Bank records from the IgoFiles show that Mpambani arrived in Cape Town on the Friday before the ANC birthday bash. Using money from the asbestos audit that he had transferred to the 605 Consulting Solutions bank account, that weekend he splashed about R5 000 on booze at a liquor store in Green Point, around the corner from where the ANC festivities were due to take place. He also swiped one of his bank cards at various restaurants in the area.
Magashule was back at work in Bloemfontein on Monday 12 January, according to his diary. On that Thursday, the second instalment of R31
million from the FSHS arrived in the Blackhead–Diamond Hill joint account. Mpambani transferred the entire amount to Diamond Hill’s own account, from which he made several large payments for ‘loans’
and ‘consulting services’. He also moved just under R9 million to 605
Consulting, citing ‘engineering services’ as the reason for the transfer.
From 605 Consulting’s account, Mpambani made further payments that correlate with the damning ‘cost of business’ column in the ‘Free State Asbestos’ Excel spreadsheet. On 20 January, he transferred R1
million to El Jefe Consulting. According to company records, this entity’s sole director is Jimmy Tau, the retired Kaizer Chiefs soccer star who was allegedly cut in on the asbestos deal because of his proximity to Nomvula Mokonyane. That the company was only registered in February 2014, shortly before Mpambani and Sodi began putting together the deal, is suspicious. I got hold of Tau in November 2018 to find out why his company received money from Mpambani. He asked me to email him with my queries, which I duly did, but he hasn’t got back to me.
After the second payment from the FSHS, Mpambani again travelled to the Free State, where he withdrew large amounts of cash from ATMs all over Bloemfontein and nearby towns. According to his diary, Magashule had several engagements in Welkom and Sasolburg between Monday 19 January and Friday 23 January. Records in the IgoFiles show that Mpambani spent money from the 605 Consulting account on food, liquor and other expenses in these two towns in the same week.
On the Friday, Magashule was in Sasolburg for ‘various’ executive
council activities and Operation Hlasela engagements. That evening, Mpambani used the 605 Consulting bank card at a lodge in Three Rivers, Vereeniging. The lodge is located about twenty-five kilometres from Sasolburg. He spent just under R5 000 at the establishment in two payments. The following day, Mpambani travelled to Gauteng, as evidenced by the fact that he withdrew money from the 605 Consulting account at FNB’s Merchant Place branch in Sandton in the afternoon.
According to Magashule’s diary, he too was travelling to Gauteng that day: ‘travel to JHB,’ reads the entry for Saturday 24 January.
And so it went. Each time Blackhead–Diamond Hill received money from the FSHS, Mpambani’s movements matched those of Magashule.
This would continue for the next year and a half, until his death in June 2017.
On Sunday and Monday (25 and 26 January 2015), Magashule attended a two-day ANC NEC lekgotla at the Saint George Hotel in Pretoria. While the NEC gathering was under way, the Free State Development Corporation’s company secretary, David Nkaiseng, forwarded to Mpambani the ‘briefing documentation’ for the Free State delegation’s upcoming visit to Cuba. The document bore the emblem of the Office of the Premier.
On Tuesday 27 January, Mpambani printed a company resolution for Diamond Hill at a print shop in Sandton. It read: ‘Directors’
contribution to the Free State Asbestos project will be paid to the company of their choice.’ At 11:10 that morning, Magashule and his six associates boarded South African Airways flight SA222 at O.R.
Tambo International Airport, from where they flew to Cuba via São Paulo, Brazil, and Bogotá, Colombia. That same evening, just before 7
p.m., Mpambani boarded an Air France flight that took him to Havana
via Paris.
Although Mpambani did not form part of the official Free State delegation, sources who went on the trip said that the businessman was frequently in Magashule’s company in Cuba. ‘Ace mostly spent time with people from the FDC and his business associates; he didn’t really pay much attention to the provincial and municipal officials,’ said an employee of a Free State municipality who tagged along. On a few occasions, Magashule and his band of businesspeople joined the government officials for dinner. ‘We were all eating at a restaurant in Havana one night when Ace introduced us to this young businessman.
