by Hennie van Vuuren for Open Secrets

Open Secrets exposes a military squad allegedly responsible for acts of torture and murder. The evidence implicates at least four units of the SANDF in crimes dating back to 2019. They are the elite Special Forces Brigade, the Military Police, Defence Intelligence and Defence Legal Services. The lead Special Forces operative allegedly involved was also the subject of a criminal investigation by Hawks investigator Frans Mathipa shortly before Mathipa’s assassination by a sharpshooter. All this raises concerns of a large-scale criminal conspiracy within the SANDF.

The first two parts of our Russian Doll investigation revealed a SA National Defence Force Special Forces unit to be the owner of at least one luxury German car that accompanied cargo loaded off and possibly on to the sanctioned Russian ship Lady R in Simon’s Town in December last year. We, in turn, linked that vehicle to a Special Forces operation three weeks later at the Mall of Africa in Midrand, the day alleged Islamic State financier Abdella Abadiga and his bodyguard were abducted from the mall. Importantly, the person hot on the spoor of this group — Lieutenant-Colonel Frans Mathipa of the Hawks — was assassinated on 6 August this year.  

The mystery of the missing rifles

Our story today is rooted in a crime that took place some three years before the Lady R incident. On 23 December 2019, 18 R4 rifles and three pistols were reported as stolen from the strongroom safe at the SA Army Engineer Formation base south of Pretoria.

News of this was leaked to the media and it quickly made headlines across the country. This was not without reason: R4 rifles are the workhorse of the SANDF and can fire more than 600 rounds a minute. In the wrong hands these 18 rifles could cause mayhem. In this investigation, Open Secrets focuses on the hunt for the missing rifles by the SANDF. 

Empty rifle cases: On 23 December 2019, 18 R4 rifles and three pistols were reported as stolen from the strongroom safe at the SA Army Engineer Formation base south of Pretoria. (Photo: Supplied)

Our sources speak out

Witnesses both within and outside of the government have provided evidence to Open Secrets. Their account of events exposes a broad criminal network within the military. Its members appear to hanker back to a time when military death squads operated with impunity in South Africa. Accordingly, we will not name sources. 

In this article, we draw on a source who was present when some of the most egregious human rights violations took place. Their account is supported by two further sources with a contemporaneous understanding of events.  

Where we have independently corroborated information this has been made clear.

While we expose the names of military operatives alleged to have committed grave crimes, it is crucial to note that we have drawn on insights from brave public servants and members of the public who, like the murdered Hawks officer Frans Mathipa, are committed to the democratic constitutional order.

Our investigation also draws on the circumstances of an SANDF board of inquiry established to investigate complaints of alleged criminal activity within the military. The board was headed by Defence Intelligence Brigadier-General John Moorhouse. According to a source who has direct knowledge of the work of the Moorhouse Inquiry, it heard the testimonies of dozens of witnesses and focused extensively on corruption and abuse of office in the military. It also heard evidence of torture, including some of the information we report on today.

Despite the Moorhouse Inquiry having wrapped up hearings almost six months ago, the final report, the same source says, appears to be gathering dust on the desk of the chief of the SANDF and possibly that of the minister of defence. It is imperative that the contents of the report, and the record and evidence presented, are made public immediately.

We now turn to the investigation into the missing rifles. But for contextual information or where we indicate otherwise, the story is as told by our sources.  

Military Police start the investigation 

The head of the Military Police, Rear Admiral Mokgadi Maphoto, appointed a team from the ranks of the Military Police to investigate the rifle theft from the army engineering base. The team included Lieutenant-Colonel Doris Phindani Netshanzhe (then holding the rank of major), the acting commanding officer at the Thaba Tshwane Military Police Office. Thaba Tshwane is a vast military complex south of Pretoria,  not far from Freedom Park and the Voortrekker Monument. It is about 4km from the engineering base where the rifles went missing. 

The Military Police soon established that while the doors of the strongroom were damaged with an angle grinder, this could only have been intended as a ruse. No angle grinder would have been able to open the massive steel door. Rather, the thieves had simply unlocked it. Camera footage confirmed that it was indeed an inside job.

The Military Police identified Lance-Corporal Sidwell Babini Tyawana and Sapper Tumelo Christian Mongale as suspects. Tyawana, who had left the base to join a training exercise in Oudsthoorn, was flown back to Pretoria, a distance of more than 1,000km, on a South African Air Force Caravan aircraft around the time of his arrest.

