Deadly Water (Part 3): The dominoes fall

Recap: In 2019, CMS Water Engineering won a R291-million contract to refurbish the Rooiwal wastewater treatment plant in Tshwane alongside infamous tenderpreneur Edwin Sodi. But the partnerships that had made the company rich would eventually turn toxic. For years, the company’s de facto CEO, Rudolf Schoeman Jnr, had been quietly siphoning off contracts from CMS Water Engineering – the company his father founded – into a new venture called CMS Global Solutions. His long-term plan, according to a former staff member, was to build up CMS Global, then jump ship. But in 2020, Rudolf began to suspect his new business partner was taking money behind his back. This is Part 3 of our investigation.

Joburg

Rudolf Schoeman Jnr took his father, Dolf’s, modest engineering business and – through bravado, ambition and alleged bribery – turned it into a major beneficiary of government tenders in the water industry.

In 2022, he boasted that it was “virtually impossible” for a company “with an order book of over R2-billion” to go bust.

Six months later though, he was dead, and CMS Water Engineering was in liquidation.

When we asked former employees where things went wrong, they pointed to two dates: 2017, when Rudolf got a new business partner, and 2019, when Rudolf moved to Joburg and allegedly descended into a haze of drugs and alcohol.

“[H]e said that most of his meetings are in Joburg… He wants to move there closer to the people, to the decision-makers,” a former employee told us.

Being in Joburg also meant being closer to his new partner, the politically connected businessman Edwin Sodi. But as his focus shifted to Joburg, CMS Water’s existing contracts began to falter.

“When Rudolf moved to Bryanston, that was the biggest downfall because at least when he stayed in Potch, he used to come in two times a week, three times a week,” a second employee told us.

Rudolf, who wasn’t a hands-off boss to begin with, stopped coming into the office and was no longer available for meetings.

“[There’s] an old saying in Afrikaans: Ver van jou goed, naby jou skade,” the second employee told us.

It’s an idiom, so the translation – far from your things, close to your damages – doesn’t really convey the message. Essentially it means, if you stray too far from home and don’t take care of business yourself, you’re looking for trouble.

And as Rudolf moved to Joburg, trouble descended on CMS.

Deadly Water is also being released as amaBhungane’s first podcast, featuring interviews with the journalists who did the digging. Read all our investigations or listen to the podcast on Spotify, Soundcloud or at amaBhungane.org.

A fractured CMS

The breakup of CMS started small.

Clint Adonis had joined the family business after marrying Rudolf’s sister. Their wedding gift, he told us, was a 60% stake in CMS Water.

The potential perks of this arrangement were that Adonis would earn a salary from the company, while also giving CMS Water the B-BBEE status to allow them to qualify for a new set of tenders.

“I was only there on paper, I never had access to anything and I still don’t,” Adonis told amaBhungane last year.

This arrangement worked well for a decade until Adonis separated from his wife. In September 2019, he sent an email to both Rudolf (his brother-in-law) and Dolf (his father-in-law), indicating his “decision to withdraw from the organisation” and sell his stake in the business.

This was accepted by the Schoemans, but the negotiations over Adonis’ exit package became ugly.

In a letter, seen by amaBhungane, Dolf said he was not prepared to buy out Adonis, but would offer him R100,000 monthly for a year and give him ownership of his company vehicle, a Nissan Navara.

R1.2-million and a second-hand bakkie was a low-ball offer for 60% of a company with a turnover of R146-million. But Dolf warned that since CMS Water was a closed corporation, Adonis could sell his shares only “with the consent of every other member”, meaning they could block any attempt to sell his shares to another buyer.

From this point, things deteriorated: CMS Water stopped paying Adonis’ salary; in a letter, Dolf told his soon-to-be ex-son-in-law that he had “not made a single contribution to the business”. 

In response, Adonis revoked his power of attorney and refused to sign a guarantee that CMS Water urgently needed for the biggest project it had ever secured: the R291-million expansion of the Rooiwal wastewater treatment works near Hammanskraal.

“You are [wilfully] and blatantly trying to cripple the running of this business,” Rudolf wrote in an email on 25 November 2019, just days before CMS had to deliver the guarantee. “You clearly have one goal, and that is to destroy the business.”

In another email later the same evening, Rudolf accused his (soon to be ex) brother-in-law of “hold[ing] the company at ransom which is arguably one of the most destructive and malicious forms of behaviour one could imagine”. 

