mokate is a PEP by virtue of her being a trustee of the Harith Holdings Employee Trust and the board chairperson of the Government Employees Pension Fund (GEPF), yet she made a bare denial of any connection to Poseidon in her submission to the court in her defamation case against me and the United Democratic Movement. So, the questions the public and/or a judge might ask you are: Who added her name to this document, and why? Also, from where did you obtain this information? 8. Ultimately you are to be thanked for confirming the veracity of the above information. We will however ask those individuals (including the GEPF chairperson) who ran to court, to explain why their names appear on a DBSA document pertaining to the Crede Power and Infrastructure Investments/Poseidon funding application. 9. Our letter to the President is clear in terms of what we want to be investigated. Part of that would be that you seemingly misled the DBSA’s board by allegedly recommending that this project be funded despite the above information being at your disposal. Worse still is that some of these PEPs have been fingered in the Commission of inquiry into allegations of impropriety regarding the Public Investment Corporation. Why are you promoting and protecting these people? 10. You have placed on record that “On or about June 2019 the DBSA received an application from Crede Power and Infrastructure Investments…”. Mr Jabu Moleketi left as DBSA Chairperson in December 2018. What these two facts mean is that the Crede Power and Infrastructure Investments/Poseidon funding application was submitted to the DBSA within six months of his having left the DBSA, which I understand is in contravention of the DBSA’s twelve month “cooling off” period for directors who have left the Bank. The public might ask you whether these facts were disclosed to the Board when it considered and approved the funding application? 11. Your artless attempt to threaten me with “the law” where it pertains to whistleblowing, begs the question: “Is it not nice and convenient that the DBSA decision-makers, in the Poseidon water project deal, can hide behind this country’s laws?” This might exactly be the reason why there was no other way of exposing the alleged corruption in the way that we have. 12. The DBSA’s refusal of my Promotion of Access to Information Act 2 of 2000 request, because of technicalities, is utter drivel. You and Ms Kim Sanderson (DBSA Deputy Information Officer) who wrote to me, know exactly to which deal I was referring and what information I had asked for. Such seemingly spiteful delaying tactics could be interpreted as the DBSA playing for time to “cook the books”. If I were in your boots, I would be preparing to explain this mess in court. 13. Your 10 July 2020 letter smacks of a panicked response to being confronted by facts that are not to your and your colleagues’ liking, least of all to the liking of the PEPs involved in Poseidon. 14. I walk away from all your correspondence, thus far, with a very repulsive taste in my mouth and the perturbing feeling that you are not acting in the best interest of the people of this country. Yours sincerely Mr Bantu Holomisa, MP UDM President Copied to: Minister of Finance, Mr Tito Mboweni DBSA Chairperson, Mr Enoch Godongwana DBSA Company Secretary, Ms Bathobile Sowazi DBSA Deputy Information Officer, Ms Kim Sanderson Mabuza Attorneys, Attorney Eric Mabuza
Admin
23 Jun, 2020
DBSA approval of Poseidon water project grant/loan: CEO Sandile Sokhela seems to be economical with the truth
Mr Enoch Godongwana Chairman of the Board of Directors Development Bank of Southern Africa PO Box 1234 Halfway House 1685 Dear Mr Godongwana DBSA APPROVAL OF POSEIDON WATER PROJECT GRANT/LOAN: CEO SANDILE SOKHELA SEEMS TO BE ECONOMICAL WITH THE TRUTH 1. I write to your good office regarding a grant/loan application submitted to the Development Bank of Southern Africa (DBSA) by Poseidon Pty Ltd (‘Poseidon’). 2. According to the information at my disposal, the DBSA had on 26 March 2020 approved funding for Poseidon to the tune of R50 million to conduct feasibility studies, for some kind of water project/s, in South Africa and other Southern African countries. Another R300 million is apparently still to be disbursed for the implementation of Poseidon’s project. 3. In terms of the DBSA’s March approval, Poseidon’s shareholding is as follows: 4. As I understand it, Harith General Partners invested in Crede Power and Infrastructure Investments (‘Crede’) via a capitalisation of R25 million over a four-year period to fund continued operational and other costs. Harith invested in Crede with an objective to capacitate an emerging fund manager that would complement the activities of Harith as a fund manager to the Pan African Infrastructure Development Funds (PAIDF I and II). To date Crede has drawn down R12 million of these funds. 