Although the full contract cost was R255 million, the remaining R25
million would not be paid out. Sources familiar with the saga told me that the contract had virtually drained the department’s coffers, so there was simply no more money to settle the rest of the bill.
When the last payment landed in the Blackhead–Diamond Hill joint account, Mpambani immediately moved the entire amount to 605
Consulting. He next embarked on a spree of intricate transactions that saw him move millions of rands through bank accounts held in his name or in those of his other companies and trusts. In the process, he splashed more than R10 million on upmarket properties, adding to an already impressive portfolio of houses acquired since the first asbestos audit payment. He also used R1 million to settle his vehicle finance for a Range Rover. Apart from this and the Bentley, Mpambani now owned an Aston Martin V8 Vantage, a Porsche Cayenne and a Maserati, all bought with the proceeds of the asbestos audit.
He continued to make large payments for ‘consulting services’,
‘engineering services’ and other similarly named expenses. Some of this money ended up in his other accounts, but the recipients of most of these payments remain unknown. It was from this final tranche of money that Mpambani paid R990 000 to Kingdom Impact, the company represented by Kenosi Moroka’s law firm.
By early September, nearly the entire R77.5 million had been drained from 605 Consulting’s account when Edwin Sodi, Mpambani’s partner in the joint venture, came knocking. According to their original agreement, Sodi should have received half of the asbestos audit’s proceeds, once all the payments to third parties had been settled. But Mpambani had not shared the final payment with his partner. Sodi fired off an email to Mpambani on 5 September. ‘I expect in my account R38 212 500 in the next 24 hours and nothing less,’ he fumed.
The IgoFiles show that Mpambani had sent Sodi a ‘payment recon’, a spreadsheet that supposedly justified why he had not paid his partner half of the final R77.5 million. According to the document, the public protector had laid claim to R60 million of the joint venture’s earnings from the asbestos audit. In a subsequent court battle, Sodi elaborated on this development.
According to court filings, the two men met in Sandton on 6
September. Mpambani told Sodi that ‘he [Mpambani] had been informed by the Free State Department [of Human Settlements] that the Public Protector intended recovering approximately R60 million …
on the basis that the [department] had been “overcharged”,’ Sodi explained in his affidavit, adding that he had been ‘sceptical’ about Mpambani’s story. He had good cause to feel that way. The public protector does not have a mandate to seize the proceeds of dodgy contracts. Furthermore, in this case, the public protector had not even published a report on the matter. Sodi again asked Mpambani to pay him his half. Later that day, Mpambani transferred just R8 million to Sodi’s company. The outstanding R30 million formed the basis of the legal proceedings Sodi would later institute against the executor of Mpambani’s estate.
Amid the growing tension between the partners, Mpambani continued making regular cash runs to the Free State. On 17 August, he withdrew R100 000 from an FNB ATM a few kilometres away from where Magashule was attending an executive council meeting. He was back in Bloemfontein three weeks later. This time, he withdrew R150 000
from 605 Consulting’s account at the Brandwag ATM near Free State House. According to the premier’s official diary, Magashule returned to Bloemfontein later that day after a meeting in KwaZulu-Natal.
On 2 December, Mpambani withdrew R150 000 from an ATM in Welkom, MEC Leeto’s hometown. By that time, Magashule was in Hong Kong, having flown there from O.R. Tambo International Airport in late November. In the week after the premier’s departure, Mpambani and his wife also flew to Hong Kong. There is nothing in the IgoFiles to suggest that Magashule and Mpambani spent time together in the Far East, as they had done in Cuba nearly two years before, but the timing of their respective trips is curious.
With 2016 nearly at its end and the final payment from the FSHS in the bag, Mpambani’s financial activities linked to the asbestos auditing deal seemingly took a break. It is worth reviewing how Mpambani spent some of this money.
