Just 48 hours into the job as interim CFO at SAA, Phumeza Nhantsi was handed a number for Dudu Myeni’s “personal adviser”, Masotsha Mngadi, then a senior Nedbank employee.
“Immediately when I joined, Dudu Myeni gave me his number and said he was an adviser and that if there were any questions, I should speak to him.
“This was about two days after I joined.”
Mngadi would make contact first. Later, he would actively drive a controversial R15-billion deal involving BNP Capital, a company that allegedly had close ties to Myeni.
The deal raised multiple red flags including governance failures, the presence of a mysterious Russian-linked funder across three different bids, one of which included the Free State Development Corporation.
Nhantsi, a chartered accountant seconded to SAA in November 2015, told the State Capture Commission that when she first asked former board member Yakhe Kwinana about Mngadi and his role at SAA, Kwinana allegedly said he was “Dudu’s person”.
Nhantsi has been severely implicated in testimony by former SAA treasurer Cynthia Stimpel over her role in a debt-consolidation deal that saw BNP Capital being appointed, first as a transaction adviser at R2.6-million, and later to arrange the R15-billion deal, allegedly at the steep price of R225-million.
In the end, following much public pressure and legal action by civic organisation Outa, the deal was cancelled, but not before Nhantsi motivated a cancellation fee to the board.
While she was repeatedly interrogated about why she had not sounded the alarm over the deal, Nhantsi’s testimony suggests that she had been subjected to severe pressure by both Myeni and Mngadi.
On 25 May 2016 when SAA sent a letter of award to BNP to source the R15-billion, BNP Capital acknowledged receipt thereof and then added a little bonus clause for a 50% payment of the total fees payable — within seven days. In the event, the deal was cancelled.
After BNP lost out on the big cash-raising deal, all efforts were seemingly focused on extracting a cancellation fee out of SAA.
Nhantsi thought the figure of R128-million was excessive and insisted on getting a legal opinion — and she wanted Myeni’s board to approve it.
Nhantsi testified that she had been put under enormous pressure between 2 June and 8 June when there were a lot of calls, some from Myeni allegedly telling her that she was behaving as if it was “business as usual”.
“I wasn’t only getting calls from Mr Mngadi. I was also getting calls from Ms Myeni.” While Nhantsi provided the commission with copies of Mngadi’s WhatsApp messages, she said she didn’t have any from Myeni — “the former chairperson allegedly once told me the reason nobody can find anything on her is because ‘she doesn’t write anything down’ ”.
On 2 June Nhantsi signed a non-binding term sheet and told BNP that the cancellation fee it sought required board approval.
But concerted efforts were seemingly being made to keep this away from the board.
Between Mngadi and Myeni, Nhantsi said, she would be bombarded with calls and WhatsApp messages — sometimes up to three times a day — about her reluctance to take charge and ensure the cancellation fee was signed off.
First Mngadi insisted she remove a “non-binding” safeguard in a term sheet she had signed.
“Sister, this letter you have sent means nothing, it is of no use to the funders, to me, to everyone.”
Nhantsi told the commission that she understood “everyone” to include Myeni.
The Commission was taken through a series of WhatsApp exchanges between her and Mngadi. In one of them, he said:
“We might as well have waited for you to get board approval for the cancellation clause.”
This, Nhantsi said, sounded like he had simply expected her to sign the term sheet and not to include the fact that it was a non-binding one.
On 3 June Mngadi sent her a message suggesting that he had had a hand in hiring her as CFO — she was permanently appointed to the post a few months into her secondment.
He allegedly told her that they had appointed her “to lead them”, and that there was no need to wait for sign-off from SAA’s legal department to approve the cancellation fee.
“I then called Ms Kwinana and told her this was not what I had signed up for.”
“Her (Kwinana’s) response was if you feel your integrity is going to be tarnished, don’t even walk away, run away.”
She insisted on taking the cancellation fee request to the board and Mngadi was not impressed. He allegedly wrote back:
“I thought you are part of our team. I apologise if I misunderstood, my apologies.”
Mngadi, allegedly a friend of Myeni’s son, Thalente Myeni, motivated for the cancellation fee, seemingly because he stood to gain from it, the commission heard.
Nhantsi confirmed that Mngadi generally appeared to have knowledge of board matters as he would refer to matters that Myeni had approved.
He sent her an email on 8 Jun 2016, saying:
“You have been chosen to lead SAA, to lead us. I have faith in you to please demonstrate your leadership qualities. You take decisions, not legal.”
Asked if she was concerned about Mngadi’s relationship with Myeni, Nhantsi said she was, and used to ask the former CEO, Musa Zwane, about it at times.
“I understood that he was working with Ms Myeni.”
Asked why she didn’t sound the alarm, Nhantsi said SAA was her first corporate job. She was not familiar with the processes.
As Nhantsi persistently emphasised her concerns about the size of the cancellation fee, the figure later dropped substantially. This was after Myeni allegedly asked Zwane what amount he could sign off on. He told her that his limit was under R50-million.
As a result, said Nhantsi, BNP “miraculously” dropped their cancellation fee to R49.9-million, just enough to be within Zwane’s signing powers.
This, Nhantsi says, was suspicious because the company could not justify its initial R128-million cancellation fee, but then it went down to R49.9-million.
“We knew Ms Myeni was behind it. She had called him (Zwane). She wanted to make sure the transaction didn’t go to the board.”
But Nhantsi insisted on taking this deal to the board and called two out of Myeni’s three-member board to explain her concerns prior to the memo landing up with them.
“I told Ms Kwinana I was scared to push this thing further. The chair had been calling me day and night.”
Kwinana and Zwane voted against it, Dr John Tambi abstained and so did Nhantsi.
Myeni was the lone board member to approve the cancellation fee to BNP Capital. DM
In other news...
South Africa is in a very real battle. A political fight where terms such as truth and democracy can seem more of a suggestion as opposed to a necessity.
On one side of the battle are those openly willing to undermine the sovereignty of a democratic society, completely disregarding the weight and power of the oaths declared when they took office. If their mission was to decrease society’s trust in government - mission accomplished.
And on the other side are those who believe in the ethos of a country whose constitution was once declared the most progressive in the world. The hope that truth, justice and accountability in politics, business and society is not simply fairy tale dust sprinkled in great electoral speeches; but rather a cause that needs to be intentionally acted upon every day.
However, it would be an offensive oversight not to acknowledge that right there on the front lines, alongside whistleblowers and civil society, stand the journalists. Armed with only their determination to inform society and defend the truth, caught in the crossfire of shots fired from both sides.
If you believe in supporting the cause and the work of Daily Maverick then take your position on the battleground and sign up to Maverick Insider today.
For whatever amount you choose, you can support Daily Maverick and it only takes a minute.
"You at this time can only be destroyed by yourselves from within and not from without. You have reached the point where the victory is to be won from within and can only be lost from within." ~ Marcus Garvey