It was Igo,’ the same source told me. One of Magashule’s former staffers confirmed that Mpambani formed part of the premier’s group in Cuba. ‘I don’t know how they knew each other. I met the guy for the first time in Cuba,’ this official told me.
The IgoFiles show that Mpambani’s visit to Havana was brief. He must have arrived there quite late on Wednesday 28 January. That evening, before 10 p.m. local time, he spent just under R6 000 from the 605 Consulting account at a hotel in Havana. The following day, he paid just under R4 000 for an air ticket that would take him to the Cayman Islands that Sunday. This picturesque archipelago south of Cuba is known for its beautiful beaches, pristine blue water and infamously opaque financial sector. The Cayman Islands ranks third on the Tax Justice Network’s 2018 Financial Secrecy Index, 1 meaning it is one of the best places in the world to stash money without being asked difficult questions.
Mpambani landed at the Owen Roberts International Airport in George Town, the Caymans’ capital, at 15:25 local time on Sunday 1
February 2015. He checked into the Holiday Inn Resort Grand
Cayman later that day. The following evening, he started doing some serious business in the tropical paradise. At just before midnight local time, he sent an email with an attached Word document to the private Gmail account of John Matlakala, the FSHS director who had sent him and Sodi the IPW for the asbestos auditing contract. The document Mpambani sent to Matlakala was an invoice for R76.5 million, marked
‘Invoice Number 002’. The following morning, Mpambani sent two more invoices to Matlakala for R20 million and R31 million respectively. Clearly, these were for the two payments the department had already made. In other words, the FSHS paid Blackhead–Diamond Hill R51 million without being invoiced first. This is an indefensible accounting transgression.
According to the contract, the department was supposed to pay Blackhead–Diamond Hill in accordance with the following fee structure: the full contract amount of R255 million was to be divided into two equal payments of R127.5 million. Blackhead–Diamond Hill was entitled to 40 per cent of R127.5 million as an upfront payment –
in other words, R51 million. The remaining 60 per cent of the first payment of R127.5 million, which amounted to R76.5 million, was to be paid as ‘progress certificate no. 2’, according to the IPW.
The fact that the upfront payment of R51 million had been split clearly confused Matlakala, who now needed to process the invoices Mpambani was sending him from the Caymans. He emailed Mpambani with the following request: ‘Kindly forward your documents in PDF format and observe the following: 1. Invoice 001 for R51 [million] must be dated 02 Dec 2014. 2. Invoice 002 for R31
[million] must be dated 12 Jan 2015.’ Mpambani tried to clarify. ‘Good day Mr. Tlaks, there seems to be a little confusion,’ he wrote. ‘Invoice 1
was for R51 million but it was paid in 2 parts (R20m in Dec and R31m in January). Therefore I can’t make an invoice for R51m (40%) and then another for R31m (part of the same 40%) unless that’s what is required for administration purposes.’ This must have satisfied Matlakala, as he did not reply.
With the invoices for the first R127.5 million now submitted to Matlakala and R51 million already paid out, Mpambani tended to some banking business. Information from the IgoFiles suggests he met with Jarard Blake, the head of banking and operations at the Caymans’
branch of UBS Fund Services. I reached out to Blake to ask him whether Mpambani had been to his bank and, if he had, what he did there. He ign
ored my queries and later blocked me on Twitter. Blake clearly did not want to talk about the South African businessman.
On 3 February, Mpambani flew back to Cuba. The next day, he returned to Johannesburg via Paris. Three days later, Magashule flew back to South Africa via São Paulo.
It is curious why Mpambani chose to execute so much of the financial admin for the asbestos deal while he was abroad with Magashule. And his sojourn in the Caymans, with its reputation as a great place to hide money, and his probable meeting with UBS, pose tantalising questions about the payment of the directors’ contributions outlined in the Diamond Hill company resolution. Thanks to the Caymans’ secretive financial sector, we may never know whether Mpambani made payments and, if he did, to whom.
