Deadly Water (Part 4): The land of lamb and gold

Deadly Water is a series. Read Part 1: The life and death of a tenderpreneur, Part 2: A trail of destruction across North West and Another Rooiwal debacle in Rustenburg, and Part 3: The dominoes fall. Or listen to our Deadly Water Podcast available on Spotify, Soundcloud or on the amaBhungane website.

Bryanston marked the beginning of the end for Rudolf Schoeman Jnr in more ways than one.

In 2023, his body was discovered, covered in blood, in his luxury townhouse at Bryanston’s 70 on Berkeley.

But in 2020, he had moved there full of ambition: “[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 last year.

This was, in the words of one business associate, when things started exploding.

In 2019, CMS Water Engineering had secured a new business partner: alleged tenderpreneur Edwin Sodi. Soon they had three joint venture projects – Ntambanana (R67-million), Sterkfontein (R112-million) and Rooiwal (R291-million) – and were eyeing out new opportunities in Pietermaritzburg, Mthatha and a potential R850-million contract in Polokwane. 

In 2020, CMS was also given a slice of a R1.2-billion contract to build a new water treatment plant in Mmamashia, Botswana. 

But former staff members say that as CMS Water’s contracts got bigger, Rudolf’s own wellbeing deteriorated.

“I said to [people] numerous times, I really wish you had met Rudolf before … I wish you had met the businessman that I came to know because that guy – jis – he would have taken us places,” the former employee told us. “If that guy was still here today, I would still be working for CMS. Because that guy knew something, but then all of a sudden something changed.”

“The biggest downfall for CMS was when Rudolf moved to Bryanston. That’s when everything collapsed,” a second employee told us. 

Rudolf, they said, often had guests over at his house until the early hours of the morning with alcohol flowing freely, for what he described as “networking purposes”. Several people told us that Rudolf had long struggled with addiction and substance abuse and had done several stints in rehab.

Now, those demons began spilling over into CMS’s work as well. 

“[Al] wat … die kliënt wou gehad het, was Rudolf moet net actually nugter op ’n site meeting opdaag sodat ons kan ’n plan maak,” a former staff member would later tell CMS Water’s liquidators. (“All … the client wanted was Rudolf to just actually show up sober to a site meeting so we could make a plan.”)

“Hulle het fotos van hom waar … hy’s uitgepass binne in die bakkie voor die meeting,” (They have photos of him where … he was passed out inside the van before the meeting.)

“Nege uur in die oggend,” another staff member added. (“at 9 o’clock in the morning.”)

CMS was already falling behind on several major projects. The upgrade to the Zeerust wastewater treatment plant – a R129-million project in North West – should have been completed in October 2020, but the project was nowhere near done, and for months the consulting engineers had been pleading with CMS to get back to work.

In the same municipality, the R50-million upgrade to the Sannieshof wastewater treatment plant was also going badly. The deadline for the project was September 2021, but a feud between Rudolf and his business partner had stalled the project, and unpaid workers had blockaded the site.

“[Die kliënte] het die laaste ruk … hoeveël keer vir ons gesê, ‘gaan net aan, maar moenie laat Rudolf naby ons kom nie, moenie dat hy meetings toe kom nie, moenie laat hy sites toe kom nie…’ ” (“[The clients] have told us how many times in the last while, ‘just keep going, but don’t let Rudolf come near us, don’t let him come to the meetings, don’t let him come to the sites…’ ”)

Vleisgeld

By 2021, CMS’s revenue had increased, but so too had the company’s overdraft.

After falling out with Eric du Plessis (his erstwhile partner), Rudolf had lost access to their company plane. Now he bought a bigger one: a Cessna 414 Chancellor. 

A R7-million plane was not excessive for a company of CMS’s size – in 2021, it recorded R128-million in revenue – but it was symbolic of a new, less-cautious way of doing business.

In early 2021, Rudolf announced that he had found a new source of revenue for the business: “Hy noem dit sy vleisgeld,” a former staff member would later tell CMS’s liquidators. (He calls it his meat money.)

