The other Vrede scandal: Zuma Inc’s cash flows from Free State RDP housing project 

Former president Jacob Zuma and former South African Airways chairperson Dudu Myeni at the International Convention Centre in Durban on 4 October 2014. (Photo: GCIS)

Two Jacob Zuma non-profit organisations scored money from a company tasked with building low-cost houses in Ace Magashule’s Free State. 

Payments to the Sizakele Zuma Foundation in 2014 from a contractor involved in a R100-million housing project in the Free State raise fresh questions about cash flows between businesses involved in lucrative state projects and the Zuma family’s charitable foundations. 

The Sizakele Zuma Foundation was headed by former president Jacob Zuma’s eldest wife, Sizakele “MaKhumalo”.

Scorpio can reveal that Durban businessman Vikash Narsai’s* VNA Consulting had transferred R250,000 to the non-profit on the same day that Narsai’s company received a R17-million upfront payment for building 1,000 low-cost houses in Vrede. 

In all, the Sizakele Zuma Foundation received nearly R345,000 in payments directly linked to the housing deal.

There are also questions over much larger payments totalling more than R6-million that VNA Consulting had made to two businesses on the back of invoices bearing the name of one of the Sizakele Zuma Foundation’s directors.

These details are contained in court documents and accompanying financial records. 

Thanks to the Zondo Commission’s first report, we now also know that another Zuma non-profit, the Jacob G Zuma Foundation, in 2015 received R1.8-million that can be “traced” to Narsai’s VNA Consulting.

Despite the large upfront payment from the Free State provincial government, VNA Consulting and its partners allegedly failed to deliver on their mandate amid claims that a large portion of the money had been misappropriated.

This journalist’s 2019 book, Gangster State, first examined allegations of a so-called thank you fee paid to former president Zuma in relation to the RDP project.

Sources familiar with the housing development had alleged that then Free State Premier Ace Magashule ensured that some of the proceeds from the provincial contract reached Zuma.

We are yet to obtain documentary evidence proving that Zuma and Magashule were involved in the alleged scheme, but we can now report with certainty that the Sizakele Zuma Foundation received some of the proceeds of the Vrede housing project via VNA Consulting.

Vrede’s Thembalihle township in 2018. This man, who didn’t want his face in the photo, explained that his grandmother’s house should have stood on the empty concrete slab behind him, but the house was never built. (Photo: Pieter-Louis Myburgh)

Money upfront

The relevant financial details are contained in a 2015 civil lawsuit, which has since been withdrawn.

It is not clear whether, or on what basis, the respective parties had settled their differences out of court. 

Durban-based construction firm Tekeweni Civils, VNA Consulting’s former consortium partner for the housing project, had taken VNA to court. 

The dispute revolved around an advance payment of R22.5-million that the Free State’s housing department had made to Tekeweni in May 2014. 

Tekeweni had subsequently transferred R17.1-million to VNA Consulting.

“This payment was to be utilised for setting up, establishing the sites, purchasing the necessary materials to get the job started and for the development of the initial 100 homes,” reads an affidavit by Selvan Moodley, Tekeweni’s co-owner. 

VNA Consulting, Tekeweni and another consortium partner had been tasked to build 1,000 low-cost houses in Vrede’s Thembalihle township.

But Moodley quickly became concerned about the “pace at which the development was moving”. 

He later confronted Narsai about the R17.1-million paid to VNA Consulting, seeing as “no materials were delivered to the site”, according to Moodley’s affidavit. 

After he had hounded an “evasive” Narsai for answers, Narsai in September 2015 sent Moodley a “Vrede Project Cost Breakdown”.

This was more than a year after the upfront payment from the Free State’s Department of Human Settlements, and there had been very few completed houses to show for the money.

Narsai’s cost breakdown was intended to allay Moodley’s fears that VNA Consulting had squandered the money, but it only raised more red flags.

The document showed that VNA Consulting had incurred what it referred to as “expenses” totalling R20.6-million.

The cost breakdown Vikash Narsai submitted in the court case.

This consisted of payments to an array of sub-contractors and supposed “suppliers”, as well as VNA Consulting’s own costs. 

Among the “suppliers” Narsai had included in his list was the “Sizakeke [sic] Zuma Foundation”, which had supposedly received R344,900 in three instalments. 

An email included in the court filings shows that the foundation’s director, Nozipho Maureen Mlotshwa, had contacted Narsai in February 2014.

Mlotshwa has also previously been listed as a contact person for the Jacob Zuma RDP Education Trust.

The email from Mlotshwa came roughly one month after VNA Consulting and its consortium partners had signed an agreement for the Vrede project.  

“Amount to be paid R33,500 adding R11,400 for the two family funerals, total of R44,900,” reads Mlotshwa’s email.

Narsai promptly transferred R44,900 to the foundation from VNA Consulting’s account, according to bank records.

In May 2014, Narsai again paid the foundation, this time with money that emanated directly from the Vrede housing project.

VNA Consulting’s founder and CEO, Vikash Narsai. (Photo: Supplied)

Tekeweni Civils received the R22.5-million upfront payment from the Free State provincial government on 12 May.  

