“Alliance Mining’s proposed BEE deal was announced by the company on July 14 2009. It was described as a “broad-based” deal, yet it would have resulted in Phosa becoming the company’s largest shareholder.
“Phosa’s close friend, Matilda Gaboo, who had no prior involvement in Alliance Mining, would have ended up with more shares than the company’s entire combined workforce.”
Julius Cobbett, Did Mathews Phosa’s ANC presence lead the IDC to break its own rules Moneyweb, 16 April, 2010
Mathews Phosa’s recent Damascene conversion, his sudden realisation that corruption is destroying the Rainbow Nation, has elicited some scepticism.
Piet Rampedi in The Star and Ranjeni Munusamy on the Daily Maverick website both pointed out how commonplace it has become for ANC politicians to discover their conscience and their concern for the public weal once they had retired and their pensions were safely in the bank or once they had not made it onto the latest slate.
I was interested for another reason.
Phosa’s acknowledgment of the obvious, that the ANC could no longer blame apartheid for its failings, that it was self-destructing through greed and that the Nkandla ‘residence‘ tenders seemed ever so slightly dodgy came less than three weeks after Stuart Theobald of Business Day applied to the South Gauteng High Court for access to the forensic information relating to the collapse of Alliance Mining, a JSE-listed company that was placed in liquidation in 2010.
Nine months ago Theobald used the Promotion of Access to Information Act to obtain the documents but the liquidators showed their contempt for the transparency promised by the ANC in 1994 and refused to provide them.
Alliance Mining … “was chaired by African National Congress treasurer-general Mathews Phosa and, weeks before its collapse, it received a R120m loan from the Industrial Development Corporation. It went into liquidation after announcing that its previous financial results had overstated profits by at least R230m.”
Theobald has said that there seems to be an absence of both political and prosecutorial desire when it comes to exposing or curbing corruption and death threats to those who do have that desire.
Now this is where it gets interesting.
By all accounts Phosa is a close friend of Matilda Gaboo, a former SABC executive and on 14 October 2009 The Times published the following story:
SABC loses bid to get leaked documents [Judy Lelliott]
The Sunday Times has won a legal battle against the SABC in which the public broadcaster wanted documents leaked to the paper returned.
The leaked report was the basis for a story published by the paper detailing corruption amounting to millions of rands.
The SABC took the newspaper to the South Gauteng High Court in Johannesburg over the article about former international programme acquisition manager Matilda Gaboo, who reportedly spent over R40-million on programmes that were never aired, among other wasteful expenditure.
Judge Nigel Willis said the SABC had no basis in law to have the report restored to it and ruled in favour of the Sunday Times, with costs.
“I do not see how the delivery by the Sunday Times of a copy of the report, at this stage, can protect the SABC’s interest in confidentiality,” he said.
Counsel for the Sunday Times, Wim Tengrove argued that handing back the document would reveal the source.
The SABC did not deny this, but maintained the reason for recovering the report was to preserve its rights to confidentiality and privacy.
“The horse has bolted. That, it seems to me is the heart of the matter,” Willis said.
This, in turn, related to the Sunday Times front page lead on 22 March 2009 and I have re-typed it because it is not available on the internet
SABC boss blows millions on dud shows. Executive also stands accused of handing out contracts to friends [Rowan Philp]
A former SABC executive is under investigation for allegedly wasting tens of millions of rands on useless programmes and giving contracts to friends – including a supplier who claimed to be the father of one of her children.
Matilda Gaboo, head of the broadcaster’s international programme acquisition division until May last year (2008), is alleged to have wasted at least R49 million in two years in over-payments and TV programmes that were not screened.
It has been established that the investigation into Gaboo, 45, was triggered after she dumped a bag containing R121 584 cash for business-class air tickets for a close friend, ANC treasurer-general Mathews Phosa and her child on the desk of a travel agent.
The Sunday Times is in possession of a preliminary internal audit, which investigated allegations of “mass corruption and gross mismanagement” during Gaboo’s three-year tenure in the department.
It found R38.7 million in wasted money as of September last year. A second audit in the SABC’s ongoing investigation, produced by legal firm Cliffe Dekker Hofmeyr and Comperio Forensics, puts the irregular and wasted expenditure under Gaboo at R49-million as of this week.
This report, presented to the audit committee on Wednesday warned that the amount “could increase” because only 38 of 165 of Gaboo’s deals had been analysed.
With the SABC already projecting a R784-million deficit, experts said that a full audit might show that a single manager swelled the broadcaster’s overdraft by more than a R100 million.
A board member this week described the extent of the wastage as “a colossal scandal.”
The audits reveal how Gaboo:
• Awarded R22 million in deals to a programme supplier Irfan Bux, a man who, according to the audit reports, claims to be the father of her six-year old daughter;
• Paid Bux R652 800 for a wildlife series called Be the Creature, although he had paid just R81 600 for it and;
• Paid UK supplier Mark Deitch more than R500 000 for consulting services and then gave him a contract for $657 000 on the deal.