Through one of his connections, Rudolf had met Judy Muchiiri, a Kenyan woman who had a business sourcing and exporting lamb to the Middle East: “Judy is ’n … makelaar – sy koop vleis by ander mense aan, sit haar winsie by en verkoop dit… in Oman en Koeweit,” the staff member explained. (Judy is a … broker – she buys meat from other people, puts in her profit and sells it … in Oman and Kuwait.)

If this sounds strange to you, it sounded no better inside CMS Water. Rudolf, with his love of luxury brands and city life, had no discernible expertise in the meat export business.

“[H]y’t vir my vertel hy gaan nou so baie geld maak met hierdie vleis,” the long-time staff member said. “[O]ns het van die begin af gedink dis ’n scam, want daar’s geen dokumentasie, daar’s nie papierwerk nie, daar’s nie ’n kontrak nie, daar’s niks nie.” (“[H]e told me he’s going to make so much money with this meat … [W]e thought it was a scam from the beginning, because there’s no documentation, there’s no paperwork, there’s no contract, there’s nothing.”)

From internal CMS documents, we know that at least one shipment of 80 lambs was exported to Kenya in March 2021, and an invoice issued to Muchiiri’s Yasram Meat Company for R347,256.

“Sy sou ons toe nou betaal het, [maar] sy’t ons nie betaal nie,” the long-time staff member said. (“She should have paid us already, [but] she didn’t pay us.)

Unperturbed, Rudolf announced he had done another deal with Muchiiri. But from this point on, the deals would be different: CMS would no longer source and export lamb; it would loan the money to Yasram, who would source the lamb and arrange the exports, and repay CMS’s loan with interest.

Over the next three months, CMS paid Yasram $243,333 (R3.6-million) to fund consignments of lamb. 

Internal company records show that Rudolf kept sending money to Yasram, even though Muchiiri was slow to send money back. By March 2022, CMS had sent Yasram R3.6-million and received R1.2-million in return. 

“En daai was een van die groot redes waar Rudolf en sy pa [uitgetval] het. Want dan sê sy pa vir hom, ‘Ek verstaan nie, ek verstaan nie hoekom nie?’ En dan sê Rudolf net ‘Ons gaan baie geld maak.’ ” (“And that was one of the big reasons Rudolf and his father [fell out]. Because then his father tells him, ‘I don’t understand, I don’t understand why?’ And then Rudolf just says, ‘We’re going to make a lot of money.’ ”)

Kenya and the meat lady

This all sounded incredibly implausible to us. So we called Muchiiri and she answered: “Listen, Rudolf never dealt with someone without referrals,” she told us.

“Rudolf came to Kenya in 2021 with a friend of mine who is a diplomat, working with the South African government,” she said, but declined to provide a name. “And he was with two other people who were apparently getting him more government contact.”

Documents suggest that Rudolf was interested in bidding for a water infrastructure tender in Kenya. That project never materialised, but like South Africa, Kenya was full of temptations.

“[A]ll Rudolf did for the month he was here was drink, drink, drink. So I couldn’t understand … you’ve got this position in life, you’ve got this … company that is performing extremely well, why exactly would you be drinking your life away?” she said.

Muchiiri told us that it was during this trip that Rudolf offered to bankroll her meat export business.

“[H]is company in South Africa had issues … he wasn’t getting as many contracts as he was supposed to get … It’s like he was trying to get contracts in Kenya just to cover ground or just to try and make money because it’s like he’d lost so much. Because he kept on saying ‘there’s this tender that has not paid, there’s that tender that has not paid – things like that.’”

Rudolf’s “vleisgeld” project wasn’t recorded in CMS’s books, as far as we could tell, at least not where it should have been.

By December 2021, FNB had started asking awkward questions, like, why was a water engineering company sending millions to a meat broker in Kenya? In response, CMS told the bank that the deal had been “terminated”.

Money kept trickling back for the next few months, but not enough to make the deal make sense.