Military Police believed that Tyawana was the mastermind of the theft and had sold the weapons to criminal enterprises on the East Rand. Tyawana was arrested on 3 February 2020 and Mongale two days later. Both were granted bail when they appeared before a military court at Thaba Tshwane two months later.

We do not know Tyawana’s current whereabouts and if he is indeed alive, but according to records in our possession he was recorded as absent without leave (awol) on 24 April 2020, two days after having been granted bail by a military court. Given the covert nature of military justice processes, we do not know the outcome of the case.

While in custody, Tyawana swiftly agreed to cooperate with Military Police and Defence Intelligence. According to a presentation that Military Police head Maphoto made to Parliament on 27 August 2020, Tyawana actively assisted the investigation in identifying suspects or locations for investigation. This was presumably in the hope that he would be freed in return for his cooperation.

Tyawana’s cellphone was used to contact the purchasers of the rifles. Once contact was established Defence Intelligence could, and indeed did, use cellphone surveillance technology to track the suspects’ whereabouts. It is not known if this was done with a court order. In this way, Tyawana was the bait used to lure unwitting individuals into the arms of military investigators.

‘By any means necessary’

Netshanzhe, the Thaba Tshwane Military Police acting commander, said at the time that then Defence Minister Nosiviwe Mapisa-Nqakula wanted the weapons to be found and returned by “any means necessary” as this was proving to be an embarrassment to the SANDF.

We do not know for a fact that the minister uttered these words, as it is hearsay — but as South Africa’s history during apartheid shows, security officials are quick to interpret instructions such as these literally.

Quoted in Daily Maverick, Mapisa-Nqakula referred to a group of 12 suspects arrested within days of the theft being discovered as “unpatriotic” and “self-serving thugs”, while their attorney described their detention as unnecessary.

According to a presentation made by Maphoto to Parliament in August 2020, charges against seven of the 12 were withdrawn and five were still to appear in court. We have been told that the 12 suspects, which did not include Tyawana and Mongale, were all eventually released as there was no evidence implicating them in any crime.

Special Forces lead the hunt 

On the night of 4 February 2020, a team was assembled at the Thaba Tshwane military base. Their aim was to retrieve the missing rifles based on information obtained from Tyawana. The team consisted of two Defence Intelligence officials, two Military Police officials and a dozen Special Forces members in plain clothes. The presence of Military Police at this point would have been essential, for the military cannot simply usurp policing functions without authorisation.

Netshanzhe and a Colonel Mokone from Defence Intelligence were informed of the objectives of this mission. However, the Special Forces were in charge. They, in turn, were commanded by a man who used the name Musa or Mike.

Open Secrets has since established that Musa or Mike is in fact Colonel Sunnybooi Pinny Wambi. (See “Who is Pinny Sunnybooi Wambi aka ‘Musa’?” below.)

He is the very person who led the Special Forces “training exercise” (as the SANDF would have it) at the Mall of Africa on the same day and time that Abadiga, the alleged Islamic State financier, and his bodyguard were abducted. He was also a prime target of the investigation by Mathipa, the slain Hawks investigator, into Abadiga’s abduction. We established that the same cellphone number was used by Wambi and Musa. This was further confirmed by a WhatsApp profile photograph.

The vehicles carrying the group included a Mercedes-Benz, Toyota Conquest and Nissan Micra. These cars left the military base in a broken convoy. Approximately 10km outside the base the convoy reassembled and stopped on the side of the road. One of the Special Forces members then opened the boot of the Mercedes-Benz. Inside was a man known only as Nyambose. He had been badly beaten, possibly tortured. He was given some money for taxi fare and told by the Special Forces to “walk and don’t look back”. Nyambose is assumed to have been abducted by Special Forces as part of their “investigation” into the missing rifles.

The convoy then headed towards the East Rand, to Springs, as directed remotely by a Defence Intelligence officer using cellphone tracking technology. The vehicles then headed to Kempton Park, where the convoy stopped again near a McDonald’s outlet in the city centre. Here, at lightning speed, they abducted a 35-year-old man named Sphamandla who had been lured by Tyawana to meet them. Sphamandla was bundled into one of the cars and driven back to Thaba Tshwane military base, with the vehicles once again in convoy.

