STATE FUNDING FLAWS
Probe into Gauteng Partnership Fund flags possible ‘reckless’ loans to Mashatile’s son-in-law
An investigation into loans issued by the Gauteng Partnership Fund to a company owned by Deputy President Paul Mashatile’s son-in-law has revealed possible governance shortcomings at the state agency.
The outcome of an investigation into loans issued by the Gauteng Partnership Fund (GPF) to a company owned by Nceba Nonkwelo, Deputy President Paul Mashatile’s son-in-law, was released on Monday.
A report on the investigation, conducted by law firm GMI Attorneys, found that three loans were advanced to Nonkwelo’s company, Nonkwelo Investments (Pty) Ltd, between 2012 and 2017/2018. An amount of R7,246,126 was paid out to the company. However, the investigators made no findings of wrongdoing on the part of Mashatile.
The report did highlight governance shortcomings at the GPF over the period in question, finding that certain decisions made by the entity were seemingly “arbitrary”, “reckless” and “not in the best interest of the GPF”.
Speaking at a media briefing on Monday, Gauteng MEC for Human Settlements and Infrastructure Development Lebogang Maile said: “We have taken full cognisance of the findings in the investigation report, including the financial and legal implications, as well as the institutional integrity of the GPF as an important entity of the Gauteng Department of Human Settlements.
“As the executive authority exercising oversight over the affairs of [the] GPF, we are now in a better position to put necessary measures in place.”
The GPF is an agency under the Gauteng Department of Human Settlements that combines resources from the private and public sectors to speed up the development of affordable rental housing near amenities and economic opportunities.
Maile ordered the probe into loans provided to Nonkwelo Investments in July 2023, following a series of media reports by News24 claiming the company had received loans totalling about R30-million between 2013 and 2017 for the construction of student accommodation in Highlands, Johannesburg, that was never completed.
It was also reported that Mashatile was living in a R37-million house owned by his son, Thabiso Mashatile, and Nonkwelo.
Read more in Daily Maverick: Out of the shadows, Mashatile now has to fight the harsh glare of the national spotlight
Bad business
The report found that Nonkwelo Investments participated in the GPF’s Entrepreneur Empowerment Property Fund Programme (EEPF programme) aimed at “encouraging historically disadvantaged individual-owned companies to participate in the affordable housing rental market”.
“Due to outstanding material evidentiary documents which we have been informed by GPF it cannot locate … we are unable, at this stage, to make conclusive findings [as to] whether all applicable policies, procedures and other laws and regulations were followed in approving Nonkwelo Investments as a participant to the EEPF programme,” stated the report.
The GPF worked with a co-funder, the National Housing Finance Corporation (NHFC), to finance several EEPF projects, including that of Nonkwelo Investments. NHFC provided the larger share of the funding as the “senior funder”.
Nonkwelo Investments took ownership of a property with the stated intention of developing it for affordable housing. By 2016, it had become clear that the project was no longer within budget due to cost overruns.
The report stated that there may have been negligence on the part of the company and the GPF, in that “a proper site investigation and due diligence may not have been conducted prior to the approval of … funding”.
Later in 2016, the NHFC withdrew its funding for various projects, including the Nonkwelo Investments development. As a result, it was decided that the GPF would provide 100% of the funding for the project.
“Whilst we are mindful that the [GPF’s investment committee] was duly authorised in terms of the 2016 [Delegations of Authority] to approve funding from R5-million to R20-million … it was evident that the [Nonkwelo Investment] project was not viable,” stated the report.
“[E]xpending further funds and/or approving a senior funding loan to Nonkwelo Investments … was not in the best interest of the GPF. Whilst this does not form part of our scope or mandate, it is unknown to us why such a ‘jump’ was allowed. Unless there is a reason for this, it would have … been an arbitrary and possibly a reckless decision.”
In 2019, the GPF approved a proposal for the Nonkwelo Investments project to shift from an affordable housing development to a student accommodation development, reportedly to make it more financially viable and attract more funding. GMI Attorneys found that there was “no legal basis” for the approval of this change.
Settlement agreement
The report confirmed that a settlement agreement was reached between the GPF and Nonkwelo after it became clear that his company was in breach of various loan agreements.
The agreement, signed by Nonkwelo in 2021, stated that his company’s property would be sold and the proceeds from the sale would be used to settle the loan repayments owed to GPF.
