A private training college – in which the investment wing of the SA Communist Party (SACP) and the party’s treasurer have shares – has been awarded contracts worth R235 million from the National Skills Fund (NSF) and the country’s biggest sector education and training authority (Seta).
The contracts were awarded since 2009, when SACP leader Blade Nzimande was appointed higher education and training minister. The NSF and South Africa’s 21 Setas fall under his department.
City Press’ sister newspaper, Rapport, has learnt that the SACP’s investment company, Masincazelane Investments, is a shareholder in LHR Solutions, a private training college doing business as Letsatsi.
It clinched contracts worth R235 million from the NSF and the Services Sector Education and Training Authority (Sseta) since 2011. Letsatsi was tasked with establishing cooperatives and assisting its members with training.
Nzimande’s department and the Sseta strongly deny that Nzimande’s role as SACP leader played a role in the awarding of the contracts.
Joyce Moloi-Moropa, an ANC MP who was also appointed SACP treasurer in 2012, owns shares worth R800 000 in Letsatsi, according to the parliamentary register of members’ interests.
According to the register, she is also a shareholder in, and director of, Masincazelane Investments, a company she describes as a “party investment wing”.
Moloi-Moropa said she could not comment on Letsatsi issues because she did not work there.
“I am not its executive director. I will not know of the day-to-day running of the business,” she said.
At least until early this year, Masincazelane Investments CEO Livhu Nengovhela had an office at Letsatsi’s offices in Johannesburg.
Nengovhela’s credit records show he gave the telephone number listed on Letsatsi’s website as his work number until the end of January.
A receptionist at Letsatsi this week said Nengovhela did not have an office there any more. She provided his cellphone number, but he didn’t answer his phone or respond to text messages.
Moloi-Moropa also declared an interest in the homonymous Masincazelane Trust in the register of members’ interests. She listed the SACP as a trustee or beneficiary of the trust.
Records from the office of the Master of the North Gauteng High Court, where the trust was registered, show that Nzimande and other senior SACP members, including Jeremy Cronin and Charles Nqakula, were trustees of the trust when it was registered in 2007.
“The minister is not a trustee of the Masincazelane Trust and is not involved with Masincazelane Investments,” said Nzimande’s spokesperson, Khaye Nkwanyana.
Company records show Letsatsi was established in 2002. But the big contracts from the NSF and the Sseta only started after Nzimande’s appointment as minister and after senior SACP members and a former director of Masincazelane Investments were appointed in key positions at the NSF and the Sseta.
Letsatsi won its first contract from the NSF, worth R13 million, in 2011. This was shortly after Mvuyisi Macikama, a former director of Masincazelane Investments, was appointed as CEO of the NSF.
In September 2011, Nzimande also appointed a member of the SACP central committee, Gwebs Qonde, as director-general of the department of higher education. As director-general, Qonde is the NSF’s accounting authority.
In 2012, Letsatsi was awarded a second contract by the NSF, worth R163 million.
Letsatsi got its first contract from the Sseta in 2013, valued at R12.5 million. In June this year, it clinched a second contract, worth almost R47 million, from the Sseta.
These contracts came after the appointment to the board of the Sseta of Madoda Sambatha, SACP provincial secretary for North West. Sambatha was appointed by Nzimande in 2011.
Letsatsi did not answer questions regarding Masincazelane Investments’ shareholding in the company, but did not deny it.
It’s not clear how many of Letsatsi’s shares are owned by it or which other companies or individuals also own shares in the company. Letsatsi this week forbade its auditors from supplying Rapport with the company’s transfer register after the newspaper requested it according to the Companies Act.
“We have reliable information that [the journalist] is employing racist tendencies … to gather fabricated information against political leaders,” Macbeth Ncongwane, Letsatsi’s lawyer, said in an email to the auditor.
Meanwhile, it seems the quality of Letsatsi’s training is sometimes lacking.
According to reports about Letsatsi’s activities in Mpumalanga in 2013, which were handed to the provincial government, the company’s trainers could not explain to members of cooperatives how to do a costing calculation for their agricultural products.
The trainers said Letsatsi did not provide them with the necessary study materials while some trainers apparently couldn’t provide proof that they presented the courses they were paid for, said the reports.
Letsatsi managing director Lulama Manyadu said the problems in Mpumalanga could not be blamed on her company. She said the source of the Mpumalanga reports was the disgruntled coordinator of the project in the province who was fired.
“Your only source and co-conspirator’s services were ended … due to nonperformance and after she failed in her mentorship, although she still expected to be paid,” said Manyadu.
She said it was not uncommon for a company like Letsatsi to subcontract work.
“Its general practice is to work with trainers in the industry, depending on their skills, capacity and location,” said Manyadu.
Nkwanyana said Macikama and Qonde’s involvement with the NSF played no part in the contracts Letsatsi had won from the institution.
“There are measures and internal controls in the tender process to make sure people who are awarded contracts get it in a proper way,” he said.
“The idea that Mr Macikama is influencing the NSF board [in awarding contracts] is absurd and is rejected with the contempt it deserves.”
The Sseta said that the contracts awarded to Letsatsi were done according to proper guidelines and the Seta’s acquisition regulations, and that Sambatha in no way influenced the awarding of the contracts.
“We regard it as an insult to Mr Sambatha and the Sseta that his position as SACP secretary in North West [apparently] determines his attitude with regard to matters of the Sseta board.”
SACP spokesperson Alex Mashilo said: “As with any other political party, the relationship between the SACP and its sponsors and donors are confidential. Masincazelane Investments didn’t conclude any financial transactions with the SACP.” – Rapport