The auditors said Gaboo appeared to have had such a close relationship with Deitch that she reminded him to get her “Clarins day and night cream” at the duty-free shop and to pick up UK football jerseys for her.
The documents detail how Gaboo had regularly bought programmes without consulting the SABC’s various channels on whether they needed them or had time slots to flight them.
Further details include her buying 173 titles representing thousands of episodes which have never been shown and whose licences have now expired, from movies such as Austin Powers to children’s programmes like Blob Family.
On Friday, Phosa confirmed that Gaboo had bought the airline tickets on his behalf, but said the statement in the audit reports that it was suspicious was incorrect and “defamatory”.
Audits found that on May 11 2006, “Ms Gaboo paid R121 584 in cash at Airwave travel for two business-class return tickets to Los Angeles. (We are) of the opinion that this is a suspicious transaction. It should be reported to the Financial Intelligence Centre.”
Said Phosa: “I remember very well she came to us for a loan, and she got that cash from the company … I was going on business myself.”
It is unclear why Gaboo would have taken a loan from Phosa’s company to pay for his airline ticket.
Gaboo now heads Eveni Investments, a company owned by Phosa’s group.
Her lawyer, Nicqui Galaktiou, said her client had not been given a chance to respond to the findings of the audits, despite numerous requests.
She accused the Sunday Times of “ambushing” and “sabotaging” her client “with allegations that she could not deal with in a vacuum and without access to the report.”
In a letter to SABC board chairman Kanyisiwe Mkonza, Galaktiou said Gaboo had been subject to a 10-hour investigation by auditors on September 25 2007.
The letter states that the conduct of the SABC had undermined her credibility and has adversely impacted on her ability to carry out her work and professional responsibilities and duties.
Broadcast, Electronic Media and Allied Workers’ Union president Hannes du Buisson said that they had warned about Gaboo’s spending three years ago.
“At the time, there were many complaints from buyers at M-Net that they couldn’t compete for programmes because Matilda had pushed the prices (so high).”
An SABC board member said: “What makes it worse is that the board has been calling for action on this since 2007, and has simply been ignored.”
Now “we’ve taken a resolution to recover whatever we can of the money lost, and to take criminal, civil and legal action against those responsible.”
SABC spokesman Kaizer Kganyago said the board had in 2007 instructed then group CEO Dali Mpofu to take action, but that he felt the charges needed to be investigated fully in order to protect Gaboo’s labour rights.
He said it was inaccurate to label the label the programmes as “un-needed” because expiring contracts were common. “This is what we call in the industry ‘the dogs and the fleas’.”
Deitch has denied a conflict of interest but said: “I did see a large amount of wastage at the SABC.”
This story intrigued me because Gaboo seemed to have followed in the footsteps of two of her predecessors at the SABC, Molefe Mokgatle and Thaninga Shope – television and corporate communication chief executives respectively – who in March 2000 were alleged by KPMG to have depleted the SABC’s R200-million commissioning budget by over-invoicing programme distributors and flouting the broadcaster’s commissioning procedures
The matter was hushed up by the SABC, it was never referred by the Corporation to the police for investigation and no attempt was made to recover the money.
Shope was, thereafter, deployed to NEPAD and then the Department of Foreign Affairs becoming successively, South Africa’s ambassador to Gabon and, recently, Venezuela. Mokgatle went into the private sector.
On would have thought that, after Gaboo left the SABC under such controversial circumstances, Phosa would have avoided any association with her as potentially detrimental to his political career but, shortly thereafter, she was pictured on the Alliance Mining website with Phosa, both wearing hard hats, on a tour of inspection of the mine. It seems that she had no previous experience in the mining industry so it is difficult to understand what value she brought to this endeavour.
Then the news broke that, seemingly without due diligence, the Industrial Development Company had invested R120 million (your money and mine) into Alliance Mining and that the money had simply disappeared without trace.
Three and a half years later the IDC, with its strong emphasis on Broad-based Black Economic Empowerment, has still not provided an answer and there is no reference to this apparently inconsequential loss on its website. We should thus be grateful to Business Day and Stuart Theobald for seeking to ascertain on behalf of law abiding citizens what happened to this money.
Four and half years later we also do not know the answer to what happened to the potentially R100 million that was lost during the tenure of Mathews Phosa’s close friend, Matilda Gaboo, while she was at the SABC.
The person who can enlighten us on the latter question is our beloved and revered President Jacob Zuma, affectionately known as ‘Number 1’.
On 5 May this year the Sunday Independent revealed that the Special Investigation Unit (SIU) had handed a report into the wanton looting, wasteful expenditure, and gross incompetence that had characterised the Dali Mpofu, Eddie Funde, Christine Qunta and Snuki Zikalala era at the SABC to President Zuma.
Six months later it seems as though he has yet to read the report and it remains to be seen whether he will reveal its findings before next year’s general election in April.
In the interim, it would seem that South African society must rely on investigative journalists like Julius Cobbett and Stuart Theobald to raise the alarm and to seek answers about the pervasive and systemic ANC corruption which, of late, seems to be causing politicians like Mathews Phosa so much concern.