Torture at Thaba Tshwane

The convoy arrived at Thaba Tshwane at about midnight, stopping at the Thaba Tshwane Military Police area office. Sphamandla was taken to the Military Police bar known as Karob (Afrikaans for “carob”) where he was stripped naked, tied to a chair and tortured. He was beaten so badly with branches and sticks that his skin eventually took on a green hue. The beatings were accompanied by shouts of “Shaya! Shaya!” (Beat! Hit! in isiZulu) by Wambi and others who appeared to enjoy this sadistic task. At certain intervals the torturers used ice-cold water to waterboard him, a torture technique which simulates drowning.

The chief interrogator was reportedly Wambi, assisted by Netshanzhe. Other members of the team milled about outside the bar.

Wambi reportedly repeatedly asked Sphamandla in isiZulu, “Where are the weapons?”, to which he replied that uShukela (“Sugar” in isiZulu) was the one responsible. uShukela is believed to be the nickname for Tyawana.  

At about 3am, the bar went quiet. Sphamandla had been beaten so viciously that he could no longer see. He was taken to the Nissan Micra and made to sit on the back seat. He declined an offer of water, requesting a beer instead. The man we know only as Sphamandla took a sip of the Hansa, then breathed his final breath.

Sphamandla’s body was taken back to the Karob Bar where attempts to resuscitate him were unsuccessful. Wambi intended to bury Sphamandla in the grounds of Special Forces headquarters at Speskop, southwest of Pretoria. Speskop is located about 4km south of the Thaba Tshwane military base and has served as the headquarters of the Special Forces for many years. It is in the middle of the Swartkop Park Nature Reserve, providing a large buffer zone between the base and nearby suburbs.

A hero’s welcome

A gathering took place at Thaba Tshwane in May 2020 to welcome the final recovered R4 rifle back to base. This took place in the midst of Covid-19 when the movement of South Africans was heavily restricted during one of the toughest lockdowns in the world. A small gathering of military officials was brought together, including Brigadier-General Eric Mnisi (the head of legal at the SANDF) and Doris Netshanzhe. Five BMW X5s, with blue lights blazing, met the welcoming party at the base. Wambi stepped out of one of the vehicles and handed over a weapon with the words, “Your last one.” The assembled dignitaries clapped.

This date accords with Mathopo’s presentation to Parliament; he, however, stated that the last four rifles were recovered. 

Brigadier-General Eric Mnisi. (Photo: Supplied)

Who is Pinny Sunnybooi Wambi aka ‘Musa’?

Pinny Sunnybooi Wambi led a “training exercise” at the Mall of Africa where Abdella Abadiga, the alleged Islamic State financier, and his bodyguard were abducted. This was the SANDF’s version in court papers following attempts by Abadiga’s brother to locate him and secure his freedom through an urgent application.

We have identified Wambi as the coach of a football team of teenage players known as Young Pirates FC in Sedibeng. On the soccer team’s various social media platforms, he is consistently identified by the nicknames Sanza or Musa.

It is worth noting that Wambi was given the rank of major in court papers in February 2023 following the Abadiga abduction. In court papers submitted by the SANDF in July 2023 (in response to Mathipa’s quest to gain access to Wambi’s cellphone records) he is referred to as a colonel. If accurate, this suggests a promotion in 2023 following the Abadiga abduction.

Pinny Sunnybooi Wambi. (Photo: Supplied)

Pinny Sunnybooi Wambi. (Photo: Supplied)

Who is Lieutenant-Colonel Doris Phindani Netshanzhe aka ‘Mama Skebenga’?

According to one source, Military Police official Doris Netshanzhe earned the nickname of “Mama Skebenga” (Mama Gangster) from Special Forces officers. We have been told that she was swiftly promoted from major to lieutenant-colonel shortly after the completion of the R4 recovery operation. She also enjoyed the privilege of a training course in Cuba. 

Open Secrets has obtained a revealing statement made under oath to the Lohatla Military Police concerning threats allegedly made by Netshanzhe to a Military Police platoon commander. The platoon commander opened a case of intimidation against Netshanzhe at Lohatla military base which is still the subject of a Military Police internal investigation.

The context of the complaint is that Netshanzhe intervened in aspects of processing a rape case at a military base in a manner that the platoon commander thought was unprocedural and could bungle the investigation. The platoon commander is independent of Open Secrets sources. According to the statement, on 8 November 2022, the platoon commander was sitting outside a court at Khatu attending to a matter concerning the sexual assault.

