DA investigating possibility of criminality of Deputy Finance Minister Buthelezi’s PRASA deal

5 June 2017

The DA will be laying criminal charges against Deputy Finance Minister, Sfiso Buthelezi, in light of reports today that while he was Chairperson of the Passenger Rail Agency of South Africa (PRASA) Board, he was a part-beneficiary of R150 million worth of contracts from PRASA.

This appears to be blatant corruption, and we believe that criminal charges may be brought in this matter. In terms of the Prevention and Combatting of Corrupt Activities Act, Buthelezi may be guilty of some if not all of the following:

- The general offence of corruption, according to section 3 of the Act;

- An offence in respect of contracts, according to section 12 of the Act;

- An offence in respect of tenders, according to section 13 of the Act; and

- An offence relating to private interests in public contracts, according to section 17 of the Act.

The DA will also write to the Transport Committee Chairperson, Dikeledi Magadzi, to request that the Hawks appear before Parliament to update the Committee on the progress of all the current investigations into PRASA. There are numerous criminal investigations outstanding, and it is high-time that the Hawks update Parliament.

On the back of the Public Protector’s 2015 ‘Derailed’ report that uncovered enormous governance and delivery failures at PRASA and the Auditor General’s report that confirmed widespread corruption in PRASA, the Hawks opened investigations into 39 reported corruption cases and 100 contracts in line with the report’s recommendations.

The DA believes that the Hawks must now provide a comprehensive update on each of the cases they have been investigating as well as to provide a timeline as to when these investigations will be completed, in the interest of holding those responsible for corruption to account.

As emerged today, Inala Shipping, a firm entirely owned by Deputy Minister Buthelezi’s brother, was instructed by PRASA’s controversial locomotives supplier, Swifambo Rail Leasing, to co-ordinate the logistics and shipping for the importing of the trains. In 2014 and 2015, Inala Shipping then instructed Sebenza Forwarding and Shipping, a firm in which Buthelezi holds a beneficial interest, to deal with the customs clearing section of the locomotives importing. Essentially, PRASA contracted Buthelezi’s brother to a value of R150 million, and his brother sub-contracted multi-million rand portions to Buthelezi himself, while he was Chairperson of PRASA – this clearly indicates massive corruption.

It is deeply concerning that prior to Buthelezi’s December 2014 resignation as the Chairperson of the PRASA Board, at the same time as PRASA’s first locomotives were delivered, these deals and contracts had been wrapped up. Therefore, while he held his position as PRASA Chairman, he was a shareholder and director in firms that had an immediate interest in PRASA-linked contracts.

The DA is anticipating bringing criminal charges against Buthelezi soon, to ensure that he is held to account, and we will push for an update on PRASA investigations until we get to the bottom of the decay at PRASA.

Issued by Manny de Freitas, DA Shadow Minister of Transport, 5 June 2017