DOCUMENTS

Suspend CompCommission Head and EXCO members – Michael Cardo

DA says forensic investigators must be able to work without any possible obstruction or interference

DA calls for suspension of Competition Commission Head and EXCO members during forensic investigation

28 February 2019

Today I wrote to the Minister of Economic Development, Ebrahim Patel, asking him to suspend the Head of the Competition Commission, Mr Thembinkosi Bonakele, and other members of the Competition Commission’s Executive Committee.

This follows the launch of a forensic investigation into financial and administrative irregularities at the Commission. According to today’s edition of the Financial Mail, the probe will delve into the financial affairs of the Commission’s top executives to determine whether anyone is receiving kickbacks from external legal or IT service providers.

The investigation was alluded to in the 2019 Budget Review. Further details are provided in a leaked letter from National Treasury to the Economic Development Department (EDD), whose contents are reported in the Financial Mail.

The DA first called for such an investigation in July 2018. This followed responses to parliamentary questions revealing that Ndzabandzaba Attorneys received R72m in payments from the Commission between January 2015 and August 2018, and were channelled 70% of all cartel cases outsourced by the Commission.

The DA welcomes the forensic investigation. However, for it to be thorough and credible, the investigation must be undertaken by an independent and competent forensic investigator. The investigators must also undertake their work without any obstruction or interference, perceived or real. For that reason I am requesting the suspension, with immediate effect, of Commissioner Bonakele; the Head of the Cartels Division, Mr Makgale Mohlala; and the Chief Financial Officer, Mr Molatlhegi Kgauwe.

The Commission’s financial health is a source of great concern. The Commission’s expenditure more than doubled from R199 million in 2013/14 to R422 million in 2017/18. The Commission recorded deficits of R78 million in 2016/17 and R69 million in 2017/2018. The Commission’s accumulated surpluses have now been depleted. Yet the Commission continues to spend beyond its budget despite interventions from National Treasury. Furthermore, the Commission’s irregular expenditure ballooned to R128 million over the preceding two financial years (2016/17 and 2017/18). Much of it benefited Ndzabandzaba Attorneys and two firms that provided services in connection with “dawn raids” – Century Technical Solutions and Exatech.

According to the 2019 Budget Review, an amount of R125 million set aside for the Commission to investigate cartels and anticompetitive behaviour has been placed on hold pending the completion of the forensic investigation.

The forensic investigation should, therefore, proceed expeditiously. There must not be a whiff of doubt about the independence and credibility of the investigation.  The Competition Commission’s reputation, integrity and institutional stability are at stake.

For that reason, Minister Patel should immediately reveal the name of the forensic investigators and their terms of reference and announce the suspensions of Messrs. Bonakele, Mohlala and Kgauwe.

Issued by Michael CardoDA Shadow Minister of Economic Development, 28 February 2019