In the preceding two years, the FSHS had transferred R230 million in a series of staggered payments to the Blackhead–Diamond Hill joint account. Financial records from the IgoFiles and related documents suggested the joint venture and some of its partners, including Mastertrade, had earned more than R200 million in clean profit from the project. But Mpambani’s partner was adamant that the asbestos audit did not amount to a huge rip-off. He refused, however, to tell me how much profit the joint venture had bagged. ‘The conclusions you
draw about the amount of profit are incorrect and it is not incumbent on the JV to answer questions about its profitability. The assumption that the JV “milked” the taxpayer is wrong and is rejected,’ Edwin Sodi said through his lawyers. Mokhesi also denied that the FSHS had massively overpaid Blackhead–Diamond Hill. ‘We are not sure about your understanding of the scope and the nature of the work that was done on this issue,’ said the HOD.
However, Mpambani’s management of the joint-venture account raised too many red flags to ignore. It was clear that he had funnelled much of the huge payments from the FSHS through a complex web of bank accounts opened in his name or in those of his companies. In the process, he bought a small fleet of luxury cars worth millions of rands.
He spent even more on upmarket properties bought without bank loans. And he paid tens of millions of rands to unknown accounts belonging to third parties, masking the transfers as ‘engineering services’ and ‘consulting’ fees. The timing and value of these payments frequently mirrored the amounts Mpambani and Sodi had seemingly agreed to pay people and companies listed in their ‘Free State Asbestos’ Excel spreadsheet.
That Magashule’s fingerprints were on the deal seems undeniable. In late 2014, when FSHS staffers queried the contract, they were told that Magashule was behind it. When the premier travelled to Cuba in early 2015, Mpambani was right by his side. As we have seen, Mpambani submitted the first invoices to the FSHS during this trip. Later, throughout 2015 and 2016, Mpambani complied with requests from Magashule’s office to settle invoices for, among others, the ‘Cuban 19’, student fees and Refiloe Mokoena’s daughter’s college tuition. All of this amounted to about R1 million.
Mpambani’s contributions to the ruling party, including the bus service and the direct donation in July 2016, came to about R400 000.
MEC Mathabo Leeto’s non-profit organisation got at least R100 000.
Mpambani also forked out more than R50 000 for her and her entourage’s stay at Sun City for the 2015 SAMAs, according to the IgoFiles.
Finally, over the course of two years, Mpambani withdrew almost R3
million from various ATMs and bank tellers each time Blackhead–
Diamond Hill received funds from the FSHS. He withdrew most of this cash in Sandton, oftentimes shortly before driving to the Free State. Of the roughly R500 000 he withdrew in Bloemfontein, more than R300
000 came from the FNB ATM around the corner from Magashule’s official residence. Magashule’s diary, meanwhile, indicates that he was mostly at home when Mpambani made such withdrawals.
When I met one of Mpambani’s former business partners in mid-2018, I asked him if there was any reason why Mpambani drove around with large amounts of cash. Did he perhaps need to pay wages?
‘There would have been no reason why Igo would have needed to travel with that much cash,’ this person told me. ‘He was a consultant, not a contractor or project manager. He didn’t pay wages or anything like that.’
‘So where did all that cash go?’ I asked him. He was silent for a while.
When he spoke again, he looked worried. ‘I think you know the answer, but I am not going to go into details,’ he said. ‘If I do that, I could end up like Igo.’
No
sooner had he received the final payment for the asbestos audit contract than Mpambani set his sights on looting even more money from the FSHS. In June 2016, the department advertised a contract for
the ‘design and implementation of water and sewer networks in various Districts in the Free State over a period of three (3) years’. 1 This time, Mpambani would use 605 Consulting Solutions to tap into the latest revenue stream, with his wife, Michelle, as his co-director.