That same day, Tekeweni transferred R17.1-million to VNA Consulting. 

VNA Consulting then transferred R250,000 to the Sizakele Zuma Foundation, also on 12 May.

Narsai had labelled these payments as “donations”, according to the bank records.

The following day, VNA Consulting paid R50,000 into Mlotshwa’s personal account, under the transaction description “N Mlotshwa Consulting Fees 1”. 

In his “cost breakdown”, Narsai included this last figure in the total for all payments he had made to the Sizakele Zuma Foundation, even though the money went to Mlotshwa’s own account.

Mlotshwa, who hails from the Nkandla area, told Scorpio that her mother was related to “MaKhumalo” Zuma. 

She said she had urged Zuma’s wife to establish the foundation in 2013, after community members had constantly come knocking on the first lady’s door at the Nkandla homestead to ask for financial assistance.

“I was the one who approached Vikash [Narsai] for a contribution to the foundation. MaKhumalo didn’t know about it, and I was not aware that the money was coming from a housing project in Vrede,” she told us. 

The R250,000 went towards school uniforms for children from a local primary school in the Nkandla area, said Mlotshwa.

Then-president Zuma had accompanied his wife at the handover ceremony held at the school, added Mlotshwa.

“He [Zuma] didn’t want MaKhumalo to do it alone, because she was not good with handling the media and those kinds of things,” explained Mlotshwa. 

The R50,000 VNA Consulting had paid into her own account was for other expenses related to the foundation, while the R44,900 payment covered the funeral costs for two Nkandla locals who had died in a car accident.

“The families of the deceased had asked MaKhumalo for financial assistance,” explained Mlotshwa.

R6-million for ‘sub-contractors’

The payments to the Sizakele Zuma Foundation were small compared with those made to a closed corporation called South West Consulting and to a company called M Sandy Contractors.

These payments caught our attention, seeing as they were made on the back of invoices bearing the name of the foundation’s director, Mlotshwa.

In total, VNA Consulting had transferred R3.75-million to South West and R2.3-million to M Sandy Contractors.

The payments to both companies were directly linked to the Vrede housing project, as evidenced by Narsai’s cost breakdown and the businesses’ respective invoices.

According to South West’s invoices, it had delivered “sub-contract consulting” for the Vrede project.

The description on M Sandy Contractor’s invoices read “Free State Dept. of Human Settlements”. 

Both sets of invoices included Mlotshwa’s name as the reference person, even though she is not listed as a director or member of either business. 

Mlotshwa said she did not know why her name appeared on the invoices.

She had been dating Sandile Langa, the director of M Sandy Contractors, she told us.

According to Mlotshwa, it was Langa who had introduced her to Narsai after she had asked her boyfriend if he knew any businesspeople who might donate money to the Sizakele Zuma Foundation.

She said she didn’t know that Langa’s company had received R2.3-million from VNA Consulting.

South West R2.6-million invoice.
M Sandy Contractors invoice.

According to Mlotshwa, South West Consulting’s owner, Viwe Mathimba, was a contact of Langa.

She didn’t know why Mathimba’s business had received R3.75-million from VNA Consulting.

Mathimba appears to have read a Whatsapp message requesting comment, but he did not respond. 

We got hold of Langa on his cellphone. He said he was in a Zoom meeting and vowed to call back later. He never did.

In his answering affidavit in the civil case, Narsai made no attempt to explain why the Sizakele Zuma Foundation had been paid as a so-called supplier. 

However, he offered a somewhat startling explanation for the role M Sandy Contractors and South West Consulting played in the affair. 

The two entities’ “services were required to enable the [Vrede housing] contract to be procured”, Narsai had stated. 

Scorpio sought a better understanding from Narsai as to how one might “procure” a government contract.

We also wanted to know why exactly VNA Consulting had paid the Sizakele Zuma Foundation, South West Consulting and M Sandy Contractors. 

Narsai chose not to directly address any of these substantive issues.

“In the circumstances, our clients respectfully decline to respond any further than they have done from 2019 onwards to your enquiries,” Narsai’s lawyer wrote in a letter. 

“[Narsai and VNA Consulting] have made it clear that they will incorporate [sic] with an authorised investigating authority and the National Prosecuting Authority and stand by that commitment…” reads the letter. 

“The fact that our clients adopt the afore-going approach is not to be construed by yourself, the Daily Maverick or any other person or entity as being an admission of the correctness of what you enquire about or that our clients do not have proper answers or explanations, which will exonerate them entirely,” added Narsai’s lawyer.

Read the full response from Narsai’s attorney here.

Narsai, the Myenis and ‘Mr X’

Gangster State examined a R2-million payment from Narsai’s VNA Consulting to a business owned by the son of Dudu Myeni, a well-known ally of former president Zuma. 

Three years on, Part 1 of the State Capture Commission’s report has delivered astounding findings in this regard. 

The commission’s forensic investigators had traced the R2-million and determined the following: 

In October 2015, after Premier Attraction had received the payment from VNA Consulting, Thalente Myeni’s company started making substantial transfers to a business owned by “Mr X”, the anonymous witness who had testified about his dealings with Dudu Myeni. 

