JOHANNESBURG - On Friday February 19 2010 The Star published its "lifestyle audit" of Julius Malema. The newspaper raised questions over the mismatch between the cars, houses and luxuries the ANC Youth League President was able to afford and his modest salary (estimated at R20,000 a month.)
The mysterious origin of this unexplained wealth was seemingly explained shortly thereafter. On Sunday February 21 the Sunday Times and City Press both reported on how a company of which Malema was a director - SGL Engineering Projects Pty Ltd. - had benefited from some R140m worth of municipal tenders in Limpopo Province.
However, in reply to these articles the ANC, ANCYL and Malema issued a string of vehement denials. He owned only one car they said (a C63 AMG Mercedes-Benz worth a mere R814,000), and the salary he earned from the ANC was well above R20,000. In a joint statement issued in reply to The Star article the ANC/YL said that it was an "untrue fabrication" that "Cde Julius has bought houses for cash. Cde Julius Malema has not at any stage bought any house for cash. Like everybody else, he has purchased whatever houses or property registered in his name through banks."
Malema repeated this claim in his statement on Monday, February 22. He also claimed to have resigned all his directorships following his election as ANCYL president in 2008:
"I instructed my Lawyers to process my resignations from all the corporations and companies I was involved in when I was based in Limpopo Province. I issued the instruction because I vowed to dedicate all my time to serve and give undivided attention to the ANC Youth League as a full time President. I from 2008 stopped being an active director of the companies that I was previously involved in because all my time was dedicated to the service of the organization."
In order to buttress his argument Malema added that "... For the record, those people [SGL] got tenders from the government of Sello Moloto who was opposed to me. If Moloto was given the opportunity to find any corrupt activity on me, he would have jailed me."
Malema's lawyer, Tumi Mokwena, told the Mail & Guardian that "Julius only became aware that he was listed as a director of SGL on Sunday. He didn't know that he was part of the company. I will investigate how he was registered because my instructions are that he never signed to become a director."
Revelations over the past week have raised questions over all these denials. Certainly, the available documentary evidence appears to contradict them.
Malema was elected ANCYL president in April 2008. It would not have been possible for him to resign from SGL Engineering Projects, at this point, as it did not formally exist. According to CIPRO records the concern was only registered as a Closed Corporation on May 28 2008. Malema does not appear to have been a listed director, even after the company was established. There was also only one director named on CIPRO records and that was Lesiba Cuthbert Gwangwa.
In July 2008 Malema's friend and ally Cassel Mathale was elected ANC Limpopo provincial chairman. From this point onwards Sello Moloto was, in his own words, a "lame duck." In terms of a resolution adopted at the ANC's national conference in Polokwane, in December 2007, the Provincial Executive Committee, which Mathale now headed in Limpopo, had the power to appoint all mayoral candidates in the province following the local government elections. (They had to choose from a list of three presented to them by the Regional Executive Committees.) Provincial PECs - through their deployment committees -have also had the power to deploy municipal managers and even chief financial officers.
According to CIPRO records Malema only emerged as an owner and director of SGL Engineering Projects when the concern was converted from a CC to a PTY LTD in early May 2009. This was after the April 22 elections, and the appointment of Mathale as Premier of Limpopo. City Press reported this Sunday that according to company registration records "the company issued 1000 shares [last May] Malema took 700 shares, making him a 70% shareholder while the remaining 30% went to Gwangwa." Furthermore, these records revealed that, contrary to his denials, Malema had "signed on as a director, signed to pass power of attorney to his business partner and signed a third time to take up his majority shareholding [on May 6 2009]."
A few months later, on August 1 2009, Malema purchased the house in Sandown for R3,6m. On December 18 2009 he registered a bond with ABSA bank for R1,5m. Malema also owns a house in Pietersburg which he bought for R1m on May 29 2007, and on which he took out a R850,000 bond on February 27 2009. (These two bonds - totalling R2,35m - would cost about R 23,462 a month to service.)
Accepting that Malema's denials are false and that he has benefited from the tenders granted to SGL Engineering by various municipalities in Limpopo the next question is whether there was illegality involved.
Moloto, now a COPE MPL, claims there was. He told the Sowetan that Malema "got those tenders by intimidating mayors and municipal managers that they would lose their jobs if they did not approve the appointments of his companies." Since the ANC leadership in Limpopo has the final say over the appointment of mayors and municipal managers in the province this threat, if made, would certainly have been credible.
It is not clear what makes the tender bids of SGL Engineering Projects quite so attractive - other than the opportunity they present for municipal mayors and managers to keep their heads. The Sowetan reported last week that SGL Engineering did not meet one of the basic minimum requirements of tendering for public works projects. The company, it said, was not registered with the Construction Industry Development Board. Clause 18 of the Construction Industry Development Board Act (no. 38 of 2000) states:
"A contractor may not undertake. carry out or complete any construction works or portion thereof for public sector contracts, awarded in terms of competitive tender or quotation, unless he or she is registered with the Board and holds a valid registration certificate issued by the Board."
Furthermore: "Any contractor who carries out or attempts to carry out any construction works or portion thereof under a public sector contract and who is not a registered contractor of the Board in terms of this Act, is guilty of an offence and liable, on conviction, to a fine not exceeding ten per cent of the value of the contract so carried out."
Last week City Press carried out an inspection of some of the projects which SGL was supposed to complete. Piet Rampedi reported on Sunday that the company's work was characterized by its poor quality and the failure to pay local labourers promptly (if at all.) The company is, it seems, not particularly good at road and bridge building.
For instance, SGL received a lucrative R27,9m contract from the Greater Letaba Municipality to provide street paving and drainage in Kgapane Township. The project was completed late last year. When City Press inspected the site only a portion of one of the two bridges constructed were still standing.
"A bridge built at the township's Meloding Section" Rampedi wrote, was "effectively a hill of soil covered with pavement. It has no concrete layers. Residents say heavy rains in January swept it away just a few weeks after it was finished."
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