*
Mpambani’s trip to Cuba suggests that the young businessman had finally established himself as a member of Magashule’s inner circle of connected contractors. According to his official diary, the premier’s first scheduled engagement after the Cuba trip was at the University of the Witwatersrand in Johannesburg on Monday 9 February. He most likely returned to Bloemfontein later that day, as he had a meeting scheduled there for the following morning. Mpambani drove to Bloemfontein that same Monday, where he withdrew R16 000 from an ATM at the Dynarc Walk shopping centre that evening. The next morning, between 08:07 and 08:11, he withdrew a further R24 000 in separate batches from the Brandwag ATM around the corner from Free State House. According to Magashule’s diary, he had a ‘private meeting’ scheduled at Free State House for 9 a.m.
It may be mere coincidence, but anecdotal evidence suggests that the money Mpambani withdrew went straight to Magashule. A source who worked closely with Mpambani told me that whenever the FSHS made payments to Blackhead–Diamond Hill, the businessman would set off for the Free State to meet with either Magashule or one of his proxies.
‘When he went to meet with Ace or one of his people, Igo would sometimes leave Johannesburg with large amounts of cash,’ alleged my source.
Mpambani would apparently regularly meet with Chris Ackeer, another Parys local who effectively worked as one of Magashule’s aides. Ackeer later joined Magashule at Luthuli House when the latter became ANC secretary-general. ‘Igo met with Chris a lot during that time; he told me whenever he went down to meet with him,’ my source told me.
I had heard about Ackeer even before I started researching the
asbestos auditing contract. Several sources in the Free State close to Magashule alleged that Ackeer was not only like an assistant, but also a fixer of sorts. ‘Ace first brought Ackeer into the ANC to try and get more support from coloured voters in the Free State. Then he gradually started to work for Ace. Later, he allegedly started doing Ace’s dirty work. He would pick up money for Ace or do other things that Ace couldn’t do with the people from his official blue lights security team,’
a top politician in the province told me. A second source, a current MEC, agreed: ‘Chris and Ricardo [Mettler] did the same kind of things for Ace. They did most of his dirty work.’ Mettler, another member of Magashule’s security detail, was implicated in the alleged theft of a Pierneef painting worth an estimated R8 million from the Free State premier’s office in early 2018, during the time that Magashule was vacating it. 2
Ackeer strongly denied the allegations. ‘I am not the SG’s fixer and I don’t collect cash from other people on his behalf,’ he told me. ‘The SG
is not my employer. I am a strategic manager for the ANC and I don’t report to the SG,’ added Ackeer. He said he had not known Mpambani well and only met him ‘maybe two or three times’ at social events. ‘I never took money from him,’ he said.
I discussed Mpambani’s pattern of withdrawing cash from ATMs near Free State House with three former members of Magashule’s inner circle. They were all convinced that the cash went to the then premier.
‘This is how Ace operates,’ said one. ‘A similar thing happened with another FSHS contractor in the Riebeeckstad area. After the businessman got paid by the province, Ace himself collected cash from the guy at an Engen garage.’ Another alleged that ‘Ace deals in cash.
He knows that by doing so it will be very difficult for anyone to catch
him red-handed.’ Nevertheless, I believe I have established beyond any doubt that the former premier was an active participant in the asbestos auditing scheme, as further detailed in the next chapter.
24
Ace shows his hand
In mid-February 2015, Mpambani received an email from A.K.
Manyike on behalf of the Ori Group. The email included the ‘final 100% report’ for the asbestos audit. The report itself indicates that the audit commenced in November 2014.
Documents in the IgoFiles explain the Ori Group’s role in the saga. In August 2014, after it had become clear that the Blackhead–Diamond Hill joint venture would be awarded the asbestos contract, Mpambani and Sodi appointed Mastertrade to compile the audit report. According to the breakdown of fees detailed in the dubious ‘Free State Asbestos’
Excel spreadsheet, Mastertrade was set to receive R44 million from the joint venture for their services.
