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Deputy FinMin denies scoring Prasa tenders, DA to lay charges

Jun 06 2017 13:40

Cape Town - Deputy Minister of Finance Sfiso Buthelezi on Tuesday denied scoring tenders from the Passenger Rail Agency of South Africa (Prasa), while the Democratic Alliance said it will lay criminal charges against Buthelezi regarding the allegations.

On Sunday, News24 investigative journalist Pieter-Louis Myburgh reported that Buthelezi and his brother are beneficiaries of companies that secured contracts worth at least R150m from Prasa and some of its suppliers while Buthelezi was board chairperson of the troubled state-owned rail operator.

“News24 can reveal that Swifambo Rail Leasing, the supplier of Prasa’s controversial Afro 4000 locomotives, appointed Inala Shipping – a company 100% owned by Nkanyiso Buthelezi, the deputy minister’s brother – to manage the shipping and logistics for the importing of the trains,” reported News24.

FULL STORY: Deputy FinMin scored Prasa tenders as agency chair

Buthelezi "has never used his position as chairperson of the Prasa board to influence procurement decisions in favour of any company associated with him or his family”, National Treasury said in a statement on Tuesday.

“All organisations that the deputy minister has served have sound conflict of Interest policies that are meant to prevent the decision makers from influencing the outcome of transactions in a manner that leads to undue benefit for themselves or their connected persons. 

“In line with the conflict of interest polices of the boards and organisations that the deputy minister has served, he has always annually or biannually, in line with the policies, declared all companies where he was a director or shareholder.

“Secondly, all meetings have a standing agenda which calls for declaration of interest on the matters appearing on the agenda that day. If anything comes up, where a participant in the meeting sees something that may conflict him/her, there he/she must declare it.

“The meeting decides whether you continue in the meeting or not. Whenever the conflict is seen as material, the conflicted party would be recused from such decisions."

DA to press charges, to call Hawks to Parliament

Democratic Alliance MP Manny de Freitas said in a statement that it "appears to be blatant corruption, and we believe that criminal charges may be brought in this matter".

"In terms of the Prevention and Combatting of Corrupt Activities Act, Buthelezi may be guilty of some if not all of the following:

• The general offence of corruption, according to section 3 of the Act;
• An offence in respect of contracts, according to section 12 of the Act;
• An offence in respect of tenders, according to section 13 of the Act; and
• An offence relating to private interests in public contracts, according to section 17 of the Act."

"The DA will also write to the transport committee chairperson Dikeledi Magadzi to request that the Hawks appear before Parliament to update the committee on the progress of all the current investigations into Prasa," he said. "There are numerous criminal investigations outstanding, and it is high-time that the Hawks update Parliament."

"It is deeply concerning that prior to Buthelezi’s December 2014 resignation as the chairperson of the Prasa board, at the same time as Prasa’s first locomotives were delivered, these deals and contracts had been wrapped up," he said. "Therefore, while he held his position as Prasa chairman, he was a shareholder and director in firms that had an immediate interest in Prasa-linked contracts.

"The DA is anticipating bringing criminal charges against Buthelezi soon, to ensure that he is held to account, and we will push for an update on Prasa investigations until we get to the bottom of the decay at Prasa."

What Buthelezi told News24

Buthelezi said that in his response to the specific enquiries by News24's Myburgh on perceived conflict of interest while he served on Prasa’s board, he clarified the following:

  • “I was never the COO or Executive director of Sebenza
  • “I was a non-executive director at some stage at Sebenza and an executive at Makana (you may contact those entities for records of dates)
  • “I am one of 15 beneficiaries of Mboneni Trust, which is a 14.5% shareholder of Autshumatu
  • “I am also one of 9 shareholders of Sihayo Investments, which is a 22.5%shareholder in Autshumatu
  • “Autshumatu owns 18.5% of Makana investments Corporation
  • “Makana owns 55% of Sebenza
  • “I was never in a meeting that decided to award any work to Sebenza by Prasa
  • “I never influenced any decision to award work to Sebenza
  • “I received no personal gratification from any of the entities you have mentioned in your questions (Sebenza, Swifambo, Inala) in relation to any contracts they have had with Prasa directly or indirectly
  • “I played no role in the business relationships or transactions between Prasa, Swifambo, Sebenza or Inala.”

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