Editorial

President Zuma is White racists' stereotype Black


Undoubtedly the worst feature of the Zuma era has been the intrusion of politics into the criminal justice arena. Most recently, Zuma's appointed Police Commissioner, Riah Piyega has stopped investigation of alleged criminal plundering of union pension funds by Cosatu appointees – because of the "ramifications".

Quite some ramifications when you consider that Collin Matjila is one of the suspects to be investigated. And who the hell is Collin Matjila, you say? Read on.

A fascinating statistical analysis of current South African trends in race relations (elsewhere in this issue) shows that, while race relations continue to improve, there is a curious deviant statistic: across all races but particularly among whites, a growing minority of South Africans have, in the Zuma era, come to think that maybe apartheid was not that bad.

There are no doubt several reasons but one seems fairly obvious: Nelson Mandela was a contradiction of most white South Africans’ race prejudices. He was smart, a man’s man, had the generous warmth that comes with self-confidence, and that rare magical something, charisma. He was someone they admired and wanted to know. He allayed all their fears.

Jacob Zuma is the reverse. If anything, he is the racist white’s black stereotype: tribal; ill-educated; arrogantly, often stupidly, dishonest. Untrustworthy. Sexually and financially irresponsible.

BEE, a pseudonym for paid incompetence and the greed of the politically well connected, has become the trademark of his government (see Mines for the taking in this issue). Those who had hoped for a non-racist future feel betrayed.

Perhaps the worst feature of the Zuma era has been the intrusion of politics into the criminal justice arena. Decisions to prosecute or not to prosecute serious cases are no longer taken to contain crime and serve justice; now they almost invariably serve the agenda of some political or criminal faction (often indistinguishable).

Shortly before going to press, Noseweek was presented with the latest such case:

On 17 June Advocate Feroze Latif of the NPA’s Asset Forfeiture Unit sent a memo to Director of Public Prosecutions Andrew Chauke informing him that he had received two CDs containing reports on the mismanagement and parlous state of the Bosele National Provident Fund (which provided death benefits for families of employees of the erstwhile Bophuthatswana). The reports, compiled by inspectors of the Financial Services Board (FSB) in 2010, had been referred to the Registrar of Pensions and various other state agencies.

The FSB reports contained evidence of criminal conduct through mismanagement, maladministration, breach of fiduciary duty and conflict of interest, said Latif. He lists fraud, falsification of documents, corruption, money laundering and contraventions of various provisions of the Pension Funds Act.

Latif’s letter does not reveal when or from whom he received the CDs, nor offer explanation as to why the NPA is only taking action three years after the reports were compiled. But he notes that the FSB had already referred the matter to the Directorate of Priority Crimes, in May 2012 – with the reference IR2012/04/08 – where it appears to have died a political death.

Noseweek has also been informed that in July 2014 the long-neglected docket was duly picked up by the office of Lieut-General Sithole, Deputy Commissioner of Police. A month or two later he assigned some senior policemen to the case, with instructions to “make things happen”.

But in November, Sithole received a call from Police Commissioner Riah Phiyega asking why the case was being investigated without her knowledge. He was ordered to “cease all further investigations” until she had established all its ramifications.

Its ramifications may just relate to the fact that all the crimes listed involve Cosatu, the ANC’s biggest alliance partner.

The severity of the matter emerges from Latif’s summary of the evidence: In 2005 the provident fund’s board of trustees was reconstituted without proper elections. When, the fund’s administrators, Price Forbes, expressed concern about trustee non-compliance, the board of trustees, on advice from their attorney, Thabo Thipa (then, also on the FSB’s licensing committee), accused Price Forbes of acting in “utmost bad faith” and terminated their services.

In a “flawed and irregular” process, the new trustees appointed two Cosatu-owned companies to perform the administrative job previously carried out by Price Forbes – at six times the fee. They also appointed various third-party service providers who, the FSB inspectors say, “took advantage of the general lack of knowledge, skill and/or integrity of members of the board to secure lucrative service contracts at excessive rates, while little or no service was rendered”.

Latif explains that roughly R145m paid out by the fund in inflated fees was laundered to benefit “other entities and individuals”. As a result, “the FSB was of the view the fund may no longer be viable and its dissolution should be considered”.

