Minister too quick to believe false claims of wrongdoing at the NEF, says CEO Philisiwe Mthethwa The National Empowerment Fund (NEF) believes that Rob Davies, minister of trade and industry, let himself be used too easily as a weapon by a disgruntled and “unstable” man who had earlier defrauded the body and is being pursued in the courts by the state. Now it is up to the minister to take action against an apparently false whistle-blower who “conspired” with the fraudster, made “malicious allegations” and caused the NEF substantial harm, says the fund’s CEO Philisiwe Mthethwa. The auditing firm, Deloitte, this week dismissed allegations against Mthethwa and two other NEF executives?–?Hlengiwe Makhathini and Nhlanhla Nyembe?–?following a forensic investigation ordered by Davies in reply to the whistle-blower’s allegations. The office politics at the NEF are still fraught as Mthethwa has openly said she suspected a member of her staff to be the source of the bogus allegations. Now the NEF is suggesting that Davies should have been more circumspect when he received the whistle-blower’s report accusing NEF bosses of a range of misdeeds including “breaches of corporate governance, conflicts of interest, fraud, nepotism, tribalism and abuse of power”. In an interview this week, Mthethwa said “we speculate it’s a woman who works for me who conspired with a guy who applied for NEF funds six years ago”. The man in question had received funding from the NEF. He then defrauded the NEF by “moving assets” into a company owned by his spouse, said Mthethwa. The NEF won a civil case against him and his company, but a criminal case is proceeding and, according to an NEF legal adviser, is sub judice. “He’s been SMSing us and sending threatening emails saying he will ‘show me’,” said Mthethwa. She added that the emails were received during the investigation and forwarded to the Deloitte team. “It is not clear what he threatened. My colleagues tell me he is unstable.” The suspicion that the man conspired with an NEF employee stems from “a lot of very private stuff” contained in the allegations which only a handful of NEF staff could possibly know, including knowledge of who attended the 21st birthday party of Mthethwa’s niece. Asked whether she would consider lodging a complaint or pursuing the alleged conspirators through the police, Mthethwa said that was a possibility although she did not want to “confuse things” during the Deloitte investigation. The NEF issued a press release this week celebrating the outcome of the investigation, but strongly hinted that it felt victimised by Davies’ handling of the allegations. The Deloitte report showed that many of the allegations were “second-hand” and changed during the course of the investigation, said the NEF. Issuing the statement was the first action of the NEF’s newly appointed chair, Thando Mhlambiso, who took office last Friday. Mthethwa said that if anyone had to take action, it should be Davies. “It [the report] was given to him, he called the investigation.” According to her, policy dictates that malicious allegations are looked into. “Going forward, it is clear what needs to happen. You have to look at the credibility of the individual making the claims. He [the man] had a long legal battle with the NEF. “I’m not saying you should ignore allegations, but you should look at that.” The department of trade and industry (the dti) issued a statement accepting the Deloitte finding there was no case to answer. It defended the investigation, saying the nature of the allegations and the fact that “they emanated from an apparent insider” had necessitated it. Asked if there was any obligation to pursue the false allegations, the department’s spokesperson, Sidwell Medupe, said the minister considered the matter closed. “Following a meeting between the minister of trade and industry, the director-general, Mr Lionel October, the chairman and other members of the board of trustees and the CEO to discuss the [Deloitte] report, the minister has indicated that the matter is now closed,” he said. The NEF, and Mthethwa in particular, have faced a succession of scandals this year. In June, an NEF loan of R34.1?million to help fund businesswoman Khanyi Dhlomo’s exclusive Luminance boutique already led to a separate investigation, again ordered by Davies (see second story). That was followed by reports that Mthethwa’s brother had received funding from the NEF and was being allowed to skip repayments. The NEF was partially paralysed by the investigation and lost several valuable staff members as a result, said Mthethwa. About 15 “mobile, young, black professionals” jumped ship, including chartered accountants and attorneys, she added. “It impacts on the morale of the staff. You cannot quantify the damage,” said Mthethwa.