5. My information shows that the DBSA Compliance Unit undertook Politically Exposed Persons (PEPs) checks on Poseidon’s shareholder and group companies and various directors were identified as PEPs by virtue of them being board members of various state-owned entities. Amongst others, the following is identified as a PEP: • Mr Tshepo Mahloele who is a non-executive director in the Crede was identified as a PEP by virtue of him being a former board member of Telkom SA in 2008; his PEP status is inactive as of 2008. Mr Mahloele is the CEO of HGP and sits on Crede’s board. 6. As you are aware, I recently wrote to the President of the Republic (letter attached for your ease of reference) to register my concern over what seems to be another attempt to loot state resources, as had occurred at the Public Investment Corporation, but this time at your organisation, using Poseidon as a vehicle. I had sourced some of my information from their websites, but I have since discovered that both Crede Capital Partners and Crede Power and Infrastructure Investments’ websites (https://credecapital.co.za/ and http://credepower.co.za/ respectively) have been discontinued/are no longer visible. Would one be wrong in surmising that someone is trying to cover their tracks? 7. In particular, during my initial search, Crede Power and Infrastructure Investments’ website proudly shared that Mr Tshepo Mahloele was its director, but I was recently confronted with a letter from Crede/Poseidon’s lawyers (also attached) categorically stating that Mr Mahloele has never been its director. What is however extremely odd is that, Mr Mahloele himself, in his written submission on 15 April 2019, to the Judicial Commission of Inquiry into allegations of impropriety at the Public Investment Corporation (‘Mpati Commission’) declared in Paragraph 3.3 that: “In addition to the positions already referred to, I also serve on the boards of NOVO Energy, Anergi, Lanseria International Airport, Rainfin, 4 Africa Exchange, Crede Power & Infrastructure Investments and Dark Fibre Africa, amongst others.” One is forced to ask whether Mr Mahloele had then lied to the Mpati Commission, or whether Mr Sandile Sokhela, Crede’s Chief Executive Officer, is lying now (or has lied in his grant/loan application to the DBSA). Someone is definitely lying, and one is worried that public entities, such as the DBSA, are doing business with people of this ilk. 8. I have instructed my attorney, Mr Eric T Mabuza, of Mabuza Attorneys, to submit a Promotion of Access to Information Act (PAIA) application to the DBSA to obtain the attending documentation of Poseidon’s DBSA loan/funding application e.g. the application itself, information on the DBSA’s due diligence, relevant minutes of DBSA meetings, contracts, and any other pertinent information. I implore you to cooperate with our PAIA application, not only because it is to the DBSA’s advantage, but also because it is in the public’s interest that the truth comes to light. 9. Given that the DBSA board has already approved Poseidon’s grant/loan it might be advisable that you immediately suspend any disbursement/s to that company until the matter is satisfactorily addressed by the President and/or the courts. I am at your disposal and look forward to engaging with you. Yours sincerely Mr Bantu Holomisa, MP UDM President Copied to: President of the Republic of South Africa, Mr Cyril Ramaphosa Minister of Finance, Mr Tito Mboweni PIC Chairperson, Dr Reuel Khoza DBSA Company Secretary, Ms Bathobile Sowazi Mabuza Attorneys, Attorney ET Mabuza
Admin
17 Jun, 2020
DBSA: looting of state resources by some of the same people involved in the Public Investment Corporation saga
Dear Mr President DBSA: looting of state resources by some of the same people involved in the Public Investment Corporation saga 1. I write to you with grave concern over the apparent looting of state resources by some of the very same individuals that were found to have had enhanced ability to secure easy access to Public Investment Corporation (PIC) funds. We seem to have the same style of legal corruption, but this time it is at the Development Bank of Southern Africa (DBSA). A curious feature, however, is the emergence of the involvement of the Chairperson of the Government Employees Pension Fund (GEPF). Elitist people seem to behave like locusts that hop from one source of easy funding to the next; voraciously consuming every opportunity they can generate through whatever means. Once they have depleted one source, they effortlessly jump to the next one with the same agenda – enriching themselves at any cost and patting themselves on the back for being such clever operators. 