State Capture 1/3: The rot reaches deep into Lowveld forests

Harvey Theron’s predecessor refused to award the multimillion rand tender to Analytical Risk Management (2RM), which was run by Theron’s business partners, including John Duarte, the former husband of the ANC deputy secretary-general, Jessie Duarte.

Theron also failed to declare a conflict of interest. This emerged from Lowvelder’s investigation into the state capture of the Lowveld’s state-owned plantations.

Sunday Times reported in April last year that 2RM and Theron’s company, Prospero Digital Agency, are subsidiaries of Vumela Holdings, run by John, his son Yusha Duarte and Malcolm Mabaso, the political adviser to Mosebenzi Zwane, minister of mineral resources.

According to the Sunday Times article, 2RM was listed as a subsidiary on the Vumela Holdings website, but the website was taken down after Business Times started asking questions.

It was described to Lowvelder how the chairman of Safcol, Lungile Mabece, indicated at a board meeting in October 2015 that he wanted a due diligence investigation into the company’s performance and financials. This was during a strategy meeting at Safcol’s head office in Centurion.

Theron, then a board member, stood up at the meeting and presented the board with three tenders for consideration.
According to a Lowvelder source, one quote was for R100 000, another for R2 million and the third, one he suggested the board should approve, for R13 million.

No decision was taken on the day.

A month later Theron presented new quotes and handed out spreadsheets with the quotations for the forensic investigation. In terms of the Public Finance Management Act (PFMA), a board member is not permitted to handle quotations. The amounts involved also needed to be handled through a proper tender process.

Theron proposed that the most expensive one, from 2RM, be accepted.

Members of the executive committee who were present told him that any irregular expenditure of this magnitude could only be approved by the CEO, Nomkhita Mona.

“Theron and his board were again warned and told that the Auditor-General would note such a move as an irregular expenditure that could result in criminal charges being brought against the guilty parties,” a source present at that meeting told.

The board then referred the matter to minister Lynne Brown for approval after Mona refused to sign it off.

Brown did not respond to Lowvelder’s written questions. Her spokesman told Sunday Times last year the matter was referred back to the board, as it was an operational matter within the competency of the board.

Mona and her chief financial officer, Zoliswa Mashinini, refused to sign the contract with 2RM and both of them resigned on December 15, 2015.

Theron was appointed acting CEO and two days later he approved the contract.

According to the spreadsheet presented to the Safcol board on October 29, 2015, 2RM claimed to be the only security service provider which was SABS-accredited for the rendering of high-risk solutions.

It was also “the only security service provider on the continent with its dedicated 24/7 forensic control and command centre called ‘Zero Control'”.

According to Theron’s written response to Lowvelder, the appointment of 2RM was discussed at length on numerous occasions in parliament as well as with the Auditor-General. “All information regarding the legitimacy of the 2RM appointment can be obtained from said organisations,” said Theron.

John could not be reached for comment.

Theron is close to Yusha and Mabaso: Theron and Yusha were best men at Mabaso’s wedding in 2015.

In March last year the investigative unit amaBungane published an extensive breakdown of state capture under the heading: “The Gupta-owned enterprises”.

Among the revelations were:
• Mabaso’s business and personal life was intertwined with that of the Duarte family.

• He was previously managing director of John’s company, Vumela Holdings. John was also a director of Premium Security and resigned on the same day as Mabaso.

• The Duartes’ daughter is married to Ian Whitley, the adviser to former four-day finance minister, Des van Rooyen.

• Vumela seems to be a one-stop security, consulting and lobbying business. Among its clients are Eskom, City Power, Transnet, the State Information and Technology Agency, Vodacom and PetroSA.

 State Capture 2/3: Family loses millions after refusing to sell

State Capture 3/3: Relentless pressure capturers’ chief tactic

 

  AUTHOR
De Wet Potgieter
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