Explosive testimony aired at the Commission of Inquiry into State Capture this week supports long-held suspicions that former Prasa CEO Lucky Montana allegedly received massive bribes from one of the SoE's foremost contractors. Scorpio analysed the latest evidence alongside other documentation and source accounts to piece together what could be one of South Africa's most astonishing cases of alleged high-level corruption.
The holding company of a security technology firm that secured Prasa contracts worth more than R4 billion during Lucky Montana's time in charge of the SoE channelled nearly R20.4 million to a shelf company that bankrolled huge property deals on behalf of Montana.
TMM Holdings, which owns Pretoria-based Prasa contractor Siyangena Technologies, also paid R7.5 million directly into a lawyer's trust account for a property Montana had purchased in 2014.
A businessman linked to TMM Holdings' boss, Mario Ferreira, paid a further R15.5 million into the shelf company that was used to acquire properties on behalf of Montana.
These payments bankrolled a string of property deals to the tune of a staggering R45 million involving Montana.
Siyangena Technologies in 2010 and 2014 clinched two major Prasa contracts to install security systems at train stations across South Africa. The deals were worth R4.5 billion altogether. The first contract was severely criticised in then Public Protector Thuli Madonsela's damning report on Prasa, released in 2015. Siyangena and Prasa are currently locked in a court battle over the contracts.
The timing of some of the transactions detailed in the latest documents submitted to the Zondo Commission seem to support suspicions that the money TMM Holdings paid into the shelf company was directly linked to its subsidiary's huge contracts from Prasa and that these deposits were intended to illicitly gratify Montana.
Speaking on behalf of Siyangena and Ferreira, lawyer Gert van der Merwe stated that the information and reports submitted to the Zondo Commission were "incompetent of being presented as evidence".
Van der Merwe, who first appeared on the public stage when he represented the Gupta family, said his clients have "tendered to appoint an independent forensic auditor to write a report and to remedy the obvious fatal flaws as they appear in the notices (and annexures) received from the legal team of the commission".
Siyangena and Ferreira also intend to cross-examine the latest witnesses, added Van Der Merwe.
Montana did not respond to a request for comment from the Daily Maverick.
In a separate response to Fin24 on Friday morning, Montana said he will not comment at this stage. "I will deal with the issues when I give evidence before the commission. This will happen on a date to be determined by the chairperson of the commission," he said in an email.
Thanks to the latest information submitted to the commission chaired by Deputy Chief Justice Raymond Zondo, Scorpio is able to shed new light on the series of troubling developments that unfolded during and after the awarding of one of Prasa's most contentious deals.
Property 1: The Parkwood pad.
In 2015, this journalist first reported on a suspicious property deal Montana had concluded the previous year.
Montana had sold his property in Parkwood, Johannesburg, for R6.8 million, which was nearly double its market value at the time. The property was bought by a shelf company called Precise Trade and Invest 02. The deal seemed strange because Precise's sole director, a lawyer named Riaan van der Walt, had also done legal work for Siyangena Technologies and TMM Holdings. At the time of the property transaction, Prasa was adjudicating on a huge R2.5-billion security systems tender that would eventually be awarded to Siyangena.
Bank statements filed together with this week's testimony at the Zondo Commission finally prove that the inflated purchase price for Montana's Parkwood home was at least partly bankrolled by none other than TMM Holdings, Siyangena's parent company.
The payments from TMM are especially concerning in light of the fact that Siyangena was in the middle of a bid process for one of Prasa's most lucrative tenders.
The tender process, which had commenced in 2013, had been fraught with controversy. Siyangena, which had secured a deal for similar work in 2010, was Prasa's incumbent contractor for security systems. This time, however, its rival bidders complained that Prasa was unduly favouring Siyangena. This was allegedly done by listing specific brands of security equipment, including the security cameras and high-speed access gates, in the Request for Proposals (RFP) document. Siyangena and other companies in Ferreira's TMM group allegedly held the sole distributing licences for these products in South Africa.
Papers filed in the ongoing court battle reference a letter from none other than Angelo Agrizzi, sent to Prasa in December 2013. Agrizzi was representing Bosasa subsidiary Sondolo IT, which had also tendered for the contract.
"No provision was made in the RFP document that equivalent equipment may be included in the RFP," Agrizzi complained. His concerns were shared by at least three of Siyangena's other rival bidders, according to the court papers.
But when Prasa's executive management presented the recommendations for the security systems tender to the entity's board, Montana allegedly omitted the fact that Siyangena's rivals had submitted substantial concerns in regard to the tender specifications.