A property valuation report conducted by GMI Attorneys suggested that the property had an estimated value of between about R1.5-million and R2.4-million.
“With the documents provided to us, we are of the considered view that the GPF may not have utilised all of the remedies available to it in terms of the loan agreements in order to recover the monies owed by Nonkwelo Investments,” stated the law firm’s report.
While Maile acknowledged that the findings suggested “governance pitfalls” at the GPF, he added that the Gauteng Department of Human Settlements did not view the report’s recommendations as conclusive.
“Accordingly, we have asked the [GPF] board to institute a process of reviewing and finalising them, with the intention of strengthening the areas of weakness,” he said.
In an interview with SABC, he emphasised that the investigators had decided who to interview for the report, without interference from the Gauteng Department of Human Settlements.
“[The investigators] decided who to interview, so it was not our decision. For instance, they did not interview the deputy president [Mashatile], because I think in the course of the investigation it became clear that he’s not implicated. So, they made a determination on their own without any influence on our part on who to investigate,” he said. DM
It is beyond belief that the following can not be done 1. Look on SARS at income declared 2. Look on vehicle registration at vehicles owned 3. Look at deeds office at properties owned . This should be done for all politicians and public servants and trusts of which they or , their family members are trustees. Any computer system could do such a database search in 1 day. Where the figures don’t add up , start with the biggest difference , charge those people and have a one week maximum court time with no postponement allowed , and if found guilty of stealing from the people , award a minimum 20 year jail sentence without parole . Leaders must lead . Oh 🥱this sounds like the long promised lifestyle audits . The lack of action , conscience, integrity , capability , character of those purporting to be leaders is both disturbing and shameful. And the only thing worse is they have kept the masses in poverty and ignorance knowing full well that to an unemployable person with no hopes and dreams a small grant and bag if empty promises is better than what they have . Disgraceful .
There would not be a government left if that was allowed.
Disgracefull investigation deliberately wanting to clear Mashatile. But that was predicted from the start. Denise Smit
It is sickening to think that this person getting away with his corrupt activities will most probably become the president of the country with the help of his gangster buddy Maile who “ordered under protest” the investigation. Denise Smit
The rot of the ANC has crept in all aspects of South Africans live, these individuals will not stop looting until there is nothing left.
Mmxxmm…it’s no secret that South Africa, its fiscus, its economy and everything meant for socio-economic development belongs to the elite comrades, their families namely kids, spouses and crony-benefactors…definitely not the laymen on the street…for the last -+30 years or so…we can’t be fooled no more!
The whole lot of the cANCer are in it together. It says a lot about the calibre of the paid up members of the cANCer.
Let me tell you a story.
2016 a child safety seat was developed that could be carried and installed by the child itself with supervion in 60 sec. The CEO of BabiesRUs in a meeting confirmed a letter of intent would be available if the product was SABS marked. We struggled to get a meeting with him because he said the market was saturated, until he saw our mockup. Joined Innovation Hub with Gauteng Accelerator Program funding to assist with prototype and SABS testing. During induction we were told not to worry about our BEE status as the ratio was naturally acceptable 2:8 if I remember, I’m Lilly White Caucasian male (LWCM). Well that was a lie. At the same intake as me an African lady (AL) enrolled, pitched a condom vending machine, watch ad get condom, with no customer in sight, AL got 2Bar immediately. Strange, you can walk in a clinic and snag 100 for no ads. Suddenly LWCM is too LW, get BEE partner, give away 51%,but noooo. The GAP board feels 51% is too precise a number. Wasted 2 years and R200k of my life for nothing. I’m watching the same thing happen now with another AL “developing” 4IR 3d printed prosthetics, watch them blow R100k on a structured light 3d scanner with tax payer money. I see that box unused behind me while she and her 3 paid staff make shoddy 1920’s wooden crutches with 3d printed TPU feet that no one wants. I have more stories about freshwater fish farms and Harties mansions. No authorities have any appetite to look too close, they fear reality.
Errrm, Mr president definitely time to start with the clean-up you promised
I would be interested to know the total sum of money loaned, the interest rate on the loans, the degree of breach of the loan repayments and penalties applicable and what the new arrangement is for the full repayment of all loans.
This is tax payers money and we deserve answers.
Who is GMI Attorneys? Do we need a possible probe into them