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18 August 2017 12:56 (South Africa)
South Africa

amaBhungane: The minister, the middleman, the mansion and the new corporate kid

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Main photo: Social Development Minister Bathabile Dlamini (GCIS)

A new player in the Sassa saga is snuggling up to Social Development Minister Bathabile Dlamini’s confidant. By Craig McKune for AMABHUNGANE.

A shadowy middleman who connects Social Development Minister Bathabile Dlamini to grants contractor Cash Paymaster Services (CPS) has been living in a R65-million mansion courtesy of two directors from JSE-listed group EOH.

EOH, meanwhile, has scored at least R300-million in social development IT contracts and is positioning itself to become a central player in a future social grants distribution system.

The shadowy middleman is Lunga Ncwana, who once channelled late fraudster Brett Kebble’s millions to the ANC.

amaBhungane previously revealed that Ncwana is in regular contact with minister Dlamini and is best friends with CPS’s BEE partner Brian Mosehla. CPS’s parent company, NET 1, handed Mosehla R83-million in cash in 2014, apparently in return for nothing.

Now Ncwana’s links to EOH underline concerns that he might be using his proximity to Dlamini to influence her decisions in favour of private businesses.

A number of officials have already claimed he whispers instructions into Dlamini’s ear.

Recently, South African Social Security Agency (Sassa) CEO Thokozani Magwaza and former social development director-general Zane Dangor said that Dlamini created a “parallel governance structure” by hiring outside consultants.

These so-called “work streams” reported directly to her, bypassing Sassa officials.

Dangor, who resigned over the disagreement, and Magwaza submitted sworn affidavits to the Constitutional Court blaming Dlamini and her work streams for the grants payment crisis and disputing Dlamini’s version, which pointed the finger at Sassa officials.

While Dangor, national Treasury and others wanted future grants to be paid using commercial banks and the Post Office, Dlamini has pushed for a proprietary system, which would appear to favour private technology firms like EOH.

EOH is one of several bidders that have already made proposals to Sassa for a proprietary payment system.

None of EOH, Ncwana, Dlamini or Sassa responded to amaBhungane’s questions.

The fabulous Mr Mackay

EOH is an exciting IT firm. Of its peers, it has the highest broad-based black economic empowerment rating and has grown exponentially over the past decade, mostly by gobbling up smaller companies. It earned R12.7-billion last year.

One of the firms it bought was owned by father and son Danny and Jehan Mackay. Danny was given a seat on EOH’s board and Jehan was appointed as an EOH executive. They took a 5% stake in EOH.

Jehan Mackay’s job was to get EOH more government contracts.

One of his early successes was an R11-million contract with Sassa, migrating it from one IT system to another. EOH also picked up numerous contracts with other state institutions.

By early 2016, Sassa had awarded EOH contracts worth R300-million, Dlamini disclosed in Parliament last month. According to one person, EOH employees occupied most of a floor at Sassa’s Pretoria headquarters.

Early this year, EOH responded to Sassa’s “request for information” from companies that wanted to distribute social grants for Sassa in future. EOH company material suggests it hopes to be a key player in this business. It also bid for a Sassa biometric verification tender, which will be central to the future grant payout system.

The Mackays, who started their IT business in 2000, appear to have made a lot of money.

From 2014, they snapped up a handful of luxurious Atlantic seaboard and Sandhurst homes, each worth between R65-million and R111-million.

The most expensive of their properties is known as “The Pentagon”. The designer mansion has unbeatable views of Cape Town’s Atlantic Ocean and the Twelve Apostles, and the Mackays have claimed that they can rent it out over the festive season for R150,000 a day.

One person who knows Jehan says he lets South African “leaders” stay at their houses. This might grease the wheels of doing business, the person suggested. One of these “leaders”, amaBhungane has confirmed, is Bathabile Dlamini’s good friend Ncwana.

In June last year, Jehan married the popular South African fashionista and model Sarah Langa-Heaton at a “traditional” wedding in Johannesburg. In December they followed it with a “white” wedding.

A “who's-who of Johannesburg's social scene” reportedly attended the ceremonies. AmaBhungane identified two of them – Dlamini’s friend Ncwana and his best friend Brian Mosehla, CPS’s BEE partner.

They appear to be present in one wedding photograph, and a number of people who know them confirmed it was them:

That contract

In 2012, Sassa awarded CPS the first ever five-year contract for one company to distribute social grants throughout the country.

But the tender has been dogged by allegations of corruption, and Sassa so badly botched it that, in 2013, the Constitutional Court ruled that CPS’s contract was invalid.

To ensure that grant payments were not interrupted, however, the court allowed CPS to keep its contract until it expired at the end of last month. Sassa promised the court it would take over the grant payments itself from April 1.

However, Sassa and Dlamini did very little and by late last year it was obvious they had no viable plan to pay grants without CPS.

Former social development director-general Dangor and others have accused Dlamini of causing a “self-created emergency” to ensure that CPS got to keep its contract.

Things came to a head last month and the Constitutional Court ordered that, with no other choice, CPS’s invalid contract should be extended by a year.

It will soon consider whether Dlamini should be held personally responsible for the mess.