The entire process was a farce. By the time the call for bids closed in July 2016, 605 Consulting was not even registered with the Construction Industry Development Board, a prerequisite for securing construction contracts from government. This happened only in November of that year, and Mpambani’s company obtained the lowest possible grading. With a CIDB score of just 1, 605 Consulting was woefully underqualified for the multimillion-rand infrastructure design work. No doubt aware of its limitations, 605 Consulting made a presentation to the FSHS in late August. It vowed to identify specific parts of the project that would be ‘subcontracted to local emerging contractors’. 2
In January 2017, the department informed 605 Consulting that it had been chosen for the ‘design and supervision’ of water and sewerage infrastructure projects in several municipalities in the northern Free State, including Tumahole, where Magashule grew up. The letter, signed by HOD Tim Mokhesi, curiously swopped ‘implementation’, as stipulated in the request for proposals, with ‘supervision’. The FSHS
no doubt knew that 605 Consulting was by no means capable of implementing large water and sewer networks. The promise to rope in
‘emerging contractors’ became a fixed requirement of the deal. ‘A 30%
sub-consulting obligation will apply to this appointment and is to be awarded to an emerging consulting engineering firm agreed upon by the department,’ read the letter signed by Mokhesi. In other words, the HOD, or whoever pulled his strings, could nominate the company (or
companies) that would benefit from the project.
But before that could happen, Mpambani first had to deliver design reports for the proposed water and sewerage infrastructure. Seeing as neither he nor his wife were engineers, they subcontracted a string of professional firms and qualified people. As always, such expenses would only constitute a fraction of 605 Consulting’s revenue, and there would be plenty of fat left over to pass around.
In May 2017, Mpambani submitted preliminary infrastructure design reports for Tumahole and other proposed residential developments in Heilbron and Sasolburg. He also sent off a few invoices for the reports, which included 605 Consulting’s ‘inception’ fees. In all, the FSHS now owed Mpambani a fresh R11 million. And this was only the first round of invoices. By May 2018, 605 Consulting had reaped more than R40
million from the department, according to the housing subsidy system database and related documents.
Mpambani sent these preliminary reports and invoices to the private Gmail account of Freddy Tokwe, an FSHS staffer said to be close to Magashule and Mokhesi. The four preliminary reports looked a lot like copy-and-paste jobs. But that was not the biggest problem. The reports contained the details of the two ‘civil engineers’ who had been subcontracted to respectively author and review the work. I looked up their names at the Engineering Council of South Africa. Contrary to what was claimed in the reports, neither was a civil engineer: the author was registered as a professional engineering technologist, and the reviewer as a candidate engineering technician.
Getting the first R11 million payment from the FSHS was not all smooth sailing. On Tuesday 20 June, the day he died, Mpambani got an email from a senior official in the FSHS financial department. ‘The
challenge we have currently is that your company is not on our BAS
[Basic Accounting System],’ read the email. ‘In order for [the]
department to process your claims further it must be created with Provincial Treasury.’ At just before 10 a.m., Mpambani responded as follows: ‘All the required documents you mention have been submitted 2 weeks ago to the office of Mr. Freddy Tokwe. Kindly assist by double-checking …’
It is not clear where Mpambani was when he sent the email. But fifteen minutes later he withdrew half a million rand in cash from a teller at FNB’s Benmore branch in Sandton. Although the FSHS had not yet paid 605 Consulting for the infrastructure design reports, there was a fair amount of money in the account. The previous day, Mpambani had transferred R1.1 million from Diamond Hill to 605
Consulting, flagging it as ‘Loan–Diamond Hill’. This was leftover cash from the asbestos audit payments.
After sending some additional paperwork regarding the BAS to the FSHS official, likely the last email he would ever write, Mpambani drove to an FNB branch in Woodmead, north of Sandton. Here, at 11:39, he withdrew exactly R499 900. With just R100 shy of a million rand in his Bentley, he headed back towards the Sandton CBD. Less than twenty minutes later, Mpambani’s lifeless body sat slumped over the steering wheel of the expensive car. He had been shot dead on Bowling Avenue in full view of at least a dozen bystanders. Reports from the scene show that he had stuffed the R499 900 into a small cooler bag that was found next to him in the car. He had put the other R500 000 in the boot.