2. I believe your appointment of the Judicial Commission of Inquiry into allegations of impropriety at the PIC, under the leadership of the Honourable Justice Lex Mpati, (‘the Mpati Commission’), was, amongst other concerns, exactly to look into this kind of behaviour that now seems to rear its ugly head at the DBSA. 3. I wish to refer you to an observation made by, and a salient finding of, the Mpati Commission regarding a company called Harith. The Mpati Commission, on page 419, of its report to President Ramaphosa, directly quotes part of my submission, i.e.: “One of the most difficult tasks regarding dealing with the type of corruption that is alleged to have happened at the PIC is the sophisticated nature of the transactions. Corruption can come in two forms, legal and illegal corruption. Legal corruption occurs when the elite build a legal framework that protects corruption or manipulate existing legal framework without necessarily breaking the law.’ The Mpati Commission continued saying that: “When going through the story of Harith, these words resonate.” In paragraph 62 on page 434 the Mpati Commission also stated that: “Harith’s conduct was driven by financial reward to its employees and management, and not by returns to the GEPF. In essence, the PIC initiative, created in keeping with government vision and PIC funding was ‘privatised’ such that those PIC employees and office bearers originally appointed to establish the various Funds and companies reaped rich rewards.” Clearly there is enough motivation to have, at the very least, immediately suspended Harith’s management of any and all of PIC/GEPF funds and launched further investigation. Has government taken any action to protect the PIC/GEPF from these self-enriching individuals? If not, why not? 4. To make matters worse, this recipe for plundering state resources is seemingly being replicated at the DBSA with the very same people involved. This time, at the face of it, with a new vehicle called Poseidon Pty Ltd, of which the shareholding is as follows: On a side note, according to Crede Capital Partners’ website, their team has managed two PIC projects i.e. “Univen” (R920 million) and the “Oceans Hotel Property Development” (R600 million). The Mpati Commission’s view that where Harith was concerned, “…the approach taken provided easy access to PIC funds, influence and including an enhanced ability to secure additional investment…”, it is therefore of interest to know that another company with close ties to Harith Group Chief Executive Officer, Tshepo Mahloele, had access to PIC contracts. 5. The DBSA has recently funded Poseidon to the tune of R50 million to conduct feasibility studies, for some kind of water project/s, in South Africa and other Southern African countries. Another R300 million is apparently still to be disbursed for the implementation of Poseidon’s project. 6. The Mpati Commission also said in its report on page 436, paragraph 67, that: “The Board of the PIC should examine whether the role played by either Mr [Jabu] Moleketi and Mr Mahloele breached their fiduciary duties or the fit and proper test required of a director in terms of the Companies Act.” With this knowledge in mind, please take note that Mr Moleketi (a former DBSA board chairperson) and Mr Mahloele (former head of the DBSA’s Private Sector Investment Arm) are both directors of Poseidon. Mr President, history is repeating; Mr Moleketi had fulfilled the highest leadership roles at both the PIC and Harith. Mr Mahloele, in turn, had been internally transferred (as the Mpati Commission described it) as head of the Pan African Infrastructure Development Fund (PAIDF) to Chief Executive Officer of Harith. The following persons are also Poseidon directors: 6.1. Dr Renosi Mokate (GEPF Board Chairperson), 6.2. Ms Lungile “Zee” Cele (independent non-executive director of Harith General Partners and a former board member of Eskom Holdings SOC Ltd), 6.3. Mr Roshan Morar (former PIC Deputy Chairperson, former Chairman of the South African National Roads Agency SOC Ltd, chairman of Ithala Development Finance Corporation (Ltd) and non-executive director of Harith General Partners) and 6.4. Ms Motseoa Alix-Mary Lugemwa (former Chairperson of the Gautrain Management Agency Board and non-executive director of PAIDF). This list reads like a dream-team of politically exposed persons (PEPs) who seemingly have access to public funds. It is especially worrying to find the name of Dr Renosi Mokate on this list; a scenario where a GEPF Chairperson has access to public funding using a private conduit, after having seen what happened at the PIC, is indefensible. She must be removed as GEPF Chairperson with immediate effect. It is also worth noting that Mr Roshan Morar is named and shamed in the Mpati Commission’s report regarding the Lancaster Steinhoff, Project Sierra case study. The Commission on page 41, paragraph 98, said that: “The chair of the IC [Investment Committee] was Mr Roshan Morar, a PIC non-executive director, who signed off on the IC resolution for this investment. At the same meeting, he was also appointed as a board member to L101 representing PIC’s interests which clearly indicates a conflict of interest.” 