In all, Mr X’s company had received about R3-million from Myeni’s business. This means Premier Attraction must have had other sources of income apart from the R2-million it had received from VNA Consulting. 

On two occasions after Mr X’s company had been paid by Myeni’s Premier Attraction, Mr X forwarded the bulk of the money to the Jacob G Zuma Foundation. 

He told the Zondo Commission that this was done on Dudu Myeni’s instruction. At the time, Myeni was the foundation’s chairperson.

On 11 December 2015, Premier Attraction paid R1.15-million to Mr X’s company.

That very same day, Mr X paid R1-million to the Jacob G Zuma Foundation.

On 2 February 2016, Premier Attraction paid exactly R1-million to the company owned by Mr X. 

Two days later, Mr X paid R800,000 to the former president’s foundation.

The 2015 payments.

The Zondo Commission seems certain that these payments all emanate from the Vrede housing project. 

“The Commission traced the money that Mr X had received from Mr Thalente Myeni’s business, to a R2-million payment from VNA Consulting. VNA Consulting had been involved in a housing project in the Free State Province and had used some of the monies it received on that project to pay Mr Myeni’s business, Premier Attraction,” reads the report.

“So, the money appears to have originated from the Free State government’s coffers, been paid to VNA Consulting, then to Mr Myeni’s business ‘Premier Attraction’, then to Mr X’s company’s bank account, and then, on instruction by Ms Myeni, into the bank account for the Jacob Zuma Foundation,” according to the commission’s findings.

The report recommended further investigation into these cash flows. 

“It is clear from that statement that the commission made no findings of its own as to whether there was a corrupt relationship and required the matter to be investigated to ascertain whether the same existed or not,” countered Narsai’s attorney.  

Dudu and Thalenthe Myeni both ignored our requests for comment. 

Speaking on behalf of the Jacob G Zuma Foundation, Mzwanele Manyi said the State Capture report did not contain any evidence of the payments made to the foundation.

 “[I] cannot respond without you backing up your allegations. The ball is firmly in your court,” said Manyi.

Regarding the 1,000 houses in Vrede, only 166 had been completed by November 2018.

The Free State Department of Human Settlements eventually appointed another contractor to finish the job, despite the large prepayment that had found its way to VNA Consulting. DM

*Vikash Narsai and his company in 2019 instituted legal proceedings against Pieter-Louis Myburgh and Penguin Random House, the publisher of Gangster State. Narsai and VNA Consulting allege that the relevant chapter is defamatory and are seeking R10-million in damages. The case is ongoing in the high court in Durban. 

This story first appeared in our weekly Daily Maverick 168 newspaper which is available for R25 at Pick n Pay, Exclusive Books and airport bookstores. For your nearest stockist, please click here.



Comments - share your knowledge and experience

Please note you must be a Maverick Insider to comment. Sign up here or sign in if you are already an Insider.

Everybody has an opinion but not everyone has the knowledge and the experience to contribute meaningfully to a discussion. That’s what we want from our members. Help us learn with your expertise and insights on articles that we publish. We encourage different, respectful viewpoints to further our understanding of the world. View our comments policy here.

All Comments 13

  • One has to laugh these Africans complain about Indians but they seem to have no problem giving them tenders or taking instructions from a Gupta.

    • She must be the most useless/inefficient person in SA right now.
      With all the mountains of evidence that just keeps on piling up and piling up, I cannot believe that she does not have a single high profile prosecution.

      Also, I believe their whole approach to this is completely flawed.
      They want to take an individual and find EVERYTHING that he did wrong and build a complete case. Some of these criminals, like Zuma have such a long list that this will never happen. More and more gets discovered every day… this article case in point.
      They should take a slam dunk case, prosecute him for that, and get him in jail.
      Then they can take their time to add more charges.
      You eat a fat-cat (ANC) elephant one spoon at a time.

      She is either extremely bad at her job or her bosses are giving go-slow instructions. I suspect it might be both.

      • Batohi (n.) the sound of a whistle blown at a pitch only watchdogs can hear
        Shamila (adj.) bright, shiny, clean, daybreak, as in Shamila Dawn, an attractive update on a 36 month contract you’ve waited to expire, refurbished, renovated, renewed, recycled

  • It seems that we’re going to be in a never ending cycle of malfeasance. Every single government contract is tainted in some way or another and this will continue until some big fish are prosecuted because they provide the political cover.

  • And known Ace Mageshule associate, Hantsi Matseke, former Free State Dev. Agency Chairperson, was made Alexkor chairperson at the height of state capture at Alexkor.

  • Are there no regulations defining the establishment of a so called foundation. Is there no institution
    in SA charged with monitoring the operation of these foundations? One gets the impression that many of them are csh cows for the unscrupulous.

  • So what ? there is no follow through, even with all this evidence, the NPA is seemingly not acting on any of it. Meanwhile they all are super rich while the locals starve!….and still riot in their names! No hope here. ANC have to be voted out otherwise it will just go down the tubes. Even the kruger park is being left to rot!

  • Please peer review 3 community comments before your comment can be posted