The Hawks are investigating a case of corruption and money laundering implicating the Police and Prisons Civil Rights Union (Popcru) treasurer, Thulani Nsele, and former prisons commissioner and notorious Popcru enabler Khulekani Sithole.

• On 18 May 2021, a company controlled by Sithole issued an invoice for R10,850,000 to Popcru for the supply of year planners and notebooks. The money was paid in three tranches beginning on 19 May 2021;
• On 23 July 2021, Sithole’s company paid R112,112.50 for a BMW motorbike purchased by Nsele and subsequently registered in his name. In September 2021, Sithole’s company also made two payments totalling R1.15-million into a lawyer’s trust account for a house Nsele was buying.
• Nsele says he’s done nothing wrong and that the payments were loans. Popcru is backing him up and launched a failed attempt to interdict the Hawks from examining documents seized during their raid on Popcru’s office last month. The union claims the investigation is aimed at influencing its elective congress, which starts on Monday, 6 November.

The investigation arose from a criminal complaint lodged by Willem Petrus Venter in his capacity as the operational coordinator at the Financial Intelligence Centre (FIC).

The allegations first emerged publicly regarding a preservation order for R1.15-million obtained in the Mbombela High Court, as reported in Business Day, but are further detailed in court papers flowing from Popcru’s failed attempt to interdict the Hawks from accessing material seized in a 17 October raid on Popcru House in Johannesburg.

Popcru’s general secretary, Jeff Dladla, filed the urgent application on 21 October on behalf of himself, Nsele, the union and its sitting president, Zizamele Cebekhulu, but it was dismissed with costs on 27 October.

The papers show that the FIC was alerted by a regulatory report from an “Accountable Institution”, which flagged a payment of R1,150,000 sourced by Nsele for the purchase of a house. The money had been paid into an attorney’s trust account by Moribo Wa Africa 32, a company whose sole director was Sithole.

Sithole served as Department of Correctional Services (DCS) commissioner from 1997 to 1999, resigning after Parliament’s Standing Committee on Public Accounts dubbed him unfit to hold office. Sithole was also identified by the Jali Commission report as one of the masterminds behind the virtual capture of the DCS by Popcru under his tenure.

According to an affidavit by Captain Mphofa Magetse of the Hawks’ Serious Corruption Investigation division, Nsele indicated to the attorneys that he instead wanted to purchase the property in the name of his company.

He was requested to provide his company’s “Know Your Client” (KYC) documentation, which he failed to do.

Nsele then requested that the property be purchased and registered in his girlfriend’s name.

The regulatory report indicates the property purchase transaction was cancelled. The purchase amount was to be refunded to Nsele, but he would not allow the money to be paid into his account, instead wanting the money to be refunded to Moribo Wa Africa.

The “Accountable Institution” therefore refused to refund the R1,150,000 and alerted the FIC to the suspicious transactions.

The FIC conducted a preliminary investigation that revealed the following transactions in the Moribo Wa Africa account:

The Moribo Wa Africa account reflects an EFT payment on 23 July 2021 for the amount of R112,112.50, with the reference “Bike-Thulani Delivery”, to a Nedbank account number, as well as two payments into the property transfer attorney’s trust account.

The first payment was on 17 September 2021 — an amount of R650,000, with the depositor reflected as K Sitole (sic) on the proof of payment. The balance of R500,000 was paid on 20 September 2021.

Magetse said in her affidavit that a statement obtained from Atlantis Motors trading as Honda Wing Centurion notes that a BMW R1200 motorcycle was sold to Nsele by Honda Wing Centurion on 23 July 2021.

She said that Ruan van Heerden, a director of the conveyancing firm, made a statement to the effect that on or about 19 August 2021, Nsele entered into an agreement of sale and that the purchase price was paid directly into the firm’s trust account in two tranches during September 2021.

“Mr Ruan van Heerden further states that on or about 1 October 2021, after securing the purchase price, Mr Nsele requested that the existing agreement be cancelled and a new agreement be signed between the estates and a company of which Mr Nsele was a director. That request was never concluded as the company details were not forthcoming.”

She added that on 27 October 2021, Van Heerden received a further request from the estate agent, on behalf of Nsele, to cancel the existing agreement and enter into a new agreement on behalf of Nozipho Felicia Kunene.

The cancellation agreement was prepared and signed by Nsele at Secunda on 3 November 2021.

Magetse said the attorneys requested banking details from Nsele in his personal name via telephone, WhatsApp messages, emails and with assistance from the estate agent to enable them to refund the purchase price held in trust.

The banking details were not forthcoming, apart from the banking details that were provided by the estate agent in the name of Moribo Wa Africa.

Magetse stated that the attorneys refused to refund Moribo Wa Africa as Nsele was neither a director nor did he (Nsele) provide them with a written instruction to refund.

Nsele’s version

In an affidavit in support of Popcru’s attempt to quash the search warrant, Nsele set out his version of these events, denying that he was involved in any corruption or money laundering.