At the end of October 2014, Mastertrade’s boss, Sello ‘Sydney’
Radebe, subcontracted a company called Ori Group to perform the audit. Mastertrade promised to pay them just over R21 million. This meant that of the R255 million for the asbestos audit and assessment that the FSHS had agreed to pay Blackhead–Diamond Hill, roughly 90
per cent, or just over R230 million, was unadulterated profit. And who knows how much profit the Ori Group made on the R21 million. It took just three months for them to complete a report that, at fifty-three pages, cost taxpayers nearly R5 million per page.
It gets worse. The audit report’s main finding was that just over 36
000 of the 300 000 houses assessed had asbestos roofs. The report included a breakdown of where these houses were situated. I spoke to a source from the auditor-general’s office with insight into the project.
He said the entire contract was a ‘sham’. ‘The old houses with asbestos roofs are usually concentrated in the same area in each township, and the municipalities have records of where those houses are located,’ he told me. In other words, the asbestos audit was completely unnecessary. A current FSHS staffer agreed. ‘The location of houses with asbestos roofs forms part of a dataset for government’s discount benefit scheme. Government already sat with this information, so the asbestos audit was not necessary,’ this source said.
Also, when the AG’s office went over the work submitted by Blackhead and Diamond Hill, it found that many of the houses in the report had been duplicated. ‘You would see a picture of house number 20 in a certain township, and, a few pages later, you would again see the same house. This happened with more than one house,’ my source in the AG’s office told me.
Even if the department could somehow justify the audit, we now know that ‘only’ R21 million went to the company that did the actual work. This left plenty of cash for all manner of indulgences, including luxury cars. A few weeks after the second payment from the FSHS, Mpambani treated himself to a Bentley Continental GT. It was a second-hand model from a local dealership in Vanderbijlpark, but it nevertheless cost the businessman R1.2 million. Ominously, this is the vehicle he would die in about two years later. Mpambani later bought more luxury vehicles and a string of upmarket properties.
Shortly after Mpambani bought the Bentley, he received an invitation to Magashule’s 2015 State of the Province Address, which was scheduled for 24 February. The invitation had been sent by an employee from C-Squared, a controversial events-management company whose owner is said to be close to Magashule.1 Documents in
the IgoFiles show that three days after receiving the invitation, Mpambani withdrew R150 000 from 605 Consulting Solution’s account at an FNB branch in Rivonia, near Sandton. At that stage, 605
Consulting had about R2 million left of the nearly R9 million that Mpambani had transfer
red from the Diamond Hill account the previous month for ‘engineering services’. The day before Magashule’s speech, Mpambani drove down to Bloemfontein, swiping his Diamond Hill and 605 Consulting bank cards at toll gates and a fuel station along the way. He booked into the Southern Sun hotel, across the road from the FNB ATM in Brandwag near the premier’s official residence. The following afternoon, after the State of the Province Address, Mpambani spent money at restaurants and clothing stores in Bloemfontein’s Mimosa Mall and elsewhere in the city. He returned to Gauteng the next morning, filling up at an Engen fuel station across the road from his hotel just after 9 a.m. and swiping his bank cards at the series of toll gates between Bloemfontein and Johannesburg.
On 26 March 2015, a third payment of R25 million from the FSHS
landed in the Blackhead–Diamond Hill joint account. Once again, Mpambani made several large payments for ‘consulting’ and
‘engineering’ services to various entities, including another R500 000
to El Jefe Consulting, former soccer star Jimmy Tau’s company. This correlates exactly with the payment schedule set out in the dubious
‘Free State Asbestos’ Excel spreadsheet, which shows that ‘JT’ was supposed to get half a million rand after the third instalment of the asbestos payments was received.
The spreadsheet also shows that ‘AM’ (Ace Magashule?) and ‘MEC’
(Mathabo Leeto?) were due to receive R1 million and R1.5 million respectively at this time. Mpambani made payments that matched
those amounts exactly. For instance, on 28 March, after transferring a
‘project management’ fee of R2.4 million to Diamond Hill’s account, he paid a third party R1 million for ‘consulting services’. Unfortunately, the IgoFiles contain a few blind spots with regards to the identity of the beneficiaries of some of these payments.
Gangster State Page 29