Netshanzhe had wanted the platoon commander to be elsewhere and, according to an affidavit from the platoon commander, stated in a loud voice outside the court, in front of members of the public: “[Lieutenant,] you don’t know me very well. I talk to the Chief [of the] SANDF and Admiral Maphoto [head of Military Police] every day. I am well connected, I am untouchable. General Mnisi of Legal is my boyfriend. I work with Special Forces; we make people disappear. I was investigating officer on the weapons case. That is all over, where are they?” 

The platoon commander, not knowing the context, states: “I did not understand her.”  

Lieutenant-Colonel Doris Phindani Netshanzhe. (Photo: Supplied)

Lifting the veil 

South Africa has a long and complicated history of denying military complicity in criminal activity. At the end of apartheid it was a requirement of the political settlement that neither the apartheid nor liberation militaries should be held to account for criminal activity. At the time, the two primary hidden hands in South African political life — the military and corporate South Africa — were unchallenged lest they undermine the nascent democratic order.

More recently there has been no investigation of the impact of State Capture on the SANDF, notwithstanding the consistent rumours of the close political allegiance between the former chief of the SANDF Solly Shoke and the Zuma administration. As we reported in Part Two of the Russian Doll investigation, the military was the driving force behind draconian State of Emergency regulations drafted shortly before Zuma was pushed into leaving public office.

The Ramaphosa administration has not rocked the military boat, apparently for fear of it turning on him. Its support was, after all, crucial during the July 2021 rioting and looting instigated by a pro-Zuma faction.

However, this investigation exposes alleged criminality within the military which must be investigated and prosecuted by authorities outside of the military. For now, the targets of the alleged torture squad have been people, like Sphamandla, on the margins of society. However, if the Special Forces killed Mathipa, then it must be on account of a greater sense of power and protection. 

Members of Parliament and aspirant MPs should know that if they do not push now for accountability there is no telling who will be next. This should give them all, including the President, sleepless nights until we have seen accountability.

Note

Detailed questions were sent to the following parties named in this article. None responded at the time of publication. Should a response be forthcoming in the next few days, it will appended to this article. They are:

General Rudzani Maphwanya, chief of the South African National Defence Force;

Siphiwe Dlamini, spokesperson for the SANDF/Department of Defence;

Nosiviwe Mapisa-Nqakula, Speaker of Parliament (former minister of defence);

Brigadier-General Eric Mnisi, SANDF legal head;

Lieutenant-Colonel Doris Phindani Netshanzhe;

Colonel Pinny Sunnybooi Wambi; and

Lance-Corporal Sidwel Babini Tyawana (all his messages bounced back undelivered) 

Open Secrets is a non-profit organisation which exposes and builds accountability for private-sector economic crimes through investigative research, advocacy and the law. To support our work visit Support Open Secrets.

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The post AmaBhungane and Open Secrets challenges PetroSA’s diesel contracts secrecy appeared first on Open Secrets.

supplied by AmaBhungane by Caroline James and Qiqa Nkomo (Open Secrets)

For the past two years, PetroSA – South Africa’s national oil and gas company – has reaped enormous profits from the loadshedding crisis by buying diesel from unknown suppliers and selling it to Eskom at a profit.

But aside from PetroSA, we wondered, who really benefits when the lights go out?

This is what we have been trying to find out. For months we have submitted requests under the Promotion of Access to Information Act (PAIA) to PetroSA, asking them to name the companies that received roughly R20-billion in contracts to supply them with diesel.

And for months, PetroSA has resolutely refused to even respond to our requests.

But PetroSA is not only refusing to disclose this information to us: National Treasury is also in the dark about PetroSA’s apparent deviations from standard procurement procedures.

In its recent annual report, PetroSA proudly proclaimed – in bold white letters on a midnight blue background – that “The spirit of Batho Pele, which means ‘People First’, underpins the PetroSA values”.

The question is: which people is PetroSA really putting first?

AmaBhungane’s recent investigations have also uncovered how Russia’s state-owned Gazprombank appeared to be cherry-picked for a tender to refurbish the Mossel Bay gas-to-liquids refinery; how a controversial businessman received massive contracts to build offshore gas infrastructure seemingly without having the financial resources to carry them out; and how those contracts were scuppered by an unpaid soccer player who successfully placed the company in liquidation.

These controversial contracts could cost PetroSA many billions more. But when we submitted PAIA requests, asking it to disclose records of how these contracts were awarded, we got the same stoney silence.