The FSB report concluded that the Cosatu company Kopano Ke Matla Financial Services (KKMFS) had conducted an unapproved pension fund administration business in contravention of the Pension Funds Act. They found it “peculiar” that, despite the tens of millions in fees paid to them by the provident fund, come May 2011, Kopano Employee Benefits (KEB) and KKMFS were having liquidity problems: KEB had only R7,500 in its bank account, while KKMFS had only R170,000 at its disposal. Collin Matjila was chairman of both.

How had Cosatu and its auditors failed to notice the disappearance of R100 million or more?

Under the heading “Unusual and suspicious transactions”, the FSB inspectors record, inter alia, that of the R123.9m received by Kopano entities from the provident fund, R56.3m ended up in bank accounts connected to Nasieyah Basadien, the Kopano employee who answered to Matjila, and that Basadien and her husband had, in turn, made large payments to other officials and third parties. These included R1.33m to Summerlane, a company controlled by Matjila, who later described the payment as “personal commissions”.

They went on to report that “in about October 2009” the fund’s consultant Wesley Kgomo – who was routinely paid at excessive rates, or for services not provided – had written to Cosatu general secretary Zwelinzima Vavi about Kopano’s “malfeasance” and sent Matjila proof of incriminating evidence in his possession. (At the same time Kgomo was trying to extract a generous “severance package” from the fund or Kopano.)

Matjila assured the FSB that a subsequent R2m payment to Kgomo – with Kopano and Cosatu’s approval – was not part of a settlement made to avoid reputational damage they feared should the dispute have gone to court. Matjila told the inspectors it was “almost an ex gratia offer for Mr Kgomo to go away”.

Vavi now tells Noseweek that he first learnt of the FSB inspection of Kopano in April 2010 when, in the run-up to the Cosatu congress, he met the head of the FSB, Dube Tshidi, and was given a copy of the first FSB report.  A strange way of doing things, we’d say.

Vavi now tells Noseweek that in 2013 Cosatu took the FSB’s report on Kopano up with their lawyer, whose advice was that criminal charges should be laid “against all who’d helped themselves”.

Despite all these revelations, Matjila’s activities at Kopano have not adversely affected his career in any way. He was appointed an Eskom board  member in 2011 and has been chairman of its tender subcommittee ever since. (The Mail&Guardian’s amaBhungane investigative unit has reported that, as head of a tender committee, he intervened in a R4bn Koeberg steam-generator contract in favour of French nuclear company Areva, an issue now the subject of a court review.

On April 1 last year Matjila was appointed Eskom’s interim CEO for a six month period. Num and the DA immediately objected, both citing conflict of interest and the Kopano scandal. Six months later the M&G reported that Eskom was in uproar because Matjila had allegedly disregarded internal legal advice and approved a budget-busting R43m sponsorship of New Age business breakfasts. The M&G explained that Matjila was close to the Guptas (owners of the New Age) because of deals they had done with Kopano and that a senior union leader had said Matjila enjoyed protection because he was a member of Zuma’s inner circle.

Last year Cosatu commissioned a forensic report by auditors SizweNtsalubaGobodo into allegations involving Kopano. The auditors’ report, finalised in February 2014, also probed the sale of Cosatu’s old offices and purchase of new headquarters. It found Kopano had acted for Cosatu and that a task team led by Matjila negotiated both transactions. It found he had sold the old property for R9.5m below value and paid R6.3m above value for the new one.

Disgusted, Vavi exclaimed in an email: “Don’t rub in the salt! We have been screwed by these fellows.”

Matjila remained as CEO of Kopano companies until March 2014 when he left to become Eskom’s interim CEO.  Shortly before, he had been asked by Cosatu to explain the suspicious flow of money to him and other Kopano employees, but he left without doing so.

Terrifyingly, he is also Chairman of the National Energy Regulator  of SA and CEO of the Command Centre for Emergency Reconstruction.

Vavi told Noseweek that, at Cosatu’s request, on 17 September 2014, the FSB’s Dube Tshidi had come to Cosatu House. “He came and we asked him why the police were not pressing charges.” Curiouser, and curiouser.

Vavi  told the M&G he regrets that politics prevented action on the FSB and Cosatu House matters. True, but no excuse.

The Editor

To see Adv. Latif's memo CLICK HERE

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