7. It would be advisable that Treasury quickly intervenes in the DBSA’s funding of Poseidon’s water project and that it immediately freezes the payment of the first tranche of R50 million, as well as the second tranche of R300 million implementation funding, until the Mpati Commission’s findings and recommendations are addressed. If the R50 million has already been disbursed, it must also be recouped in the meantime and it might be advisable to follow the paper trail to see if the money was spent for its intended purposes. 8. Another matter that I wish to address with you is that of Ms Irene Charnley and her inclusion on the PIC’s interim board. She allegedly received R1,7 billion (in today’s terms) from the PIC for her company, Smile Telecoms Limited. I wrote to Finance Minister Tito Mboweni about this matter on 3 June 2020 and have attached the letter for your ease of reference. Since writing that letter, I have heard that the PIC has written the R1,7 billion off as a bad investment. Moreover, it has come to my attention that Ms Charnley has also knocked on the DBSA’s door for funding. She received a USD 20 million loan, which she has failed to pay back. The Al Nahla Group, with whom she is partnered, is a Saudi Arabia-based company. The situation might mean the PIC and DBSA’s monies were channelled out of South Africa on purpose and someone else is smiling to the bank, because it definitely is not South African investors. We now know of two instances where Ms Charnley dipped into public funds, where the money seems to have evaporated into thin air. On what basis would a government serious about fighting corruption dispatch a person of this quality and competence to resuscitate a key public entity such as the PIC? The consequences for her actions should not have been to be rewarded, at the very least, she should be immediately removed as a member of the PIC’s interim board. Yours sincerely Mr Bantu Holomisa, MP President of the United Democratic Movement Copied to: Minister of Finance, Mr Tito Mboweni DBSA Chairperson, Mr Enoch Godongwana PIC Chairperson, Dr Reuel Khoza
Admin
04 Nov, 2014
Debate: Development Bank of Southern Africa Amendment Bill (DBSA)
Speaker and Honourable Members, The UDM supports the Bill. We support the extension of the mandate of the Development Bank of Southern Africa to provide infrastructure development finance to key infrastructure sectors, such as water and sanitation, energy, transport, education, health and ICT beyond the Southern Africa Development Community (SADC), that is, to the rest of the African continent. This step will in our view go a long way towards enhancing trade, economic growth and development on the continent. There are however several areas of concern to consider. First, there have been many instances in the past, where the work of the Industrial Development Corporation (IDC) and the Land Bank clashed with the mandate of DBSA. As already indicated earlier, there is potential for the mandate of DBSA to clash and overlap with that of the African Development Bank. Therefore, more effort needs to be put into refocusing the mandate of all these institutions in order to ensure value for money and to prevent a wastage of government resources that results from duplication of work. Second, a large chunk of DBSA’s disbursements go to municipalities. It therefore follows that, while it is prudent not to amend the Act in order to allow for representation of local government or other “interest group” – as the Committee aptly put it, we cannot overemphasise the importance of DBSA forging close relationships with municipalities, as they are its biggest clients. Third, the increase in authorised share capital is welcome. We however hope that by not identifying certain areas of focus on the continent, we are not stretching ourselves too thin. By biting more than we can chew we run the risk of DBSA not being effective in its infrastructure development programme in South Africa and the continent. Even worse it might find itself encountering financial difficulties in future. Thank you