It’s a constitutional right

As a state-owned entity, created to play a strategic role in the oil and gas industry, PetroSA success or failure has repercussions for South Africa’s economic development. Yet despite its professed people-centered approach, PetroSA treats  information requests from civil society as an annoyance which can be ignored.

Our courts have recognised that the constitutionally-enshrined right of access to information is fundamental to the public’s ability to enforce other constitutionally protected rights and to facilitate transparency and accountability. They have also emphasised that civil society and the media should not have unnecessary obstacles placed in their way when performing this role. A civil society which is lively and engaged must act based on accurate information and so relies on requests for information under PAIA.

Timeously accessing the relevant contractual documents would afford the public the opportunity to assess the extent to which PetroSA, as a subsidiary of the Central Energy Fund which reports to Gwede Mantashe’s Department of Mineral Resources and Petroleum, is performing its responsibilities effectively and efficiently.

But despite this crucial public role, PetroSA seems to believe the government’s obligations to act transparently do not apply to it.

At Africa Oil Week 2023, Minister Gwede Mantashe said, “if you want to expose the business of PetrolSA, you’re basically killing it.”

But the truth is quite the opposite; increased transparency leads to a more competitive environment and therefore lower prices. Procurement contracts secured in secret, and thus without meaningful oversight, risk costly and damaging outcomes such as corruption, unnecessary debt and, of particular concern to the energy sector, severe capacity constraints and grid instability.

Information Regulator

PetroSA’s apparent zeal to cultivate an environment in which secrecy thrives, indicates that its professed ‘people first’ ethos is not in fact what it practises. The constitutional requirements of fairness, equity, transparency, competitiveness and cost-effectiveness are plainly eroded by the stifling of public participation in this manner.

Last week, amaBhungane and Open Secrets decided to approach the newly-established Information Regulator, who is tasked with adjudicating PAIA as well as POPIA (Protection of Personal Information Act) requests.

Together we have filed a detailed affidavit setting out how PetroSA has systematically ignored our official requests, and why, in our view, PetroSA’s obsessive secrecy cannot be allowed to stand.

While we, as civil society, will continue to push against this unsustainable approach, we hope that the PetroSA leadership will internally reflect and revert to the Batho Pele value that they profess to hold.

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This post 2025 Open Secrets Internships appeared first on Open Secrets – if you are applying please go to this page for a checklist

• Open Secrets Internship Vacancies 2025
• Deadline: Sunday, 3 November 2024 at 23h59 (CAT)
  • Are you an advocate for social justice, accountability and transparency?
  • Are you keen to work with a small team of lawyers, researchers, and civil society activists?
• Open Secrets is hiring three outstanding candidates (one Intern: Investigations, one Intern: Legal, and one Intern: Campaigns) to join our small, dedicated team based in Cape Town. Open Secrets is a non-profit organisation working on issues of economic crime and its impact on human rights.
• We use investigative research, advocacy, and the law to hold private corporations and individuals who commit these human rights violations, to account.  www.opensecrets.org.za   | Twitter: @OpenSecretsZA   |   LinkedIn: Open Secrets ZA 
• Contract Period: Starting 15 January 2024 for a 6- to 12-month contract period (non-renewable).
• Remuneration: R17,831 per month.These are envisaged as full-time positions based at Community House in Salt River, Cape Town.The Open Secrets team is working a mix of in-office and remotely for the foreseeable future. Open Secrets NPC is committed to protecting and respecting your privacy, and therefore we aim to ensure that we comply with the legal requirements of the POPI Act which regulates the manner in which we collect, process, store, and destroy any personal information which you have provided to us. The information provided will be used solely for the purpose of considering your application in respect of the position for which you have applied, to verify information provided, and to communicate with you and your referees regarding the recruitment process if needed.

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BY Open Secrets Radio

PODCAST: In this episode of Open Secrets Radio the podcasts explore the idea of a Basic Income Grant in South Africa. Investigators Abby May, Zen Mathe, and Michael Marchant discuss how this grant could help reduce poverty and inequality. They also talk about concerns with digitizing South Africa’s grant system and the potential for this grant under the new Government of National Unity (GNU). Tune in – cleck below to listen – to learn who might benefit from this important change.

This podcast is based on a 3-part article series by Open Secrets, published in GroundUp.

