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Monday, 13 November 2023 18:40

Mashatile off the hook over loans granted to his son-in-law.

By Lehlohonolo Lehana.

An investigation by a law firm has let deputy president Paul Mashatile off the hook for wrongdoing regarding millions of rand in loans the Gauteng Partnership Fund (GPF) advanced to a company owned by his son-in-law Nceba Nonkwelo.

Law firm Gildenhuys Malatji Incorporated (GMI) was appointed to investigate the claims of corruption and maladministration at the fund and issued its final report last month despite an earlier 30-day deadline set by the MEC of Human Settlements Lebogang Maile.

Maile instructed the GPF board to urgently institute an investigation into allegations that Nonkwelo Investments, a company in which Mashatile's son-in-law Nceba Nonkwelo is a director, unduly scored loans worth nearly R30 million between 2013 and 2017.

The loans were for the construction of student accommodation in Johannesburg, which never materialised.

Mashatile was Human Settlements MEC in Gauteng from 2016 to 2017, when he was elected treasurer-general of the African National Congress (ANC).

"The report is clear that there's no conflict of interest, meaning the deputy president was not implicated. The deputy president was never part of any process, "Maile said.

"We had asked the investigator to look at that matter, and it means that they made the determination that there's no conflict of interest – so it's not us; it’s them."

The GPF entered into a settlement agreement with Nonkwelo Investments, the nature of which was not disclosed.

According to Maile's, GMI could not make findings on whether the approval of Nonkwelo Investments to participate in the Entrepreneur Empowerment Property Fund (EFFPF) had been in accordance with the applicable laws or procedures due to them not being provided with the relevant information and/or documentation.

"However, GMI noted that if these documents never existed, the approval that was granted for participation in the EFFPF program would have been irregular. Alternatively, if the documents did exist but were inadequate and/or did not meet the necessary requirements, the approval would also have been irregular."

Maile listed 15 key findings from the investigation, including that the project was not viable and that approving a senior funding loan to Nonkwelo Investments was not in the best interest of the GPF.

"Whilst this does not form part of GMI's scope or mandate, it is unknown to us why such a 'jump' was allowed. Unless there was a reason for this, it would have otherwise been an arbitrary and possibly reckless decision.

"By stepping in and approving senior funding loan to Nonkwelo Investments, investigators expressed the view that this caused the GPF to continue to assume an even greater risk," explained Maile.

Due to a breach in the agreement between the developer and the fund, the GPF was entitled to recover its monies from Nonkwelo Investments but opted to enter into a settlement agreement.

The settlement agreement, entered into on the premise that the company owed the GPF over R9 million, was signed by then-acting CEO Daniel Molokomme and witnessed by the legal and compliance manager Thandi Khuzwayo on behalf of GPF, while Nonkwelo signed on behalf of his company with his wife Palesa Nonkwelo signing as witness.

Invoices and vouchers confirm the disbursement of more than R7 million to Nonkwelo Investments.

"[There were] no bank statements to verify same documents nor to independently verify or confirm why the remaining amounts were not disbursed," Maile said.

No money was recouped from the company.

In his conclusion, Maile said it was clear the findings pointed to governance pitfalls, but his department is of the view that the recommendations in the report are not conclusive.

"Accordingly, we have asked the board to institute a process of reviewing them with the intention of strengthening the areas of weakness."

Maile said he couldn't speak to the allegation that a total of R30 million was loaned to Nonkwelo, saying he could only speak to what is contained in the report.