Juju’s cousin also linked to VBS

R5.9-mil­lion paid from Floyd’s brother to Malema’s rel­a­tive

Mail & Guardian - - News - Than­dux­olo Jika and Sa­belo Sk­iti

Aseries of sus­pi­cious pay­ments, em­a­nat­ing from the heist of the VBS Mu­tual Bank, link Eco­nomic Free­dom Fighters MP Floyd Shivambu’s brother Brian to a cousin of EFF leader Julius Malema.

The pay­ments, to­talling more than R5-mil­lion, were made be­tween June 2017 and Fe­bru­ary 2018 from Brian Shivambu’s Sgameka Projects to Mahuna In­vest­ments, a com­pany solely owned by Malema’s cousin, Mat­sobane Phaleng.

The Mail & Guardian has es­tab­lished this from three in­de­pen­dent sources.

The pay­ments range be­tween R1-mil­lion from June 9 last year to R500 000 on Fe­bru­ary 5 this year.

Brian Shivambu’s links to the VBS heist first emerged ear­lier this month when the South African Re­serve Bank’s re­port, by Terry Mo­tau SC, re­vealed he had re­ceived about R16mil­lion in “gra­tu­itous” pay­ments, which Mo­tau said had “no law­ful cause what­so­ever”. The pay­ments be­tween Sgameka and Mahuna are de­rived from these pay­ments.

Brian Shivambu has de­nied re­ceiv­ing the money il­le­gally, claim­ing he was paid by Vele In­vest­ments for con­sul­tancy work he had pro­vided. Vele In­vest­ments is one of the ma­jor share­hold­ers in VBS. Ac­cord­ing to Mo­tau, it is among the com­pa­nies that, with its as­so­ci­ates, looted R936 669 111 from the bank.

The re­port has been re­ferred to the Hawks and the Na­tional Pros­e­cut­ing Au­thor­ity for crim­i­nal in­ves­ti­ga­tion and pros­e­cu­tion.

The M&G un­der­stands that the pay­ments made by Brian Shivambu to Phaleng and the pay­ments he made to his brother, Floyd, are be­ing in­ves­ti­gated by the banks whose ac­counts were used to trans­fer the money flagged by Mo­tau.

In all, Brian Shivambu, through Sgameka, paid Phaleng’s Mahuna In­vest­ments R5.9-mil­lion in nine trans­ac­tions of vary­ing amounts.

It is un­clear what the pur­pose of the pay­ments were. Both de­clined to com­ment on whether they had any con­trac­tual agree­ments and what ser­vices were ren­dered.

This week Brian Shivambu said: “I’m tak­ing le­gal ac­tion against the VBS re­port and wouldn’t want to re­spond to ques­tions about is­sues that will be un­der court process. Please al­low me to deal with this mat­ter through the court pro­cesses.”

Phaleng also de­clined to com­ment on the pay­ments, say­ing his com­pany was not im­pli­cated in Mo­tau’s re­port.

“Af­ter care­fully read­ing of the VBS re­port and con­sult­ing with our team, we couldn’t find our name im­pli­cated in what­ever way pos­si­ble, and we wish not to get in­volved. I will ad­vise that you send all your in­quiries to Sgameka,” Phaleng said.

At a press brief­ing last week, Malema ral­lied be­hind his lieu­tenant, say­ing Floyd Shivambu had pro­vided the party with his bank state­ments and the party could not find any­thing un­to­ward. Pay­ments made by Brian to Floyd were of a kind that were nor­mal be­tween sib­lings, he said.

Speak­ing to the M&G from Rwanda on Thurs­day Malema said he did not know any­thing about the pay­ments nor any busi­ness rela- tion­ship be­tween his cousin and Shivambu’s brother. “I am not in­volved in this thing of Mat­sobane, he must an­swer for him­self.”

“Yes he’s my cousin, but we are not close ... My grand­mother had nine kids ... I have many cousins and I am not close with all of them.”

He pre­vi­ously told the me­dia that peo­ple with ev­i­dence that the EFF had ben­e­fited from VBS should ap­proach the party.

A search of the South African Rev­enue Ser­vice’s (Sar’s) value-added tax ven­dor search por­tal showed that nei­ther Mahuna In­vest­ments nor Sgameka Projects were reg­is­tered for tax. Sars had not com­mented at the time of go­ing to print.

Sars reg­u­la­tions re­quire a com­pany with a turnover of more than R1-mil­lion an­nu­ally to pay tax.

