Anti-graft hero’s feet of clay

2010-05-30 10:52

Anti-corruption campaigner Moeletsi Mbeki failed to act against

widespread financial misuse at a premier education NGO he chaired – leaving more

than 20 staff members ­unemployed and millions of donor funds ”misused”.

Mbeki, brother of former president Thabo Mbeki and internationally

renowned as an independent thinker and commentator, was personally alerted to

the misuse of funds involving millions of rands at the Open Learning Systems

Education Trust (Olset).

Olset has provided learning ­material and training to thousands of

primary school learners and teachers in the country for more than 17 years. It

had to close its doors last November after its primary funder, the Dutch

embassy, pulled out more than half of its R40 million funding due to financial

irregularities at the NGO.

Documents in possession of City Press highlight a sequence of

meetings and emails during which Mbeki, who has publicly lashed out at fraud and

corruption, was alerted to several anomalies in the organisation since July 2008

but failed to act.

Olset director Gordon Naidoo, whom staff say ruled the organisation

with an “iron fist”, is a long time ally of Mbeki.

Mbeki did not respond to questions he had asked to be emailed to

him. Naidoo refused to answer any of the questions emailed to him. Instead he

sent a brief note explaining the organisation’s business.

Olset’s former deputy director and whistleblower Farhana Chand

started asking critical questions two years ago, some addressed to Mbeki and

Naidoo, regarding organisational and management policies and procedures,

specifically about financial and operational issues.

These included Naidoo being the only signatory on Olset bank

accounts; that no senior management or board meetings had been held between 2004

and last year; that Naidoo, in the absence of board meetings, had approved loans

of about R800 000 to himself and that a company credit card was used for private


Chand, a long-serving Olset employee, was instead suspended in May

last year, allegedly on Mbeki’s instruction, for a range of what later proved to

be spurious allegations.

One of the charges levelled against her was that of having

unauthorised discussions with funders and not disclosing these to Naidoo or the

­Olset board. She was found not guilty on all charges and re-instated.

Following a sequence of events which included late payment of

salaries, staff anxiety over Olset affairs and schools paying for undelivered

learner radios, in mid-­November Naidoo informed staff that the ­organisation

was closing down.

During a meeting he cited as a ­reason for this that the Dutch were

ending their funding due to the global ­economic crisis and that there was no

money for ­salaries.

Deputy ambassador of the Royal Netherlands Embassy in Pretoria,

Peter Mollema, said they withdrew almost R22 million in funding due to irregular

spending at Olset, prompting a forensic audit.

“Our forensic audit found that money was not spent in accordance

with the (funding) contract. There is something wrong (with Olset’s) ­finances,”

he said.

Mollema said a report had been sent to their ministry in The Hague

and they were awaiting instructions on possible action to recoup the “misused”


“We are entering into legal discussions with Mr Naidoo. We may

consider civil action,” he said.

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