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Baloyi ‘colluded and manoeuvred’ to hide R5m missing BBC cash

Feb 11 2018 06:23
Dewald van Rensburg and Lesetja Malope

Johannesburg - An investigative report into a missing R5.7 million donation has made damning findings against the Black Business Council’s (BBC) suspended president Danisa Baloyi and her associates.

The confidential report, compiled by audit firm SekelaXabiso (SKX), was submitted to the BBC last week.

The donation from Airports Company South Africa (Acsa) went missing last year.

According to the report, Baloyi colluded with informally-appointed fund-raiser Dominic Ntsele and her associate, Bibi Hawa Khan, to hide the existence of the donation from the rest of the BBC – and then ensured it was paid to Khan’s company, Merit Energy.

City Press revealed the drama caused by the missing money within the BBC late last year.

The donation was solicited from Acsa chief executive Bongani Maseko by Ntsele, who was a consultant to him and the airports company.

With an informal commitment for R5 million in the bag, Baloyi sent Maseko a letter in March last year saying that the money should be paid to Merit Energy and not to the BBC.

The report documents how Baloyi apparently pleaded ignorance when BBC officials accidentally discovered the donation.

This happened when another BBC fund-raiser went to Acsa in July to ask for money, but was rebuffed because Acsa believed it had just given the organisation R5 million.

Different parties gave conflicting versions of what happened next, but according to the SKX report, Baloyi and Ntsele have “lied”.

Nstele has repeatedly claimed that he had “accidentally” caused the money to be paid into the account of a different client of his.

THE ROLE OF ACSA 

Ntsele paved the way in a meeting with Maseko in which they informally agreed on a R5 million donation for the BBC.

Shortly after that, Maseko received a letter from Baloyi thanking Acsa and saying Merit Energy would send an invoice to the airports company. The letter was apparently hand-delivered to Maseko’s personal assistant.

Merit then sent two invoices, for R2.85 million (including VAT), which Acsa duly paid.

Although splitting the donation into two instalments served no apparent purpose, SKX “could not find anything patently irregular with the payment in two tranches”.

“Furthermore, we would not be in a position to venture an opinion on whether the internal Acsa procedures and policies were duly adhered to as this would have been beyond our mandate,” the report states.

Word then spread among BBC officials. The organisation’s Treasurer-General Sindiswa Mzamo claims that Baloyi “indicated that she was not aware of the R5 million sponsorship”.

Baloyi did however say that she and Ntsele asked for money from Acsa. Baloyi then undertook to check with Acsa’s chief executive and advised that Ntsele would also follow-up.

“It is critical to note that in his funding update or report, Mr Ntsele never once mentioned the issue of the Acsa Sponsorship which had been received at least five months before the said meeting,” the report found.

“Even more concerning is the fact that [BBC vice president for professionals Zukiswa] Ntlangula asked [Ntsele] twice at the very meeting of the Finance Task Team whether there had been any payments received from Acsa, and Mr Ntsele emphatically denied any knowledge of payment by Acsa.”

The report further found that Baloyi reported that she had followed up on the matter by writing a letter to Maseko on August 15 last year, after receiving more information from the BBC’s treasurer-general and [BBC’s executive head of trade investment and international relations] Xolisa Moerane.” 

When she was caught out, Baloyi initially made her BBC colleagues believe that her signature was forged and that her letter to Acsa was fake.

She was then pressured to lay a charge of fraud, which she never did.

THE “MUTUALLY DESTRUCTIVE VERSIONS”

Baloyi refused to meet SKX for an interview but gave them a written response containing “three mutually destructive versions” of what happened to the money, the report found.

First she blamed Ntsele, saying he was “adamant” the money be paid into a Merit Energy account.

Then she claimed Ntsele wanted the money in an account he controlled first, so that he could subtract his commission in case the BBC could not pay him.

This, she claimed, was because of a rumour that the BBC owed Sars R5 million in unpaid payroll taxes.

The third version is the one Ntsele gave City Press last year: that he accidentally paid the money into the wrong account.

“It seems that both Dr Baloyi and Mr Ntsele were changing their versions at each turn,” the report found.

Ntsele’s claim that he was fund-raising from the airports company for two different clients “has been emphatically rejected by Acsa as completely untrue”.

NTSELE’S COMMISSION 

On January 12, Ntsele did pay the BBC R4.56 million, keeping R1.14 million for himself as his 20% fee.

The SKX report challenges this fee as it effectively appropriates the VAT and because there still is no written agreement between Ntsele and the BBC.

However, according to the report, “All interest in respect of this amount (overall payment of R5.7 Million), less VAT which would have been paid to SARS, should have accrued to the BBC and the payment made by Mr Ntsele in January 2018 has robbed the BBC of interest which must be computed from April 2017 to the date of deposit in January 2018.”

“Any actions by Mr Ntsele to access and retain funds for the BBC will not only be regarded as self-help but also an unlawful appropriation which amounts to theft,” the report found.

“Although Dr Baloyi suggested in her letter that the Treasurer-General had agreed to a 20% commission which she allegedly confirmed, the Treasurer-General emphatically denied any knowledge of this agreement.”

The report states that Merit Energy’s Bibi Hawa Khan “refused to cooperate with” SKX investigators. Ntsele also declined to be interviewed, refused to cooperate with the investigation and elected “not to furnish us with any information.” 

DISCIPLINARY ACTION 

The SKX report recommends that the BBC conduct a further investigation into where the money actually ended up after being paid to Merit Energy.

The report states that Baloyi should be dealt with through the BBC’s internal processes, and further recommends that the BBC take “disciplinary measures” against Merit Energy and Khan “as members of the BBC”.

The BBC’s secretary general George Sebulela had however, in December, denied that Khan was a member of the organisation.

CONCLUSION

In its conclusion, the report summed up the apparent collusion stating that “There is a clear tripartite relationship between Dr Baloyi, Ms Hawa Khan of Merit Energy and Mr Ntsele”.

BBC Secretary General, George Sebulela, who together with Chairperson Sello Rasethaba had earlier been tasked with looking into the matter by the National Executive Committee and submitted the preliminary report of the discrepancies, said he would only respond to questions on the matter after the national officer bearers (NOBs) have deliberated on it.

When contacted, Ntsele also opted not to comment and said: “I am not a member of the BBC and I haven’t seen the report. I don’t want to participate in anything that has to do with the reputation of the BBC because I know how important it is.”

Baloyi was not available to comment. City Press wasn’t able to reach Khan.

Sebulela said he would comment only after the national office bearers had examined the report.

Among the recommendations made in the 23-page report are that:

- the organisation deals, in terms of its Code of Conduct or principles, with the issue of apparent collusion to divert funds meant for the BBC and/or attempt theft, into another account by Dr Baloyi and her subsequent manoeuvres to conceal information regarding this sponsorship which indicate dishonest conduct. 

- a proper protocol regarding fundraising on behalf of the BBC be developed and adopted by the BBC Governance Structures.

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