He explained that he had a young child out of wedlock with Nozipho Felicia Kunene. The child was five years old in 2021.

“I have always been concerned with my son’s and Nozipho’s unsatisfactory living conditions. For this reason, I occasionally searched for properties on sale with the hope that, when I retire in January 2022, I will buy one.

“Around April 2021, I saw a house on sale that I was interested in… The need to secure my son a decent living environment, coupled with guilt, increased daily. To top it all, I was undergoing a divorce and the settlement agreement with my estranged wife did not make provisions for my son with Nozipho. This situation troubled me even more.

“The first challenge was that I did not have the disposable funds at the time to buy it; and the second was that even if I had the necessary funds, I was not about to purchase property in my name that could potentially create a dispute during my divorce.

“I decided to speak to Prof Khulekani Sithole, whom I have known since 1996 as a Commissioner of Correctional Services and a former member of Popcru. Prof Sithole is a businessman and occasionally provides services to Popcru.

“I approached him and related to him my intentions to purchase property and my financial predicament, I also told him that I was due for retirement in January of 2022, and that he should loan me the purchase price, and I will pay him back as soon as my retirement benefits are paid. He agreed. Accordingly, my first issue was resolved.”

Nsele states that he was worried the property would not accrue to his son and was advised by a lawyer to set up a trust to buy the house for the son’s benefit.

“I accept that I possibly referred to a Trust as a company, hence the allegations that I said the process must be halted because I wanted to use my company to buy the property, I meant no harm.”

By that time, Sithole had already paid the purchase price directly into the attorney’s account by way of two electronic transfers.

Nsele said setting up the trust had been taking too much time, so he told the estate agent to transfer the house into his girlfriend’s name, but was told that in the meantime another offer had been accepted and his cancelled.

“The transferring attorney requested me for an account wherein the purchase price should be refunded. I told them to pay it back into the account from which it was received. They refused and insisted that the money had to be paid back to me… The transferring attorney and I deadlocked. The money is still with them. Seeing that I had no interest in providing them my account number, and they were not prepared to pay the money back to Prof Sithole, I advised him to pursue the issue legally.”

This is the R1.15-million for which the National Prosecuting Authority has now obtained a preservation order in the Mbombela High Court.

Regarding the BMW motorbike, Nsele said, “Prof Sithole wanted to buy this bike for himself, and I told him jokingly in fact, that I liked it. He asked me if he were to buy [it] for me, how would I pay him back. I told him in small instalments of not more than R5,000 each because that is what I could afford at the time. I thought he was not serious when [he] transferred the amount to the purchase price.”

Nsele said this money had been paid back.

“I once again do not understand how this clearly marked transaction can be considered corruption. I have always known Prof Sithole as a man of many means. He does business with many other people and not only Popcru.”

Popcru elections — and scandals

In his main affidavit in support of Popcru’s attempted interdict, General Secretary Dladla raised technical objections to the search warrant and claimed its timing was suspicious.

“For almost two years nothing happened, and no explanation is proffered… On 9 to 11 October 2023, the NEC [National Executive Committee] held a meeting which decided on who is eligible for election into office in the upcoming elective National Congress meeting scheduled to take place on 6 to 10 November 2023. The very next day, on 12 October 2023, Captain Magetse deposed to an affidavit in support of the application for this search and seizure warrant. This can’t be a mere coincidence.”

In his confirmatory affidavit, Cebekhulu, who has been president of Popcru since 2008, pursued the same line, stating: “I honestly believe that this search and seizure warrant which was sought and granted against me, for no conceivable reason, is intended to ruin the reputation of the Union and some of the candidates by their adversaries ahead of the elective National Congress.”

Yet the relationship between the union’s leadership and its business associates has been at the heart of disputes and scandals that have dogged Popcru for years.

In court documents, former Popcru general secretary Nkosinathi Theledi — who was fighting to get his job back after being sacked in 2020 — claimed he was targeted for speaking out about Cebekhulu’s involvement in issues linked to Popcru’s union investment arm, Popcru Group of Companies (PGC).

At the centre of various allegations and counter-allegations was the union’s reported R200-million investment in Royale Energy, of which Cebekhulu, who also uses the name Makhaza, has been a director since May 2015, the same time the investment deal went through.

Sithole also served as a director of a related company, Royale Energy Group, between 2006 and 2010. He has maintained a close relationship with Popcru, attending the 2019 congress as a representative of the Safer South Africa Foundation, an NGO established by Popcru in 2012.

Sithole was named in allegations before the Zondo Commission, which noted in its final report that former Bosasa manager Angelo Agrizzi had alleged he was part of a group that received R1-million per month from Bosasa to exercise influence over Correctional Services.

The report states, “Mr Agrizzi testified that Mr Sithole would get somebody to email an invoice and he would pass it on to accounts, get Mr [Gavin] Watson [Bosasa’s director] to approve it and put it through for payment.”

Sithole has not responded to questions about his relationship with Nsele — or Agrizzi’s allegations. DM