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MEDIA ALERT! Open Secrets seeks accountability for investigation into allegations of torture in the SANDF

In the past week a Open Secrets published “Russian Doll 3: Exposed- SANDF ‘Torture’ Squad” and “Russian Doll 4: The ‘SANDF’ Torture Squad Victim, Pule Nkomo speaks out’. On Sunday, Carte Blanche in partnership with Open Secrets also published a report into allegations of torture in the military.

This is a significant story of human rights abuse involving multiple units within the military and top brass who report directly to the Chief of the SANDF.

On 07 December 2023 Open Secrets undertook the following steps to ensure accountability:

Letter to President Ramaphosa (Commander in Chief)

On 07 December 2023 Open Secrets wrote to President Ramaphosa in his capacity as Commander in Chief of urgently intervene in the matter of extra judicial murders and killings.

Letter to President Ramaphosa (Commander in Chief) re SANDF

Complaints to United Nations bodies

On 07 December 2023 Open Secrets wrote to the United Nations Special Rapporteur on Torture (DR AJ Edwards) and  United Nations Special Rapporteur on Extra-judicial Summary or Arbitrary Executions (Morris Tidball-Bin) calling for an international investigation into extra judicial murders and killings within the South African military.

Complaints to United Nations Bodies

Make public the Moorhouse report
On 06 November 2023 Open Secrets submitted a PAIA request to the SANDF requesting the release of Moorhouse Board of Inquiry report and associated documents into abuse of power in the military.

In addition to this we are making public SANDF documents which we believe are in the public interest.

The Ndawo letters – an SANDF whistleblower

We publish four letters which top Military Police official Thulane Ndawo sent to the Chief of the SANDF and other high ranking individuals alerting them to abuse of power within the military. These span a period between 2021 and 2023. We believe these letters lead to the establishment of the Moorhouse board of enquiry. These are internal SANDF documents which we publish in the public interest as they detail alleged abuse of power.

Ndawo Letters to SANDF

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On Thursday, 7 December 2023 the SANDF is hosting a press briefing to address what they refer to as “allegations in the media and public domains”. This comes a week after Open Secrets published “Russian Doll 3: Exposed- SANDF ‘Torture’ Squad” and “Russian Doll 4: The ‘SANDF’ Torture Squad Victim, Pule Nkomo speaks out’. On Sunday, 3 December, Carte Blanche in partnership with Open Secrets also published a report into allegations of torture in the military.

This is a significant story of human rights abuse involving multiple units within the military and top brass who report directly to the Chief of the SANDF. It is an opportunity for the SANDF to thoughtfully address whistleblower claims about torture and murder by members of the SANDF. We encourage media houses and journalists to attend this important briefing by the Chief of the SANDF and ask hard questions of the military chiefs.

Location:                    Department of Defence Media Centre

                                    DoD Logistics Support Formation (Lyttelton, Pretoria)

Time:                           09h45 for 10h00

Our Russian Doll series is available to read here

You can also watch the Carte Blanche’s documentary here.

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Published in the Mail & Guardian

By Michael Marchant

The ongoing failure of South Africa’s investigative bodies and prosecuting authority to secure accountability for high-level corruption and economic crime is one of many serious risks to the country’s future. While reforming these agencies will take more than money, the government’s commitment to austerity risks undermining efforts to challenge the impunity currently enjoyed by the wealthy and powerful.

The Zondo Commission’s final report made strong findings on the systemic causes of state capture, and called for institutional and legislative reform. But it also called for criminal investigation and prosecution of hundreds of politicians, companies, and fixers that facilitated and benefitted from corrupt deals during the era of Gupta-led state capture. I am writing this just shy of two years on from the release of the first volume of the report. In that time, while several high profile criminal cases have been enrolled by the National Prosecuting Authority (NPA), no convictions have been secured. The first high profile case to reach trial – the Nulane case in the Free State – spectacularly fell apart. The case was dismissed without the accused having to present a case, and the judge excoriated the NPA and police’s failings. In other instances, cases have been enrolled but repeatedly delayed, often at the NPA’s request.

One of the causes for these ongoing failures is a key characteristic of state capture that the Zondo Commission elected not to address. This was the decades long interference and capture of key law enforcement institutions, including the NPA and the Directorate for Priority Crimes Investigation (DPCI) – the Hawks. Some of this interference, including the disbanding of the Scorpions and interference at the NPA, predated Jacob Zuma’s presidency. However, evidence was presented to the Commission that showed how this pattern continued during the Zuma administration.

