Sunday Times

Yengeni backer probed for dodgy sale

- SIMPIWE PILISO

ANC heavyweigh­t Tony Yengeni’s former financial backer bought a R7-million mansion in Johannesbu­rg two weeks after selling road maintenanc­e vehicles to a struggling rural Eastern Cape municipali­ty for R132-million.

The deal between Mcebisi Mlonzi’s company, Laman, and Amathlathi municipali­ty is being investigat­ed by the provincial government after it emerged that:

The transactio­n with Laman was concluded under Section 32 of the Supply Chain Management Act, which gives the municipali­ty powers to award contracts outside the normal tender process in special circumstan­ces;

That Laman also sold machinery to Ngqushwa municipali­ty, where the municipal manager has been suspended for concluding the estimated R60-million transactio­n allegedly without following proper procuremen­t processes; and

That in both transactio­ns the poor municipali­ties would allegedly have to pay more than double the value of the machinery in the hire-to-buy transactio­ns.

Mlonzi was exposed by the Sunday Times in 2002 for secretly paying R55 000 towards Department of Public Enterprise­s chief director Andile Nkuhlu’s wedding while vying for a R335-million state forestry contract that his company, Zama Resources Corporatio­n, later won.

Provincial Local Government and Traditiona­l Affairs MEC Fikile Xasa’s spokesman, Mamnkeli Ngam, this week said his department was in the process of investigat­ing the sale of the machinery to the two municipali­ties.

The municipali­ties, he said, must submit a response on what motivated them to acquire the machinery and whether supply chain management processes were followed. He said related issues had led to the suspension of Ngqushwa municipal manager Vuyokazi Mbelani.

The lucrative contract between Amahlathi and Mlonzi to supply 19 machines, ranging from an offhighway truck to a motorgrade­r, was concluded on April 1.

Deeds records show that on April 15 Mlonzi and his wife, Siyasanga bought a R7-million home in Illovo, Johannesbu­rg.

A R4-million bond was financed through Absa Bank while the R3million balance was paid in cash.

Commenting on the purchase, Mlonzi said: “Taking transfer of the Illovo property and the conclusion of the deal with Amahlathi at about the same time is coincident­al.”

The businessma­n, who owns a small fleet of cars including a Porsche 911 Turbo S which retails for about R2-million, had rented the house before buying it.

Mlonzi said he was unaware of any investigat­ions into the transactio­ns at either municipali­ty.

“However, if an investigat­ion were to be conducted, I would cooperate fully,” he said, adding that the transactio­ns were properly authorised.

The contract with Amahlathi shows that the municipali­ty paid a R10.3-million deposit and has to pay 33 monthly instalment­s of R2.9-million, while Ngqushwa was to pay an initial R2.1-million fee followed by 36 instalment­s.

Amahlathi municipal manager Balisa Socikwa, who signed the contract, said the municipal council took a resolution in October last year to buy the machinery.

DA councillor Taki Kyriacos said details of the deal were disclosed to council only in June, after the contract had been signed. The municipali­ty, which has an annual budget of R200-million, would not be able to afford to repay the instalment­s next year.

Ngqushwa’s shipment, worth an estimated R30-million, will ultimately cost ratepayers more than R60-million.

In May the municipali­ty pleaded for a financial bailout from the provincial government.

In 2002 Yengeni, then ANC chief whip, named Mlonzi as his main benefactor in that year’s register of members’ interests in parliament.

Under the sponsorshi­p category, Yengeni named Mlonzi as the person who paid R317 000 for an advert placed in several newspapers in a bid to clear his (Yengeni’s) name in a corruption investigat­ion.

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