Mahuna In­vest­ments’ busi­ness is de­scribed as “not re­stricted” on its com­pany regis­tra­tion forms. A Google search for the com­pany turned up noth­ing ex­cept its regis­tra­tion de­tails.

Phaleng made head­lines in 2012 when con­tro­versy erupted in Lim­popo about a group of po­lit­i­cally con­nected peo­ple who were awarded school-feed­ing scheme con­tracts in var­i­ous dis­trict mu­nic­i­pal­i­ties.

It was al­leged then that the in­di­vid­u­als, which in­cluded an­other of Malema’s cousins, Tshepo Malema, and his then body­guard and se­cu­rity ad­viser, Jabavu Oli­fant, had not de­liv­ered food to schools. The con­tract lapsed in 2013.

Phaleng, through his com­pany TsaTshidi Trad­ing, was awarded a con­tract in 2011 worth R5.51-mil­lion to de­liver food to the Sibasa Se­condary School in Tho­hoyan­dou. Tshepo Malema, who is close to Julius, had two con­tracts, one for R5.22-mil­lion to de­liver food to the Vhuronga Se­condary School in Tho­hoyan­dou and one for R3.33-mil­lion for the Pi­eters­burg Pri­mary School.

At the EFF press con­fer­ence, Floyd Shivambu said his brother would pay back the money he re­ceived from Vele In­vest­ments if he was ad­vised to do so by law en­force­ment agen­cies.

Brian Shivambu has said he was not given an op­por­tu­nity to give Mo­tau his side of the story.

The party found it­self in an un­en­vi­able po­si­tion this week when Par­lia­ment de­bated the VBS scan­dal. Floyd Shivambu was heck­led with cries of “pay back the money” from all benches. The call was made fa­mous by the EFF in its ef­forts to force for­mer pres­i­dent Ja­cob Zuma to ac­count for state-funded non­se­cu­rity up­grades at his Nkandla res­i­dence.

Dur­ing the de­bate, DA MP Phumzile van Damme said: “We can no longer have our peo­ple mis­led by wolves in wool dyed red, pro­claim­ing to care about them. They must be ex­posed for who they are — cor­rupt eatists.”

Two weeks ago, the M&G re­vealed how Floyd Shivambu in text mes­sages pro­vided a busi­ness ac­count num­ber for his brother’s other com­pany, Grand Aza­nia, to a busi­nessper­son at the cen­tre of Pub­lic In­vest­ment Cor­po­ra­tion in­ves­ti­ga­tions, Lawrence Mu­laudzi.

The same ac­count num­ber has also been linked to sus­pi­cious VBS pay­ments. Mu­laudzi told the M&G at the time that he had paid Grand Aza­nia for ser­vices ren­dered.

Absa, at which Mahuna banks, said: “We are al­ways con­scious of our obli­ga­tions in terms of the Fica [Fi­nan­cial In­tel­li­gence Cen­tre Act] and other lo­cal and in­ter­na­tional law en­force­ment obli­ga­tions to com­bat fi­nan­cial crime, and in­form or co­op­er­ate with the rel­e­vant au­thor­i­ties when­ever this is re­quired.”

One of Brian Shivambu’s banks, First Na­tional Bank, said it was aware of the VBS re­port and that it “com­plies with all anti-money laun­der­ing and reg­u­la­tory prac­tices in South Africa” and “the bank is cur­rently re­view­ing the re­port”.

A bank­ing source said that in­ex­pli­ca­ble move­ments of money can be in­ves­ti­gated us­ing the con­cept of ul­ti­mate ben­e­fi­cial own­er­ship, which fi­nan­cial in­sti­tu­tions and au­thor­i­ties use to trace il­licit flows of money.

Ul­ti­mate ben­e­fi­cial own­er­ship dis­tin­guishes be­tween le­gal own­er­ship of an en­tity through which money flows and ac­tual con­trol of the en­tity. This is in ac­cor­dance with a guid­ance note com­piled by the Fi­nance In­tel­li­gence Cen­tre on the im­ple­men­ta­tion of Fica.

We can no longer have our peo­ple mis­led by wolves in wool dyed red, pro­claim­ing to care about them

Fam­ily af­fair: Mat­sobane Phaleng (left), cousin to Julius Malema (sec­ond left), re­ceived pay­ments from Brian Shivambu’s com­pany. Tshepo Malema (sec­ond right) and Phaleng got con­tro­ver­sial feed­ing scheme con­tracts

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