"The inputs received from the bidders confirmed that the RFP was optimal," Montana allegedly told the board, according to the court papers.
It is also alleged in the court filings that Montana had "subverted the procurement process" by involving himself in the appointment of the Tender Evaluation Team (TET).
On 17 June 2014, Siyangena received some particularly good news by way of a "notice of appointment" informing the firm that it had bagged the R2.5-billion Prasa deal. The document was addressed to Mario Ferreira.
The very next day, Siyangena's holding company, TMM, deposited R5.85 million into Precise Trade and Invest's Investec account, as confirmed by the bank records filed at the Zondo Commission this week. In hand-written notes Van Der Walt had made on the statements, the money from TMM is labelled as a "loan".
Van Der Walt immediately moved R2.25 million to an Absa bond account for a property in Waterkloof owned by Montana. Using some of the money TMM had paid into the shelf company's account, Van der Walt had therefore settled Montana's entire bond for this property.
According to another document filed at the Zondo Commission, the R2.25-million bond settlement for Montana's Waterkloof property represented the first instalment of the R6.8 million Precise Trade and Invest had agreed to pay for the Prasa CEO's house in Parkwood.
Between July 2014 and March 2015, Van Der Walt made nine additional payments from the Precise account to Montana, or to his benefit, in connection with the Parkwood property. This brought the amount of money transferred to Montana to exactly R6.8 million.
But none of this money came from Van der Walt. About R3 million of the money transferred to Montana can be linked to the cash TMM Holdings deposited in the Precise account in June 2014, including the R2.25 million that was used to pay off the then Prasa boss's other property in Waterkloof. We'll shed more light on the Precise account's other major depositor below.
After the final payment from Precise to Montana in March 2015, Precise Trade and Invest became the legal owner of Montana's Parkwood house.
The property is currently in the market for R6.65 million; R150,000 less than the amount Precise was willing to pay for it six years ago. This suggests that the selling price had indeed been significantly inflated when Montana sold it in 2014.
Van Der Walt has since moved to Texas in the United States and could not be reached for comment.
Property 2: Waterkloof wealth
Another "loan" from TMM Holdings landed in Precise Trade and Invest's account on 23 September 2014. This time the figure was around R3.5 million. That very same day, Van Der Walt transferred the full amount to the trust account of conveyancing attorneys in relation to a property in Waterkloof, Pretoria that Montana had agreed to buy for R11 million.
In the bank statements, Van Der Walt inserted "minor property trust loan" as a reference for the R3.5-million transfer. The Minor Property Trust was registered earlier in 2014 and, according to testimony at the Zondo Commission, it lists Montana's children as its beneficiaries.
As with the earlier payments from TMM to Precise Trade and Invest, the timing of these transfers may also raise an eyebrow or two. Just four days earlier, on 19 July 2014, Montana had committed Prasa to paying nearly R800 million in additional fees to Siyangena by signing a new addendum to one of the earlier security systems contracts.
This was done with "no budget, no procurement process, no consideration by any of the required committees [and] no approval by the board", reads an affidavit filed in the civil case between Prasa and Siyangena.
"The actions of those involved were unlawful and irregular," according to the affidavit's author.
Meanwhile, Siyangena's holding company, TMM, directly paid a whopping R7.5 million to the transfer attorneys to conclude Montana's purchase of the Waterkloof property. This is according to documents that were filed at the Zondo Commission along with Precise's bank statements.
In other words, TMM Holdings had for some reason bankrolled the entire R11-million purchase price for Montana's new house. TMM also took care of the transfer duties and fees. On 25 February 2015, a "loan" from TMM of about R1.1 million arrived in the Precise Trade and Invest account. The entire figure was immediately paid to the transfer attorneys attending to the Waterkloof deal.
Although the property was ultimately registered in the name of Precise Trade and Invest, it appears highly unlikely that the intended beneficial owner would have been anyone other than Montana.
Karen de Beer, the property's previous owner, told the Zondo Commission that Montana had personally submitted an offer to purchase the property after he first viewed it in 2013. A memorandum of agreement signed by Montana supports her claim.
She told the commission that the then Prasa boss at the time lived only a few houses away from her.
The 2013 deal collapsed, apparently because Montana didn't have sufficient funds.
But he came back to De Beer after she had again put the property on the market in 2014.
At first, Montana tried to have the property registered in the name of the Minor Property Trust, but he later asked for it to be registered to Precise Trade and Invest.
Despite the involvement of these other entities, De Beer told the commission that there had been "no doubt in her mind that [she] had sold the property to Lucky Montana".