“When he passed on, I spoke to his assistant and I told her to just calculate what came out to me and what came back and tell me the difference … I never heard from [her] again,” Muchiiri told us.

Friends and favours

Although CMS’s vital signs were deteriorating by mid-2021, Rudolf remained upbeat.

“He constantly called me and told me he’s unlocking this, unlocking that, and this is Ramaphosa’s person for this and that… Rudolf will meet somebody today and you would feel like he had known that person forever, and he would end up giving so much to that person,” Muchiiri said.

Among the CMS documents, we found a passenger manifest showing that Rudolf arranged to fly Vusimuzi Tshabalala, then the ANC’s chief whip of the Free State provincial legislature, to Lesotho on his private plane.

“They wanted to fly with me to Lesotho at that time, but that never happened,” Tshabalala told us when we called him.

He had met Rudolf, he said, through a friend and the trip was related to Rudolf’s meat export business: “In my private capacity I had any right to associate myself with any business person who was in the industry of beef because it has always been my private ambition to be in that industry,” he told us in a follow-up WhatsApp message. 

He added: “It had nothing to do with any favours or anything.” 

But Rudolf’s largesse went beyond favours for the politically connected. Around this time, Rudolf had told Muchiiri that he had paid R6-million to an official in the hope of securing a water contract: “Rudolf called them the ‘Big Boys’ because they were asking for money upfront to be able to do stuff for him. Whoever he was dealing with in the government, whoever was promising him jobs, I think they really put him [under pressure], they wanted him to pay the money upfront.”

Gold

Other odd transactions were also starting to appear on CMS’s books.

In July 2021, Rudolf had set up a new company – Merxx International Africa – with two new business partners: a woman from Gauteng’s East Rand, Connie Martiens, and Tomas Sundell, a Swedish man with a Swiss bank account. 

Internal CMS records are vague about Merxx’s business, only referring to it as “besigheid gestig waarop hy sou goud handel” (business established to trade gold), and all our attempts to contact the two business partners failed. 

By 31 December 2021, CMS had loaned Merxx R1.8-million, according to internal management accounts that noted: “This loan is unsecured, interest free with no fixed terms of repayment”, meaning that CMS had no way of demanding the money back.

The timing was appalling. CMS was already desperately short of cash to allow it to complete its water and wastewater projects. In November 2021, staff hadn’t received their full salaries.

But instead of clawing back the money he had loaned to Yasram Meat and Merxx, Rudolf gave the gold trading business another R4-million loan. By the end of February 2022, Rudolf had loaned Merxx R5.8-million – just as a cash flow crisis was about to engulf CMS.

Rooiwal

It’s worth remembering that while Rudolf was investing in lamb and gold, the City of Tshwane was under the impression that CMS and NJR Projects (Edwin Sodi’s civil engineering firm) were hard at work on the Rooiwal wastewater treatment plant.

The deadline had been pushed out to May 2022, but it was becoming increasingly clear that the two tenderpreneurs were never going to meet it.

We covered the debacle that followed in our Part 1: the life and death of a tenderpreneur, but to recap: in December 2021, a critical piece of equipment for the Rooiwal project – a dewatering belt press – arrived in Durban harbour.

CMS still owed €500,000 (roughly R10-million) to the supplier in Germany, and the cost to keep the belt press in storage was racking up at R18,000 a day. 

In January 2022, the city had threatened to cancel the contract because no one had returned to site after the builders’ holiday.

Crews had finally returned to site on the final day of the deadline, but by March 2022, the city was threatening to cancel the contract again, unless CMS submitted a decent recovery plan.

In May, with no sign of the belt press, the consulting engineers told the city: “We have requested the Contractor to provide a full statement as to how much is still being owed, when they are paying and moving the equipment. They have misled everyone by saying that all the costs pertaining to the equipment clearances, tax, bill of lading and storage have been fully paid and delivery is confirmed.” 

