Beleaguered businessman Sandi Majali is desperately trying to avoid facing trial for corruption and money laundering.
The charges flow from Majali's entanglement with a web of business and political interests in KwaZulu-Natal, the machinations of which have already resulted in the launch of three criminal investigations.
Case One
This is the case involving Majali, who shot to public prominence over his role in the Oilgate saga that saw him "donate" R11-million of PetroSA money to the ANC.
Now Majali is accused of laundering bribe payments made by businessman Jabulani Mabaso to a senior KwaZulu-Natal official, Pamela Zulu, for her to secure Mabaso a huge contract to supply school stationery. In May 2005 Mabaso's company, Indiza Infrastructure Solutions, and another company won a tender from the KwaZulu-Natal education department. Zulu, then with the provincial treasury, sat on the evaluation committee that recommended Indiza. A two-year tender award was confirmed in December 2005. Over an 18-month period Indiza charged the department, where Zulu was chief financial officer, approximately R449-million. A charge sheet against Zulu and Mabaso claims invoices were inflated to the tune of R197-million.
The National Prosecuting Authority (NPA) alleges a bribe was paid by Mabaso to Zulu via a number of Majali's companies.
According to the NPA:
* On April 21 2006 Mabaso deposited R2,5-million in the trust account of Majali's attorney. About R170 000 was transferred four days later to a Honda dealership.
* On May 12 2006 a further R200 000 was deposited into Zulu's account from another Majali company, Imvume Paymaster Services.
* At about that time Majali allegedly entered into an agreement with Zulu for Imvume Paymaster Services to buy shares she supposedly held in another Majali-related company, New Era Capital. She was to receive R4-million, with an initial down payment of R200 000.
In various court papers Majali maintains this represented bona fide repayment for consulting Zulu had done on proposed New Era projects. He explains the payment from Mabaso as an investment in one of his projects and produces a letter of invitation to Mabaso dated February 20 2006 to back this up. The NPA maintains this was all a sham to disguise the bribe payments. In court papers the prosecutor alleges that the letter to Mabaso was not found during raids on Majali and Mabaso and is a fabrication. The NPA also claims that New Era Capital was dormant and had no value.
For the better part of a year Majali has fought desperately to avoid arrest, launching a slew of high court actions and petitioning both Hawks boss Anwa Dramat and then-acting National Director of Public Prosecutions Mokotedi Mpshe to throw out the case. Both declined. Last week he won a reprieve from the South Gauteng High Court. The court suspended the decision to prosecute him pending the outcome of another Majali court challenge involving the same matter. Majali launched an application to review the decision to prosecute him in the North Gauteng High Court. The outcome, expected only next year, is dependent on the court accepting Majali's argument that the Promotion of Administrative Justice Act is unconstitutional.
The Act enables judicial review of government decision-making but specifically excludes decisions to prosecute.
Mabaso and Shabalala
Majali's alliance with Mabaso and Zulu ties him into another scandal involving provincial head of treasury Sipho Shabalala and a Uruguayan businessman, Gaston Savoi, that has prompted two ongoing criminal investigations. In an affidavit provided to Majali Mabaso raises the issue of his relationship with Shabalala. Querying why his relationship with Majali is singled out for investigation, Mabaso notes: "Indiza was involved in a number of other business … transactions during April 2006 … For example, Indiza agreed to advance a loan to Blue Serenity investments in the sum of R12-million." The directors of Blue Serenity were Sipho Shabalala and his wife Beatrice. Shabalala signed the loan agreement with Mabaso and Mabaso also became a 30% shareholder in an initial joint venture.
Majali also notes that during the same tender process in which Indiza was implicated another similar contract was awarded to EduSolutions, a company that has attracted negative media scrutiny in the past. He points out that Zulu is accused of inflating one score for Indiza - awarding the company four points when the maximum possible was two - and that she made the same "error" in regard to EduSolutions without attracting a criminal investigation.
The M&G understands Zulu is a friend of Shabalala, while Mrs Zulu's ex-husband works in the office of the chief executive of African Access, EduSolutions's parent company.
Case Two
But Shabalala has not entirely escaped scrutiny; his relationship with the mysterious Gaston Savoi is under criminal investigation, though he has yet to be charged or interviewed.
The investigation relates to a R1-million donation to the ANC allegedly solicited by Shabalala from Savoi, which is suspected of being a kickback for the award of a R44-million contract by the provincial cabinet for the supply of 20 water treatment plants. Savoi's company, Intaka, supplies water purification and medical equipment, including medical gas generators and portable scanners.
He was introduced to the KwaZulu-Natal government with what appeared to have been high-level political backing. According to a leaked affidavit by the investigating officer it was then-trade and industry minister Alec Erwin who first expressed interest in Intaka's products. The affidavit says it was decided that Rafiq Bagus, a protégé of Erwin's, "would facilitate the process of contacting the relevant persons in the KZN provincial government and Trade and Investment KZN". The investigating officer alleges Shabalala was also involved in negotiations. Meanwhile, as early as April 2004, Savoi formed a company, Skyros Medical Supplies, with Shabalala's wife, Beatrice.
He was clearly covering all bases. In a separate affidavit Savoi states that he was advised that Intaka should become BEE compliant: "To this end a company, Intaka KwaZulu-Natal, was registered. As a result of disagreement between various possible shareholders and Intaka's inability to procure further substantial orders for water purification plants, this company remained dormant." Intaka KZN's initial directors included Bagus and ANC provincial secretary Sipho Gcabashe.
According to the investigating officer's affidavit, Savoi alleges that Shabalala raised the possibility of a party-political donation fairly early on. It is alleged that after the award of the tender Savoi raised the matter again. Shabalala allegedly indicated he would be sent an invoice against which he should make payment of the donation.
An invoice for R1 053 000 was received from law firm Kuboni & Shezi purporting to request payment for legal work done. Savoi paid the amount and the provincial ANC has subsequently confirmed receipt of the donation, which, it claimed, was made in "good spirits" and not linked to any tender. Shabalala has thus far, through his lawyer, declined to respond to media questions about the incident.
Case Three
Savoi was also a witness in the aborted case against former KwaZulu-Natal health minister Peggy Nkonyeni, who allegedly received a gratuity for the purchase of a mobile ultrasound scanner through Savoi's company. Charges were provisionally withdrawn against Nkonyeni and two others in August, when it is understood another key witness suffered a stress-related breakdown and was unable to testify.
Source: Mail & Guardian
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