Company accuses SIU of conducting fraudulent probe

2017-10-08 05:56
Mathole Motshekga

Mathole Motshekga

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A businessman has accused the Special Investigating Unit (SIU) of being in cahoots with the Limpopo municipality that he has fought to recover R41m of payments outstanding to him and his company for having provided electricity to 24 villages.

Mphaphuli Consulting has been fighting the Fetakgomo Greater Tubatse Local Municipality for non-payment and because the municipality has launched various attempts to terminate its legal contract with the company over the past few years.

Lufuno Mphaphuli, CEO of Mphaphuli Consulting, has lodged a complaint with the Portfolio Committee on Justice and Correctional Services chairperson Mathole Motshekga about the SIU’s alleged investigative bias concerning his dispute with the municipality.

The company accuses the SIU – which is supposed to investigate the municipality for maladministration – of having given advice to the municipality on how to get rid of contractual obligations to the company. It said the unit was acting outside the scope of presidential proclamation R52 of 2014, which clearly set out the parameters for an investigation.

The company was appointed in 2013 to implement a R326m pilot electrification project, Operation Mabone – to provide electricity to 13 500 households in 24 villages in the same year.

The scope of Mphaphuli’s contract was later increased to include three more villages – Mashamuthane, Praktiseer and Bothashoek – at a cost of R95m.

Mphaphuli successfully sued the municipality in the Polokwane High Court and had its vehicles and an investment account attached when the municipality refused to pay R41m for work done in December last year.

The municipality eventually paid the money and got back its property, then lodged an appeal in the Bloemfontein Supreme Court of Appeal, which failed.

After this, Johannes Mohlala, former Greater Tubatse municipal manager, wrote to Mphaphuli in January notifying his company that its contract was being terminated due to lack of funds and alleged poor performance.

But he refused to provide the company with a council resolution authorising the termination.


City Press understood that Mphaphuli Consulting’s payments were being withheld because senior politicians in the Greater Sekhukhune region wanted another company to replace it so that they could allegedly have an influence on subcontractors to be appointed for their own benefit.

The proclamation, Mphaphuli argued, did not include his company (as subject of investigation) when it was issued and was only about an investigation into maladministration of the municipality’s affairs.

In a letter to Motshekga, Mphaphuli’s lawyers from Couzyn Hertzog and Horak said “at present, our client has gained the impression” that the SIU has “teamed up with the accused [the municipality] against the witness [Mphaphuli Consulting]”.

“Our client is tempted to conclude that [the municipality] is abusing the SIU in order to punish Mphaphuli Consulting” for having obtained the Polokwane High Court judgment.

“The unfortunate result of the way in which the SIU is conducting its investigation (which has all the characteristics of a witch-hunt) is that it deters other service providers who are legally aggrieved from taking government and parastatal institutions to court for resolution of disputes,” the letter read.

They cited council minutes dated July 24 2017, which indicate that the SIU had been advising the municipality on how to deal with its problems.

“Further advice from both legal counsel and the SIU is that in order to avoid further delays and exacerbation of unrests relating to service delivery with regard to the electrification of the outstanding villages, the municipality should engage both the DOE [department of energy] and Eskom in order to seek funding and assistance to electrify houses ...”.

SIU spokesperson Nazreen Pandor confirmed that Fetakgomo Greater Tubatse’s mayor, Maudu Phokane, and municipal manager Nontuthuko Busane had requested the unit to turn its attention to Mphaphuli Consulting.

“The SIU vehemently denies the allegation that the SIU’s officials are working in cahoots with the municipality’s politicians” to terminate the contract, Pandor said.

With regards to the advice given by the SIU to the municipality, the SIU sees nothing wrong with that.

Thabiso Mokoena, spokesperson for the municipality, declined to comment saying City Press should rather contact the SIU “as they are the ones conducting investigations as proclaimed by the presidency”.

Greater Tubatse was merged with Fetakgomo after the local government elections.

Before the merger, Good Governance Africa rated Greater Tubatse among the 10 worst-run municipalities in South Africa.

Read more on:    siu  |  fraud

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