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The Mayor of Johannesburg, Geoffrey Makhubo. (Photo: Gallo Images / Deaan Vivier)
The regiments’ fund managers paid Johannesburg Mayor Geoff Makhubo’s company R35.7 million between 2008 and 2016 for a contract they won with the municipality, according to evidence presented to the Zondo Commission of Inquiry. Makhubo continued to mint it while at the Johannesburg Financial MMC, but denied having a conflict of interest.
Johannesburg Mayor Geoff Makhubo told State Capture’s investigation that he had no conflict of interest when he attended mayoral committee and council meetings like MMC Finance in 2015, to recommend the extension of a lucrative contract. with the regimental fund managers, from which Makhubo had been paid. millions.
“It’s a very wrong look and it’s wrong,” Makhubo said as test leader Matthew Chaskalson SC asked him about perceptions of conflict of interest.
The commission heard how the Regiments paid Makhubo’s company, Molelwane Consulting, R35.7 million between 2008 and 2016 and how parts of those payments were then transferred to Makhubo’s personal accounts, or to the ANC and its alliance partners.
The now mayor was elected Johannesburg City Councilor in 2011 and was appointed by then-Mayor Parks Tau as Financial MMC. He held office until the district attorney formed a coalition to take control of the city in 2016.
Makhubo, who also serves as the regional president of the Johannesburg ANC, was elected mayor in December 2019.
In 2006, before Makhubo was elected to any public office, Molelwane Consulting partnered with the regiments to tender a contract to manage the city’s “sinking fund,” an investment fund that the municipality had established to ensure that it could redeem the listed bonds. The consortium won the contract.
Under the agreement, Molelwane would take 10% of the administration fee and 10% of the superior performance fee, which the city would pay if the fund managers exceeded their targets.
Makhubo said he intended to resign from Molelwane, in which he owned a 67% stake, when he was elected in 2011, “but it never happened.”
The mayor has suggested that his attorney at that time did not submit his resignation to the Business and Intellectual Property Commission.
“He was more focused on dealing with the billing problems in the city of Johannesburg,” he told the commission on Friday.
But he admitted that he did not want to resign from Molelwane until an agreement was reached to reward him for his work in building the closed corporation.
“I didn’t want to give it away,” Makhubo said.
No such arrangement was ever found, so Makhubo continued to serve as a member of Molelwane and was its sole signatory while it was funding MMC.
Regiments-Molelwane’s contract with the city expired in 2011, which could have resolved Makhubo’s conflict of interest issues.
But the municipality had to award the second sinking fund contract to the regiments (Molelwane was not part of the new deal) and in 2012 rival bidder Colourfields went to court to stop the deal.
Delayed by court proceedings, the original contract with the Regiments was repeatedly extended and Molelwane continued to receive his 10%.
The regiments paid Molelwane R18.8 million between early 2011 and February 2016, most of which were while Makhubo was financing MMC. Around R5.9 million of that was transferred to Makhubo’s personal accounts and R850,000 was withdrawn in cash.
Makhubo said he was not actively involved in the company’s operations, but continued to monitor its finances and approve payments.
Chaskalson submitted an invoice from Molelwane to the Regiments from June 30, 2015 showing that the Regiments owed R993,000 in payments.
Less than a month later, the city council committee met to consider the Regiments’ offer for the second sinking fund contract, and on July 30, 2015, the city council met and approved the agreement with the company.
On August 28, 2015, the Regiments paid Molelwane almost R800,000. The following day, R500,000 was transferred from Molelwane to Makhubo’s personal account.
Chaskalson asked Makhubo if the payments and his participation in the mayoral committee and council meetings could be perceived as a conflict of interest. Makhubo said he did not see how the payments to his company could be linked to the decision to award the Regiments another contract.
“The way I see it here. I mean that an existing contract is being liquidated and it is being transferred to the second, pending funds are being finalized, ”said the mayor.
“It is a very wrong appearance and it is wrong,” he added.
The city of Johannesburg cut ties with the regiments in November 2018.
Cash withdrawals worth hundreds of thousands of rand were often made from the mayor’s or Molelwane’s accounts, which Makhubo said was regularly used to fund ANC comrades who came to him in trouble.
On Wednesday, the commission Heard how the technology company EOH made questionable payments to Makhubo’s company and donated millions to the ANC at his request while he was in Joburg funding MMC between 2014 and 2016. At the same time, the city awarded EOH contracts worth hundreds of millions .
Makhubo was to continue his testimony related to the Regiments on Friday afternoon before the former treasurer of the Compañía de Aeropuertos SA, Phetolo Ramosebudi, returns Follow giving his testimony about Regiments Capital, the parent company of Regiments Fund Managers. DM
Friday announcement: Supreme Court Vice President Raymond Zondo announced on Friday morning that he had instructed the commission clerk to press criminal charges against former SAA chairman Dudu Myeni for revealing the name of witness Mr.