“In light of the above mentioned, we are left with no other option but to proceed with further legal action … We just wish that you comprehended that you’re in essence gambling with the lives of over 500 employees which all have extended families. We find your gross disregard for this aspect shocking and disturbing.”

But the letters also suggest that Adonis didn’t have access to CMS Water’s financials, despite being its majority shareholder. 

When speaking to amaBhungane last year, he told us he also hadn’t received his share of the R48-million in dividends paid out between 2014 and 2018: “For me, there’s a big stink around the company which I’m aware of, but I don’t know what the stink is exactly, I couldn’t tell you. But it’s just a black hole for me.”

Timing

It’s worth pausing for a moment to point out how incredibly reckless the timing was. CMS Water had just landed the R291-million Rooiwal contract, and the Schoemans chose this moment to go to war with their majority shareholder.

The City of Tshwane, meanwhile, was getting nervous. On paper, CMS Water and Sodi’s company, NJR Projects, had looked like a sure bet. But where was the guarantee for the Rooiwal project?

Companies are required to put up a performance guarantee before undertaking any major government contract. They’re not cheap: the joint venture had to pay R2.7-million as a security deposit and monthly fees of R161,000.

But this was a R291-million contract, and if CMS Water and NJR couldn’t come up with 1% of the contract value up front, how likely was it that they would complete the project?

The guarantee would eventually arrive two weeks late, after the Schoemans secured a court order against Adonis. To explain the delay, CMS sent the city a signed board resolution removing Adonis from the company and accusing him of, among other things, “being incapacitated at work”.

The Schoemans didn’t remove Adonis, though. B-BBEE certificates show that CMS Water continued to claim it was majority black-owned until it was liquidated.

The fallout with Adonis had almost cost CMS the R291-million Rooiwal contract, but CMS had gone to court and at the eleventh hour had delivered the guarantee for Rooiwal. 

This wasn’t the first attempt to kill the Rooiwal contract, nor the last. 

A few months earlier, a rival bidder had taken the municipality to court in a bid to block the award to CMS Water and NJR. That case failed, but within weeks of the guarantee being delivered, the municipality tried to cancel the contract as well. 

Again, CMS went to court and forced the municipality to reinstate the contract. 

What the city had no way of knowing, though, is that another nuclear bomb was about to go off inside CMS Water.

The next domino to fall was CMS Global Solutions and business partner Eric du Plessis.

Fallout in Zeerust

In 2017, Rudolf had set up a new CMS. The plan was to leverage CMS Water’s B-BEEE status and superior track record to secure large and lucrative tenders in CMS Water’s name, then quietly redirect most of the money, and responsibility, to CMS Global, a company that Rudolf and Du Plessis jointly owned.

The arrangement had short-term benefits for Rudolf, but would end up cannibalising the company his father had built. 

The former employee told us they had raised concerns about the arrangement, but Rudolf had shot them down: “We went to Rudolf and said, ‘Listen, stuff is going sideways … something’s not right.’ And he was livid… He said we didn’t trust him, and his gut instincts about people.”

But in June 2020, something changed, and Rudolf abruptly resigned from CMS Global.

“I don’t know what happened, but the relationship just went sour from his side,” Du Plessis told amaBhungane last year. “He wouldn’t take calls, wouldn’t talk to me.”

Letters, included in court papers, show that Rudolf had begun to suspect that his partner was stealing money behind his back.

For three years, CMS Water had happily handed over millions to CMS Global. Now, Rudolf became convinced that money had gone missing.

Money unaccounted for

In 2019, CMS Water had landed a R129-million project to upgrade the wastewater treatment plant in Zeerust, a major farming town in North West.

The plant was already operating over capacity when CMS Water was appointed, meaning that sewage was already leaking into the Kareespruit river.

The expansion should have been completed in October 2020, but by June, consulting engineers Zutari were worried: “We are concerned about the contractors’ rate of progress since there [are] already delays,” it wrote in a letter to CMS Water, referring to its weekly letters outlining various shortcomings on the project, including “lack of sufficient foremen” and “broken equipment not being repaired”.

A month later, the consulting engineers sent another letter. For the second month in a row, [CMS] workers had been paid late and walked off the site: “Works are continuing to fall behind… A common theme is that there remains … a shortage of material and equipment on site for works to proceed… As we have discussed so many times, this really cannot carry on like this…”

What the consulting engineers didn’t realise was that there had been a massive fallout between Rudolf and Du Plessis, who were now accusing each other of stealing money from the Zeerust project.