More than 400 kilometres to the south, Magashule was meeting with party officials at the ANC’s provincial headquarters in downtown
Bloemfontein, according to his diary. The premier’s schedule at that time was dominated by party-political events. The previous week, police minister and fellow Free State local Fikile Mbalula had publicly attacked Magashule on social media after it became clear that the premier was going to make a run at becoming the ANC’s new secretary-general. 3 Magashule had hit back at Mbalula at a Provincial General Council (PGC) meeting in Bloemfontein on the weekend before Mpambani’s murder. 4 With about six months left before the ANC’s elective conference at Nasrec, Magashule’s latest political battle was now really heating up. The premier needed every ounce of support he could find, financially and otherwise. Mpambani, with his riches from the asbestos auditing contract and even more money heading his way thanks to 605 Consulting’s latest project, no doubt formed part of Magashule’s financial planning for his upcoming battle to become secretary-general. There is good reason to suspect that the R1 million Mpambani withdrew shortly before his death was intended for Magashule.
One of the slain businessman’s former associates told me about an interesting development that took place the day before his death. On Monday morning, 19 June, Mpambani apparently received a phone call instructing him to be in Bloemfontein the following day. ‘Igo was very secretive about his dealings in the Free State, but he told me he was going to meet with someone from Ace’s office. That was the last time I saw him alive,’ this source told me.
Back in Bloemfontein on that Monday morning, Magashule had a
‘meeting with alliance’ at the ANC’s Free State headquarters, according to his diary. If the premier or someone in his circle had phoned Mpambani, subsequent developments suggest that the conversation
may have been about cash. It was at 11:02 that day that Mpambani transferred the R1.1 million ‘loan’ from Diamond Hill to 605
Consulting’s account. This is the money he would withdraw the following day, before his untimely death.
According to sources familiar with the murder investigation, when the police found the cash in Mpambani’s car, they naturally asked his wife and other family members what it was for. ‘Michelle and Manny [her brother] told the police that Igo was on his way to Bloemfontein when he was killed,’ one source told me. Apparently, they were evasive and vague when the police tried to get more information regarding the money. They simply told the investigators that the cash was for
‘business’, according to my sources.
I made several attempts throughout 2018 to ask Michelle about her late husband’s dealings in the Free State, his involvement with Magashule and the almost R1 million he withdrew on the day of his murder. She eva
ded all of my efforts to discuss the matter. This hardly came as a surprise, considering how involved she became in 605
Consulting’s dubious dealings with the Free State provincial government after her husband’s death.
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‘Ace’s girls’
In late June and early July 2017, Igo Mpambani’s friends, family and business associates attended memorial services held for him in Johannesburg and Welkom. He was finally buried in his family’s ancestral homestead in the Eastern Cape. All indications are that his death neither affected 605 Consulting’s latest dealings with the FSHS
nor deterred the company from continuing to make questionable payments to third parties.
On 6 July, less than a week after Mpambani was laid to rest, the FSHS
transferred more than R11 million to 605 Consulting for the preliminary infrastructure design reports. At the end of that month, Michelle, who had taken over her late husband’s role as the company’s manager, made the usual payments for ‘engineering services’, ‘services rendered’ and similar fees. This included a payment of exactly R1.1
million to a company called Kaykaysim Projects. This entity’s sole director is Katleho Sothoane, a twenty-five-year-old project-management student at the Central University of Technology.
According to her Instagram account, Sothoane also has a qualification from the North-West University’s Vaal Triangle Campus. Further payments from 605 Consulting were made to Kaykaysim Projects in August and October 2017, each time shortly after money was received from the FSHS. In all, Sothoane’s company earned at least R1.5 million from 605 Consulting. When I visited Kaykaysim Projects in Bloemfontein, I found a near-deserted office with only a receptionist on site. The office, incidentally, is right across the road from Botlokwa
Holdings, the company owned by Magashule’s daughter Thoko Malembe.
When I later got hold of Sothoane on the phone, she told me that Kaykaysim had ‘tendered’ to do work for 605 Consulting. I asked her in an email if she could elaborate on the kind of work her company did and how she came to hear about 605 Consulting’s water and sewer design projects for the provincial government. My queries went unanswered. Her social media accounts, however, provided valuable information. Apart from professing her support for the ANC on her Facebook page, Sothoane’s various social media posts revealed that, like Igo Mpambani, she was in close proximity to Magashule on numerous occasions. I managed to determine this by comparing the location details of her posts to Magashule’s diary and to media reports detailing his activities.
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