Eventually, Sodi agreed to bail out CMS by depositing R4.7-million into the shipping agent’s account to pay for the storage fees so that the belt press could be released. But Rudolf had then asked the shipping agent if he could borrow some of the money to pay salaries, promising to return it a week later.

When that didn’t happen, Sodi opened a case of fraud with the police and had Rudolf arrested. 

In August 2022, the City of Tshwane pulled the plug on the entire project. Rooiwal was not the first domino to fall, but at R291-million it was the biggest.

Nowhere left to run

CMS Water might have been able to withstand the body blow of Rooiwal if 2022 had been less brutal.

In the course of seven months, CMS Water had lost nine contracts in quick succession:

• In March 2022, the Sannieshof contract was cancelled,
• In May 2022, the Parys contract was cancelled,
• In June 2022, the two Zeerust contracts were cancelled,
• In July 2022, the Mmabatho contract was cancelled,
• In August 2022, the Khutsong and Rooiwal contracts were cancelled and the Sterkfontein contract was ceded.
• In September 2022, the Ikageng contract was cancelled.

Most of these cancelled sites had the hallmarks of CMS left all over them: advance payments with money unaccounted for, equipment never delivered or connected, delays exacerbated by shortfalls in payments to staff, and residents left in the lurch with no water.

Rudolf’s home turf, North West, had once been a shining beacon of what CMS Water could accomplish. Now, however, even that couldn’t be salvaged.

In September 2022, CMS Water lost one of its last remaining contracts in the JB Marks local municipality, which includes Potchefstroom, where Rudolf had lived for years with his family.

In a series of letters, the municipality had begged CMS Water to hand over two generators for the Ikageng pump station, which had already been paid for.

“Our concern is not only with the lack of progress on the project but also with the resultant water supply shortages during times of scheduled load shedding,” acting municipal manager Sandile Tyatya wrote to Rudolf in July 2022. 

“The absence of standby power generation has directly resulted in numerous water supply shortages in the network, culminating into community unrest and service delivery protests … which blocked the N12 national road.

“We are also aware that your workers are still on site and have not been paid for long periods. This situation must be rectified as soon as possible.”

Tyatya signed off requesting “an urgent meeting with your good selves” to come up with a plan. However, when no recovery plan materialised, the project was cancelled two months later.

Mmabatho

In the province’s capital, Mahikeng, it was also dawning on Sedibeng Water that CMS probably wasn’t going to finish the upgrades to the Mmbatho water treatment works.

The R112-million contract had been awarded to CMS in February 2016. The project was supposed to supply another 10 million litres of drinking water to the city, but six years later, it still wasn’t complete.

To secure the contract, CMS had partnered with Roucomm Systems, a construction company owned by Ralph Mabe, a prominent local businessman.

The rapper, Cassper Nyovest, who grew up in Mahikeng, once tweeted that Mabe was the first person he ever knew who drove a Bentley: “1st time I saw a Bentley I was 12/13 years old walking from my Hood to Rivera Park (The Burbs). I saw this big whip approaching from afar. Didn’t know the car but it just seemed expensive. A man called Ralf Mabe in a Green Flying Spur. Told myself I would drive the car one day!!”

When CMS Water needed a partner in Mahikeng, it turned to Mabe. But soon, there were problems.

“CMS began falling behind their submitted programme of works within six months … and were served numerous notices to comply,” David Magae of Magalies Water, which is now in charge of the project, told us.

Part of the problem was that the civil works – awarded to another company – were late, causing knock-on delays. But Magae added that there were also “numerous instances where the progress reported by CMS/Roucomm JV was disputed”. 

The November 2019 deadline came and went without the project being finalised. As the project floundered, taps in parts of Mahikeng ran dry and the quality of the water deteriorated. 

Eventually, the Mmabatho project ground to a halt. Bill Bosman, the consulting engineer on the project, would later tell CMS’s liquidators: “We can’t say for sure why they didn’t complete it – they just stopped performing, after a very slow start, and never got going again despite all [the] cajoling and warnings.” 