Dlamini’s shadow

Late last year amaBhungane exposed how, in CPS’s bid for the 2012 Sassa contract, it tendered a BEE partnership that was little more than an empty front featuring two of Ncwana’s friends.

A number of officials, politicians and businesspeople have alleged that Ncwana often met and travelled with minister Dlamini and that he advised her on official Sassa decisions.

But CPS quietly shelved its initial BEE partnership and signed on Ncwana’s friend and business partner Mosehla as its new BEE partner. In the process, CPS’s parent NET 1 paid R83-million into Mosehla’s personal bank account; the proceeds of a convoluted BEE deal. Dividends presumably still flow.

Mosehla was Ncwana’s best man when the latter also married a model.

Like Jehan Mackay, Ncwana’s wedding attracted a “who’s-who” crowd. This one included minister Dlamini and president Jacob Zuma’s lawyer Michael Hulley.

For his part, Hulley has also featured at numerous suspicious moments in Sassa’s tortured relationship with CPS.

Dlamini would not comment on her and Ncwana’s relationship when approached by amaBhungane late last year.

A playboy’s pad

At the same time in late 2016, amaBhungane tracked down Ncwana to the exclusive suburb of Fresnaye, Cape Town, where he lived with his wife Rosette, nestled against the band of eucalyptus trees that skirts Signal Hill.

Marketing images online – the house was recently advertised to be sold for R75-million – show huge west-facing windows, wide open decks, what looks like a dance floor and a perfectly trimmed pitch of green grass flanked by a long L-shaped pool. It all overlooks Sea Point, Green Point and Robben Island.

Asked to discuss his relationship with minister Dlamini, Ncwana told amaBhungane to “fuck off” and had two men escort the reporter to his car.

Deed records showed that the property was owned by Tactical Property Investments. Its directors are Danny and Jehan Mackay of EOH.

And it just so happened that one week earlier, amaBhungane had been tipped off that Ncwana was working for EOH, helping it to get government contracts – an allegation that has since been repeated by others in the know.

They told amaBhungane that Ncwana had boasted he “owned” the Fresnaye house, even though it was registered to the Mackays’ company, which bought it for R64.8-million in 2014.

However, after amaBhungane exposed Dlamini, Ncwana and CPS’s relationship, there was heavy public scrutiny and – for one reason or another – the Mackays booted the Ncwanas from their palace last month. They then sold it to Sol Kerzner’s son.

Nevertheless, Ncwana is alleged to have stayed in the property for roughly 15 months without paying rent, an indulgence from the MacKays worth millions.

That would seem an unnecessary expense for Ncwana, who owns a perfectly respectable R28-million pad in Bishopscourt.

This week, amaBhungane e-mailed Jehan Mackay detailed questions. He sent a text message later, saying: “Got it … this issue has been a thorn in my side.” He inserted a see-no-evil monkey-face emoji and continued: “Happy to chat later... will call soon as I'm available.”

He ignored all further calls, e-mails and text messages. 

After initial publication, EOH provided the following response:

EOH has noted a media article carried by amaBhungane on 13 April 2017, making mention of false and unfounded insinuations relating to EOH. We would like to place the following facts on record:

  • EOH is not and has never been involved, in any way whatsoever, in the social grant payment contract between the South African Social Security Agency (SASSA) and Cash Paymaster Services (CPS), a subsidiary of NET1.

  • EOH has no intention of getting involved in the future, in the distribution and payment of social grants for SASSA.

  • All EOH’s current and previous services provided to SASSA have no relevance whatsoever, to the payment or distribution of social grants.

  • EOH has been a service provider to SASSA for 8 years, and proud of its track record and quality, depth of skills and expertise it provides; all services provided to SASSA were awarded on merit, after having undergone open and transparent tender processes in compliance with the Public Finance Management Act (PFMA).

  • EOH has no relationship, and has not had any relationship whatsoever with Mr Lunga Ncwana, a person mentioned in the article, and he has never worked for EOH.

About EOH

  • EOH is a proudly South African business and the largest technology services organization in Africa. The JSE-listed group has strong empowerment credentials and with its 12,500-strong workforce is characterised by excellent delivery capability, great people and a strong culture.

  • EOH is guided by its long-stated purpose which is: 
“To provide the technology, knowledge, skills and organisational ability critical to development and growth of the societies we operate in. We are an ethical, relevant force for good and we strive to play a positive role in our society, beyond normal business practise”.

  • EOH provides a broad range of technology solutions and innovation to clients in South Africa and internationally, covering many aspects of society and the economy, and geared towards supporting the developmental agenda our country.

  • EOH operates across a diversity of industry verticals with about eighty percent of its revenues coming from the private sector, and the rest from the public sector.

  • In keeping with its purpose, EOH launched the “EOH Youth Job Creation Initiative” five years ago, which to date, has resulted in the creation of over 20,000 jobs for our youth.

  • EOH’s track record, reputation and integrity have been impeccable since inception nineteen years ago.

  • EOH supports a free press as one of underpinning the tenets of an open democracy and similarly call on journalists to exercise due care when reporting. DM

Main photo: Social Development Minister Bathabile Dlamini (GCIS)

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