As with most of its projects, CMS Water had asked the municipality for an upfront payment on Zeerust – first R12-million, then another R6-million. And as in most other cases, CMS Water transferred most of the money to CMS Global.

The second payment of R6-million was supposed to be used to pay a specific list of suppliers who would provide pipes, bricks and cement. But when Rudolf took a closer look at the finances, it appeared that the suppliers had received less than R300,000, leaving R5.7-million seemingly unaccounted for.

“Despite receiving this staggering amount, CMS Global Solutions still failed to adequately acquire materials for the project to be executed smoothly,” Rudolf wrote in an August 2020 letter, giving Du Plessis 24 hours to deliver evidence to the contrary or face legal action.

Du Plessis denied that any money was unaccounted for. But the problem wasn’t just Zeerust.

• In Rustenburg, CMS had faced similar accusations that R26-million in advance payments couldn’t be accounted for. Read Deadly Water: Another Rooiwal debacle in Rustenburg.

Sodi’s projects

Court records show that CMS Global was working on 13 projects that had been awarded to CMS Water, including a R67-million project to upgrade a water pipeline in Ntambanana in KwaZulu-Natal, and a R112-million project to expand the Sterkfontein regional water treatment plant in the Free State.

On paper, both projects had been awarded to joint ventures (JVs) between CMS Water and NJR Projects, the civil construction company owned by Sodi. But in reality, both were being run by CMS Global.

“The circumstances surrounding the award of [the Ntmabanana] tender [are] still unclear to us as we carried absolutely no knowledge of the award of this tender ever being priced or tendered on by CMS Water Engineering or its JV partner,” Rudolf would later tell the North West high court. “It came as a surprise when we were furnished with the appointment letter … as no representatives from either of the JV partners were ever aware of this project.”

“After CMS Global [had] once again failed dismally, on this project, we were issued with another notice of termination,” he added.

Du Plessis disputed this, telling the liquidators that he and Rudolf “drank several bottles of champagne when the project was awarded”, but that, like Zeerust, the Ntambanana project became a casualty in the break-up. 

The R112-million Sterkfontein project in the Free State was going off the rails as well: Sedibeng Water (the water board that awarded the tender) had given the joint venture R8-million in advance payments, but Rudolf now alleged that R6-million was unaccounted for.

Again, Du Plessis disputed this and, in a joint meeting with Sodi, “pointed out payments on the project’s spreadsheet of funds taken by [Rudolf]”.

“The reaction of Mr. Edwin Sodi clearly indicated that he had no knowledge of these funds and this led to an awkward situation in the meeting,” Du Plessis later told the liquidators. 

CMS Global had even started work on the prized Rooiwal project, but had completed only R1.75-million worth of work when the fallout happened.  

Childish acts of sabotage

In an August 2020 letter, Du Plessis warned that Rudolf’s decision to stop paying CMS Global was jeopardising all their joint projects: “The ability to execute projects is critically dependent on cash flows to the contractor… For the past 3 months CMS Global Solutions was not able to pay its salaries and wages on time, causing labour unrest, risk to property and equipment.” 

Part of the problem was that the opaque relationship between the two CMSes – which had helped CMS Global secure the contracts – was now a liability. 

As Du Plessis pointed out: “Presumably, the purpose of your letter is to suggest that the funds for the project are spent inappropriately, which we deny… if you want to put us on terms for performance in terms of the … contract … it would be a requirement for such a contract to be in place, which we have been pleading for all along.

“The loose ‘verbal arrangement’ between the companies, which is partly your creation as a director of both companies is … not practical or suitable to regulate matters relating to contractual performance.”

Even so, Du Plessis pleaded to “resolve these matters amicably”. 

Rudolf’s response was vitriolic: CMS Global was guilty of “childish acts of sabotage” and had “a long-standing history of not paying its creditors”, he wrote back, ignoring the fact that until three months earlier, he had been an owner and director of the company. 

“It has become evident that it is impossible for the two entities [CMS Water and CMS Global] to co-exist.”

In November 2020, Rudolf told Du Plessis to stop work on all CMS projects.

The devastating aftermath

What made the fallout at Zeerust so catastrophic was that parts of the old wastewater plant had been dismantled ahead of CMS’s upgrade, which never came.

When amaBhungane visited the town in 2023, the plant was still in a half-completed state, with bacteria-ridden, contaminated water still flowing into the Klein Marico river and Klein Maricopoort dam. 