Damages

By the time the R112-million Mmabatho contract was cancelled in July 2022, the CMS/Roucomm JV had already been paid R64-million – just over half the value of the original contract.

Magalies Water, which was tasked with rescuing the project, estimates that it will cost another R227-million to complete – and has instructed its lawyers to pursue CMS Water and Roucomm for damages. 

“[T]he total costs of damages that Magalies Water will be entitled to claim against the JV will only be known once the current contract is completed,” Magae explained.

But Mabe – Rudolf’s partner with the green Bentley – now claims he knew nothing about the Mmabatho project. 

When we spoke to him last year, he told us that while he had partnered with Dolf Schoeman, Rudolf’s father and CMS’s founder on a project back in the 1980s, he had never agreed to work with Rudolf: “The son, he’s a piece of nonsense, from what I’ve heard. I’ve never partnered with him,” he said.

To be clear, the documents we’ve seen and the public announcements all refer to the Mmabatho project as a CMS/Roucomm joint venture. But Mabe now claims he was the victim of a scam:

“I suspect that at some stage there was a project that this fellow [Rudolf] was wanting to do with us and then we gave him our particulars … I suspect he used our particulars for something else,” he told us in a follow-up call.

In 2023, Mabe was arrested by the Hawks and charged with fraud over an R86-million tender to supply hospital equipment to the Moses Kotane hospital in Ledig, near Sun City. So the last thing he needs is to be saddled with a massive claim from Magalies Water as well.

Towards the end of the call, he added: “I believe he was a fucking piece of shit this fellow [Rudolf]. I believe he got killed because of nonsense like this.”

Fighting for the last rand

By the end of 2022, at least R1-billion in contracts would be cancelled or ceded to other companies to complete.

As projects started to collapse, a bank run began on the little bit of money left in CMS’s accounts.

In May 2022, FNB – which had banked CMS for over 20 years – called in its R6-million overdraft. Rudolf initially promised FNB that all CMS’s income would be paid into the now-frozen FNB account, then quietly informed the few clients who remained that CMS would be banking with Investec instead.

Dolf had seemingly tried a similar tactic: a month earlier, a letter from CMS had arrived at Maquassi Hills Local Municipality where it had a R4-million contract: “Kindly take note that in future … [CMS] will conduct services under the following name: Services for Water and Sanitation (PTY) Ltd”, the letter read, providing bank details for a new FNB bank account. 

A second letter arrived at the municipality a month later, sent this time by Rudolf: claiming that his father’s earlier letter had been sent “fraudulently” by someone “who is not employed or associated with CMS Water in any way”.

“We wish to furthermore inform you that Mr Schoeman senior is not part of CMS Water Engineering anymore as he decided to open a new business to compete with CMS Water Engineering directly,” Rudolf wrote.

Dolf, it seems, had seen the writing on the wall and while his son was slowly sinking by himself in Johannesburg, had begun creating a contingency plan. 

Services for Water and Sanitation was registered in March 2022, and although Dolf was not a director, he began transferring assets – vehicles and equipment – from CMS Water to the new company.

Rudolf’s letter to Maquassi Hills added: “Mr [Dolf] Schoeman does still have shares in the business but he is in the process of being removed. Therefore he does not form part of any decision making and management of the business anymore.”

With that, CMS Water was left solely in the hands of Rudolf to manage.

One more trick

By now, salaries were going unpaid: “Families of the people working on site called me to say, ‘my child is sick, I haven’t been paid’. We didn’t have any answers,” the first former employee we spoke to told us.

“At the end, a lot of us took our own money just to try to keep the company [going] because Rudolf was nowhere,” they added.

By July 2022, most of the employees had been retrenched, but not paid their exit packages, which collectively amounted to R3.2-million. The handful who remained had seen Rudolf turn things around enough times not to abandon ship just yet.

And true to form, Rudolf had one more trick up his sleeve.

He had just secured an even bigger tender from the one place that should have known better: the national Department of Water and Sanitation.

That’s in the fifth and final part of our Deadly Water series: a zombie in the water industry. DM

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