Royal Security — founded by State Capture ‘kingpin’ Roy Moodley — bags R282m contract in DA-led Western Cape
Durban businessman Roy Moodley is associated with some of South Africa’s most egregious State Capture scandals. This hasn’t stopped the DA-led Western Cape provincial government from awarding a R282m contract to the controversial security firm Moodley founded.
A security company founded by controversial ANC-linked businessman Chockalingam “Roy” Moodley has won a R282-million security contract from the Western Cape Department of Infrastructure.
The contract awarded to Royal Security is for security services over a period of two years at immovable assets owned by the Western Cape provincial government.
A letter sent by the Department of Infrastructure to losing bidders, dated 1 June 2023, confirms Royal Security’s recent appointment.
According to a list of bids received by the department, no less than six rival bidders had submitted a lower bid price than Royal Security’s offer of R282-million.
The department told Daily Maverick that 10 of the 14 bids were disqualified because they did not meet the minimum score for functionality.
Among the four remaining bidders, Royal Security came out on top in terms of price and preference points, explained the department.
“The department follows a strict and thorough procurement process to ensure fairness and transparency when procuring goods and services,” the department stated.
The bid, according to tender records, was opened to prospective contractors on 21 April and had a closing date of 9 May.
Some of the losing bidders have expressed their shock and dismay over Royal Security’s appointment.
Speaking to Daily Maverick on condition of anonymity, one such bidder said he was surprised when he heard that “Zuma’s guy” had clinched such a lucrative contract in the Western Cape.
Another unsuccessful bidder said his firm was shocked when they learnt that “one of State Capture’s kingpins” had won the deal.
Western Cape Premier Alan Winde said he was “outraged at the possibility that the provincial government could be in a position of doing business with alleged profiteers of crime.”
“This is unacceptable and I will do everything in my power to end this practice,” vowed Winde.
According to the premier, the provincial government currently cannot bar entities like Royal Security from doing business with the province unless they’d been blacklisted by the National Treasury.
The politically connected Moodley founded Royal Security in the late 1980s. He resigned as a member of the closed corporation in 2015. Moodley’s son Magesh is listed as the entity’s sole member.
“I am the current owner of the company, and the questions arising from your email are inappropriate, misrepresentation of facts and can best be described as bizarre and most unbecoming of a journalist and author,” Magesh Moodley wrote in an email.
“It would appear that you are simply angling for a scoop to profiteer from the past allegations which are irrelevant to the current running of the company.”
Royal Security was a “lawful tenderer and [was] successfully awarded the contract based on our bid,” added Moodley.
“Should you persist with slandering my company any further, I will have no option but to engage my legal team personally against you and your newspaper that employs you and sue for any damages should any losses be incurred whatsoever due to your reckless statements.”
Moodley Snr could not be reached for comment. He did not respond to queries sent on WhatsApp.
Roy Moodley and some of the entities linked to him, including Royal Security, have been implicated in some of the foremost alleged State Capture schemes during the tenure of former president Jacob Zuma.
A simple desktop search would have pointed the Western Cape infrastructure department’s officials to a multitude of examples of such alleged grand corruption.
- This reporter in 2016 first revealed that Royal Security and another of Moodley’s businesses, Hail Way Trading, had pocketed a staggering R550-million in payments from Siyangena Technologies. This was after Siyangena had clinched contracts worth more than R4-billion from the Passenger Rail Agency of SA (Prasa). Moodley, allegedly one of Prasa’s principal captors in the era of disgraced former Prasa boss Lucky Montana, supposedly pocketed such payments in his role as the alleged gatekeeper of the SOE’s coffers.
- Another Prasa contractor, Prodigy Business Services, made questionable payments to Moodley’s Hail Way Trading after the former had won Prasa contracts worth more than R80-million.
- Moodley’s sway over Prasa allegedly stemmed from his relationship with Zuma, much as the Guptas’ influence over other SOEs resulted from that family’s ties to the former president. EFF leader Julius Malema, in 2014, first alleged that Zuma had once pocketed a secret salary from Moodley. The Zondo Commission later heard that Zuma had indeed banked a monthly “salary” of R64,000 from Royal Security. Some of these monthly payments were made after Zuma became president.
- In addition to the alleged kickbacks or rents from the likes of Siyangena Technology and Prodigy, the Moodley family clinched lucrative deals directly from Prasa. Shortly after Zuma became president, Royal Security bagged its first Prasa security contract and ended up earning more than R470-million from the state-owned rail operator, the commission was told. Strawberry Worx, founded by Moodley’s other son, Selvan, won lucrative billboard deals from Prasa.
Royal Security’s appointment in a DA-led province will no doubt be viewed with some irony. The party has been at the forefront of criticising the Zuma administration’s corruption scandals. This includes Moodley’s and Royal Security’s alleged transgressions.
In 2017, the then DA leader Mmusi Maimane accused Zuma of having breached the Executive Ethics Code by failing to declare his “salary” from Royal Security.
And in 2018, the then KwaZulu-Natal DA leader Zwakele Mncwango met with the Hawks to discuss concerns about contracts Royal Security had allegedly won from the eThekwini metro.
We asked the department whether it had considered the allegations levelled against Royal Security and Moodley, including those that were presented alongside documented evidence at the Zondo Commission.
We also wanted to know whether the company’s appointment didn’t make hypocrites of the Western Cape provincial government and the DA.
The department responded as follows: “Unfortunately, as unpalatable as it may be, the supply chain management processes do not allow a government institution to exclude an individual or organisation against whom only allegations of wrongdoing have been made, from bidding for government work, when those allegations have not been tested and confirmed through judicial processes. This flows from the most basic tenet of being ‘innocent until proven guilty’.”
It is not clear why the department does not view Zondo’s Judicial Commission of Inquiry into Allegations of State Capture as a judicial process.
“As part of the tender process, various checks are conducted to ensure that a company is able to deliver the requested goods or services,” said the department.
“This includes checking the entity’s compliance and registration information, including tax compliance, BEE status and Private Security Industry Regulatory Authority registration. In this instance, Royal Security passed through the various stages of the procurement process and offered the most competitive bidding price when compared to other bidders.
“Royal Security was also not found to be blacklisted or on any defaulters list, nor convicted of any unlawful activity.”
Winde, meanwhile, promised further action.
“We will be writing to the implicated company to raise our concerns about the allegations made regarding their practices and looking at other remedies available for us to deal with this glaring gap in the tender processes.” DM