Joburg mayor Geoff Makhubo denies undue benefit from relationship with Regiments Capital

Geoffrey Makhubo.
Geoffrey Makhubo.
Deaan Vivier
  • The commission of inquiry into state capture has started to probe the flow of funds between Gupta-linked Regiments Capital, a company owned by current Johannesburg Mayor Geoff Makhubo and his personal bank account.
  • Makhubo maintains there are no links between the awarding of a tender to Regiments to manage a fund for the city of Johannesburg and payments made to Molelwane Consulting.
  • He also supported the ANC receiving donations from companies and individuals that are are doing business with the state. 

The flow of funds between Gupta-linked Regiments Capital, a company owned by Johannesburg Mayor Geoff Makhubo and his personal bank account was on Friday scrutinised by the commission of inquiry into state capture, raising questions around a potential conflict of interest.

Since August 2018, the commission has been investigating allegations of state capture, corruption and fraud at state entities.

On Friday, the inquiry's evidence leader, Matthew Chaskalson, put it to Makhubo that his company, Molelwane Consulting, received payments of more than R35 million from Regiments Capital between 2008 to 2016, a period during which he was the treasurer-general of the ANC's greater Johannesburg region.

Regiments Capital in 2006 won contracts, later renewed, to manage Johannesburg's sinking fund and Molelwane is said to have received a 10% payment from the Regiments contract, according to the evidence leader. 

Chaskalson drew Makhubo's attention to a payment on 29 August 2015, from Molelwane to Makhubo's personal bank account, the day after Regiments paid Molelwane R799 000. This came less than a month after after Makhubo participated in a decision to give Regiments the fund management contract for Johannesburg for another five years. Molelwane then made a payment of R500 000 to Makhubo's account.  

The Johannesburg mayor on Friday said he could only assume that the money went into a call account which generates more interests and was on his name.

In his defence, Makhubo argued that the context of the sequence of events presented to him was not correct, as "Regiments Capital owed Molelwane Consulting and the money was duly invoiced and paid".

"I don't know how the payment links to the council decision, they have no relationship at all."

Chaskalson put it Makhubo that it appeared there may well have been a relationship between Regiments and Molelwane, an assessment that Makhubo described as "incorrect".

Makhubo said he resigned as a director at Molelwane in November 2011. The Regiments contract with the city was again renewed in 2011, at a time when Makhubo was MMC for Finance in the City of Johannesburg. He denied that he had received any undue benefits relating to Regiments.

Earlier, Makhubo said in an opening statement there was nothing wrong with the ANC receiving donations from black-owned companies and individuals that are doing business with the state and are sympathetic to the party.

He stated that since black-owned companies did largely not benefit from contracts with the private sector, it was therefore "not unusual" that they would donate to the ANC from funds derived from tenders with the state.

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