She went on to explain that Montana personally collected the house's keys from her even after it had been registered to Precise Trade and Invest and that they had had discussions about a possible paint job before he moved in. Montana told De Beer that this wouldn't be necessary, seeing as he intended to renovate the entire house, she testified.
"He said he was going to live there," De Beer told the commission.
Property 3: The Sandhurst splurge
In October 2014, shortly after Montana had agreed to buy the Waterkloof property from De Beer, the Prasa CEO met Johannesburg estate agent Louis Green.
At the time, Green held sole mandates on properties in the well-heeled suburbs of Hurlingham and Sandhurst.
Montana first attended a show day for the Hurlingham property, after which he also went to view the house in Sandhurst, Green told the Zondo Commission.
It quickly became clear that Montana was a serious buyer and that he had plenty of cash at his disposal.
He first submitted an offer to purchase the Sandhurst property for R13.9 million. After the seller accepted the offer, a deposit of R5 million landed in the transfer attorney's account on 7 November 2014.
Again, the money didn't come from Montana but from Precise Trade and Invest.
But there could be no doubt that the property was being bought for Montana. Written exchanges between Green and Van der Walt, as filed in the Prasa vs Siyangena court case, make reference to a "TL Montana Transaction".
Green told the Zondo Commission that Van Der Walt informed him in a letter dated 25 November 2014 that the property would no longer be registered in Montana's name but instead in that of Precise Trade and Invest.
Despite this change in plan, Montana remained on the scene as the would-be beneficial owner. In February 2015, after there were delays in settling the transfer fees, Montana himself got in touch with the seller.
Using his Prasa email account, Montana apologised for the delay.
"I discussed the matter with our attorney, Mr Riaan van der Walt who has since been in contact with Talita [a transfer attorney]. He made an undertaking to settle the fees by today or latest tomorrow morning," Montana wrote to the seller.
The R5-million deposit paid for this property was seemingly covered with a payment from a businessman who can be linked to TMM's Ferreira.
On 6 November 2014, a day before the deposit was paid, one Americo Pimentel paid R5 million into the Precise Trade and Invest account. This was the first of four payments totalling just over R15 million that Pimentel made to this account.
Scorpio was able to link Pimentel to Ferreira and TMM through a low-cost housing development in Danville, Pretoria. According to an article in SA Affordable Housing, Pimentel's company, Boutel Projects, worked on the Madeira Isles apartment block on behalf of ESS, a company in the TMM Holdings group. Deeds records reveal that the land on which the apartment block had been developed belongs to TMM Rentals, another Ferreira entity.
We approached Pimentel for comment, but he said he was in a meeting. This article will be amended to reflect Pimentel's response should he choose to comment.
On 6 March 2015, Precise Trade and Invest transferred the outstanding amount of R8.9 million to the transfer attorneys for the Sandhurst transaction, and the property was subsequently registered in this entity's name.
Property 4: Hurlingham
Shortly after his offer to buy the Sandhurst property, Montana also submitted a bid to buy the Hurlingham house where Green had met the then-Prasa boss for the first time. Montana made an offer to buy the Hurlingham property in late October 2014 using his children's Minor Property Trust. The purchase price would have been R13.5 million, but the deal for some reason collapsed.
However, Montana returned with a new purchase offer in March 2015. The price would still be R13.5 million, but this time Montana said he was going to have the property transferred to his own name, according to Green's testimony at the Zondo Commission.
On 23 March 2015, Precise Trade and Invest paid a deposit of R2 million to the transfer attorneys. This money can be directly linked to Ferreira's TMM Holdings.
By late March, the Precise bank account was running rather low, thanks to the R8.9-million payment in lieu of the Sandhurst transaction.
But on the 23rd, TMM Holdings deposited R5 million in this account, which enabled Van der Walt to pay the R2 million deposit on that same day.
The remaining R11.5 million was paid to the transfer attorneys in May 2015, but this time the source of funds wasn't Precise Trade and Invest. A previous report detailed how this large sum of money was sourced from a third party who could also be linked to Ferreira and Van Der Walt.
Green told the Zondo Commission that Montana later changed his mind and asked for the property to be registered to Precise Trade and Invest.
However, the transfer attorneys and the seller were having none of it and insisted that the deal went ahead in Montana's name.
In July 2015, the then-Prasa boss therefore became the legal owner of a R13.5-million property for which he didn't have to put up a cent of his own money.
The police and the Hawks have been investigating cases relating to some of Montana's property dealings from as early as 2015, but there have been no arrests or prosecutions to date.