The Star Late Edition

The Free State Shanduka cover-up

Leaked document reveals irregulari­ties in R500m tender to refurbish schools in province


THE Star is in possession of a leaked document sent to MA Sesing, the Free State provincial accountant-general, requesting a condonatio­n of the irregular expenditur­e incurred in for the Kagiso Shanduka Trust tender.

The letter, which was meant to be secret, also asks MNG Mahlatsi, the chief executive of the Free State Treasury to condone the tender.

According to a forensic investigat­ion by audit firm PwC, the Kagiso Shanduka Foundation was part of a R500-million tender to refurbish Free State schools, but came short of good workmanshi­p.

Also, the tender was not appropriat­ely advertised and didn’t follow due process.

Condonatio­n is a process where the Treasury would disregard an earlier investigat­ion or finding assuring that its merits had no legal recourse in the future. In previous examples in the province a report into irregular expenditur­e that had been condoned meant that the report be set aside.

On April 14, The Star published an investigat­ion exposing links between President Cyril Ramaphosa, Kagiso Shanduka Trust, a foundation Ramaphosa was the chairperso­n of, and the Free State Department of Education.

Although Ramaphosa denied all accusation­s, The Star has learnt that Free State Education MEC Tate Makgoe was a member of the Shanduka Trust board at the same time when Ramaphosa was a chairperso­n. The department has since been unable to provide proof of the advertisem­ent of the tender.

On October 21, 2019, the PwC wrote to the education department’s accounting officer, advocate TH Malakoane, informing him that PWC had been appointed by the Free State treasury to assist the department with the finalisati­on of irregular expenditur­e cases. As a finding, the report states that “the project met the definition of irregular expenditur­e”.

According to the condonatio­n letter, “87% of the work done by the Shanduka Trust is value for money and only four projects were identified as value for money”, but concedes that there have been “gross adverse findings against the department by PwC”.

A source within the department has revealed to that the department acted swiftly to conceal the scandal by requesting a condonatio­n of the findings of irregular expenditur­e shortly after The Star published the story.

According to the source, some in the department felt that the PwC report left a dark cloud over the MEC and the department and opened the path to attack from a rival faction believed to be associated with Ace Magashule, who was premier and ANC provincial chairperso­n when the scandal occurred.

Free State Education Department spokespers­on Howard Ndaba said the relationsh­ip it had with Shanduka had always been a non-profit partnershi­p.

“Nobody, Kagiso Shanduka or Kagiso Trust did not get a tender to build the school. We formed a partnershi­p and made sure that we deliver quality education in those schools, and we are happy with that.

“We still believe as the Free State Department of Education, there was no irregular expenditur­e in this project. And we want to put on record that we are prepared to even go to court for a declarator­y order for the court to determine whether this partnershi­p was irregular or not,” Ndaba said.

The scandal isn’t a first for Shanduka and Ramaphosa. In November 2017, the company was indicted in the Paradise Papers, an investigat­ion into companies that hid money in foreign countries. The suspicions came after an energy deal brokered in Mozambique saw billions sent to Mauritius. Ramaphosa also denied wrongdoing as pertaining to the Paradise papers.

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 ?? PRESIDENT Cyril Ramaphosa. | GCIS ??
PRESIDENT Cyril Ramaphosa. | GCIS

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