The knock-on effect was regular blooms of blue-green algae, which can be toxic to people and potentially lethal for wildlife. The algae had given the Klein Maricopoort dam a neon green hue and made the water unsafe for farms to use for irrigation.

As an added bonus, the smell of sewage permeated the entire town of Zeerust.

Cornel Dreyer, a DA councillor, had kept close tabs on the Zeerust project using his drone to monitor CMS’s progress and the spreading environmental catastrophe. In one of many open letters, he accused the municipality of allowing “lethargic progress by a contractor already under terms, to contaminate waterways, downstream boreholes & irrigation schemes threatening the livelihood of residents”.

Asked why it had waited so long to cancel CMS Water’s contracts, the municipality said: “[R]emember before we could terminate, we were supposed [to] exhaust all internal remedies as well as consideration of the legal costs and lengthy litigations.”

In September last year, the municipality told Parliament that it needed another R105-million to complete the Zeerust project.

‘Hoendervleis’

As the once-lucrative partnership disintegrated, chaos descended on both sides of CMS: Rudolf accused CMS Global of misappropriating funds on multiple projects, while Du Plessis claimed CMS Water was withholding millions in outstanding payments. 

As the two went back and forth over who was to blame, projects ground to a halt, including one near Richards Bay. 

“Ek kry hoendervleis as ek aan daai projek dink … Daai projek het gemaak dat ek al my respek vir Eric verloor het,” a long-time staff member told the liquidators. (I get goosebumps when I think about that project … That project made me lose all my respect for Eric.)

Rudolf had stopped all payments to CMS Global and, in November 2020, had kicked Du Plessis off the Richards Bay site. With no money coming into CMS Global, its bank was now demanding the return of the equipment it had financed.

But when staff arrived to collect equipment from the project, they were taken hostage.

According to the staff member, CMS Global had failed to pay the local security company guarding the site: “Toe sê hulle ‘nee, ons hou julle en die trok hier tot hulle ons betaal en as hulle ons nie betaal nie, dan steek ons vir julle en die trok aan die brand.’” (“Then they said ‘no, we will keep you and the truck here until they pay us, and if they don't pay us, then we’ll set you and the truck on fire.’”)

The staff member said they called Du Plessis and begged him to intervene – “To sê ek vir Eric, ‘maar praat met die mense, dis jou mense, onderhandel, doen iets,’ ” – but he refused, saying: “Ek gee nie geld nie.” (“Then I told Eric, but talk to the people, it’s your people, negotiate, do something,” but he refused, saying: “I’m not giving money.”)

Finally, around midnight, another staff member managed to negotiate a deal: the hostages would be allowed to leave, but the truck would stay as collateral for the unpaid salaries.

Du Plessis remembers the incident differently: “My recollection is that the security company guarding the equipment was not paid. I informed Rudolf beforehand that they [would] be reluctant to oversee the removal of equipment if their invoice remained unpaid,” he told us in a written response.

“[His] response was ‘f… them, I will take the [equipment]’. One can accept that the security company was approached with this attitude, and they refused.”

Rudolf, Du Plessis recalled, eventually relented and paid the security company what they were owed.

One CMS goes down

In June 2021, with no prospect of being rescued, CMS Global went into liquidation. And for a while, it looked like Rudolf had won.

Normally, the departure of a subcontractor isn’t terminal to a project. But on some of its biggest projects, CMS Water had handed over most of the responsibility and most of the money to CMS Global.

Worse still, CMS Water had asked for and received advance payments on several of these projects. Now disagreements arose over how that money had been spent.

When we spoke to Du Plessis last year, we asked him why, in his view, CMS Water didn’t finish the projects that Global handed back.

“It was incompetence and arrogance,” he told us. “These projects are very complex… I am sure they did not plan to make the projects fail, they were overwhelmed by the technical requirements… There is no doubt in my mind that if CMS Water had honoured all the payments due to Global as the subcontractor, these projects would have been completed.”

“The biggest thing of CMS [Global] closing down was with all the cash withdrawals,” a third employee told us. “[When you] pay this one and pay that one, and not the creditors, you cannot buy any equipment any more because you’ve got a bad name.”

For a while, CMS Water was able to keep the plates spinning, moving money from site to site. In February 2021, the company even finalised its books showing R128-million in revenue for the year.

On paper, CMS Water still looked healthy. But in reality, both the company and Rudolf were already unravelling.

That’s in part 4 of Deadly Water: The land of lamb and gold. DM

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