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Cape Town - A director of a factory equipment supplier has explained how the bulk of R600 000 – which he borrowed from a friend – ended up in former top tax official Jonas Makwakwa's account.
And it involves an alleged scam around a fake tender for motor pumps.
Makwakwa then used R200 000 of this money as a deposit for a Mercedes-Benz for his partner Kelly-Ann Elskie.
The director's account of how the money was paid to Makwakwa is included in an affidavit, contained in a redacted version of the report that law firm Hogan Lovells compiled while it was investigating Makwakwa.
According to the redacted report, which Fin24 has, Biz Fire Worx director Precious Molea detailed how he approached his friend Peter Arnold, director for Arvomark and Clipper Financial Services, for money.
Molea says he initially borrowed the money to finance a tender he was pursuing, but when the tender turned out to be a scam, he used the money to settle a loan.
According to Molea, Biz Fire Worx, which he started with former chief executive for business and individual tax Makwakwa in 2009, was on the vendor list for the Department of Mineral Resources (DMR) when Molea was scammed in 2015.
In the affidavit, Molea says he received a request for 1 000 Duchen P09 pumps to be delivered to the Northern Cape after someone claiming to be from the Department of Mineral Works contacted him.
"My company is […] on the vendor list of suppliers of the Department of Mineral Resources. A few days later from the date of request for quotation I received [communication] that was on 26 February 2015 and I was given five days to deliver," Molea alleges.
He says he went to the banks to access money, but was told his request would take at least two weeks to process, leaving him pressed for time.
"I then approached a friend, Philip Arnold of Street Talk Trading 181, whom I have known for some time now, and he then offered to help.
"A few days later from the date of request he transferred R600 000, which was the amount requested on 1 March 2015," the affidavit reads.
According to Molea, after accessing the money, he drove to Cape Town to purchase pumps from a supplier and deliver them to Upington. When the supplier was not at the location in Cape Town and did not appear to plan on seeing him, he realised he had been conned and called the police.
He used the money to settle a loan for Makwakwa, he says.
"When I started my business in and around 2009 with my new partner Jonas Makwakwa as an indirect shareholder, he assisted in the business until 2012, when we registered Biz Fire Worx. Mr Makwakwa, who, however, resigned as a director in 2012, at this stage had a loan account of R550 000.
"So, because I had enough time to pay back Mr Arnold his R600 000, I decided to pay the existing loan, which was already four years outstanding. I paid R480 000 and still have R70 000 outstanding on the loan," the affidavit concludes.
Nine transfers, seven companies
In a PwC report within the Hogan Lovells report, PwC details in a schemata how money made its way from the Department of Water Affairs and Forestry (DWAF) all the way to Biz Fire Works, through a series of transactions, ultimately to Makwakwa. R200 000 eventually made its way to Mercedes Benz Financial Services in May 2015.
The money trail consisted of at least nine transfers between seven companies before it landed with Makwakwa, who used R200 000 of the R480 000 he eventually received to pay towards a Mercedes Benz for his partner Elskie.
The money landed in the accounts of New Integrated Credit Solutions and Patrick Monyeki's Mahube Payment Solutions twice.
SARS's Moyane told Parliament in April that Monyeki was a good friend of his, but insisted that his business involved with SARS was above board. NICS said it was cleared of all wrongdoing by SARS in a letter from the revenue service. The company said its business with the department was subject to a confidentiality agreement.
'No business with Molea'
Arnold is a director for Arvomark and Clipper Financial Services (CFS), two more businesses listed in the series of transactions involving R17.8m from the DWAF.
Arnold, however, told Fin24 that he did not loan any money to Molea in 2015, contrary to the claims in Molea’s affidavit.
"I have no business interests with Precious Molea. Precious, through Biz Fire Worx, is a supplier of fire repression services to companies in which I am a director," said Arnold.
Arnold does not supply goods and services to any government department or entity through Alteram, Clipper Financial Services (CFS) or Arvomark, he says.
"Clipper Financial Services has no contracts with government departments or entities.
"Arvomark has no contracts with government departments or entities.
"Alteram started trading in 2013," Arnold said.
He added that since inception to March 31, 2018, CFS had, however, provided services to Alteram in respect of goods and services it provided to government.
"Since inception to 31st March 2018, Arvomark has provided services to Alteram in respect of goods and services provided to Government totalling R2 147 387.35 excluding VAT.
"Since inception to 31st March 2018, Alteram has turned over R446 723 351 excluding VAT,” Arnold said.
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