Senior officials were appointed to the NPA and the Hawks to act as deliberate bottlenecks to slow down or undermine cases. In a report on this issue – Bad Cops, Bad Lawyers – Open Secrets showed how these bottlenecks instituted charges against corruption fighters without sufficient evidence and unduly delaying important high-profile cases. The report argued that holding these officials accountable was vital for any true reform of these agencies.

Austerity adds a hurdle

Given the above, it will take more than money and resources to reform these agencies. Yet properly resourcing them is still an essential part of empowering them. Unfortunately, the government’s steadfast commitment to austerity puts this at risk.

In a statement on the recent Medium-Term Budget Policy Statement (MTBPS), the Institute for Economic Justice (IEJ) described government’s pursuit of growth by continuously cutting spending on basic services and other important areas as akin to “trying to drive uphill with the handbrake on”. The IEJ’s argument is that an obsession with cutting spending ignores the potentially catastrophic social and economic consequences that will result in the short and long term.

This metaphor of trying to drive uphill with the handbrake on is apt when considering government’s stated support for accountability alongside its failure to adequately resource the Hawks and NPA. Over the last few years, these agencies have repeatedly argued that real-term declines in their budget allocations have left them with insufficient skills and resources to do their work. In 2021, the NPA warned that it would not have sufficient budget to pay the prosecutors that it needed to undertake its work. In 2022, it called for more than R2 billion extra over three years in order to “successfully prosecute state capture cases”. In September 2023, following further budget cuts, it abruptly announced the suspension of any intake for the 2024 aspirant prosecutor programme due to “government wide budget cuts”.

In its 2020-2025 strategic plan, the NPA explicitly says that budget cuts and austerity have ‘dented’ initiatives to improve skills and strengthen the organisation. While the government has argued that making the Investigating Directorate (ID) a permanent institution is a key part of its efforts to address corruption, there are serious concerns that there will be no money available to properly resource it when it is made permanent.

It is a similar story when it comes to the Hawks. The Hawks is in theory the elite police unit tasked with undertaking investigations into the most complex and important cases linked to corruption, corporate criminality, illicit financial flows, and organised crime. In 2022, the Hawks told parliament that it was operating with less than half the staff it required, and that it had insufficient investigators to take on complex cases. This came a year after it was revealed that Steinhoff had provided R30 million towards the investigation of the fraud at the company because the NPA and Hawks didn’t have the budget for such a complex investigation. Not only did this mean that the investigation was “irretrievably contaminated by conflicts of interest”, but there has still been no criminal charge brought against Markus Jooste, the former Steinhoff CEO who masterminded the fraud and who has been indicted in Germany.

Government’s failure to provide these institutions with adequate resources reflects two important facts about the status quo. The first is this government’s poor and sometimes bizarre prioritisation. In the current financial year, the state is shelling out R3.76 billion for VIP protection services for a couple of hundred prominent politicians. It is only providing R2.2 billion for the Hawks. This is just one example. Over the last ten years, the state has spent nearly R50 billion on bailing out the chronically mismanaged state airline South African Airways, while spending on law enforcement agencies and other social spending has plateaued or been cut in real terms.

The second is the government’s short-termism that ignores the real long term cost of weakened law enforcement institutions. In purely monetary terms, skilled and resources law enforcement agencies are better able to retrieve stolen assets and recover the proceeds of crime for the state. By February 2023, the NPA had obtained R13 billion in freezing orders, nearly triple the NPA’s annual budget. Ensuring that all of these assets are subsequently forfeited to the state requires the NPA to be properly resourced. Further, delayed investigations and prosecutions allow other stolen assets to be dissipated and undermine the chance of recovery.

There are also important systemic benefits to having law enforcement agencies able to investigate and prosecute the powerful and well resourced. It breaks cycles of impunity and disrupts the corrupt and criminal networks who themselves are integral to efforts to undermine and capture law enforcement agencies. It is also essential to rebuild public trust in the state. Further, while individual prosecutions can’t bring about immediate systemic change, regular convictions of private and public actors is vital in changing the calculus for those engaged in crime by ensuring consequences for criminal conduct.

We should also not forget the international consequences for the country as a result of South Africa’s law enforcement failures. Speaking in November 2023, Finance Minister Enoch Godongwana admitted that the single most important obstacle to South Africa’s removal from the Financial Action Task Force (FATF) ‘grey-list’ is the ongoing failure to demonstrate that the country can investigate and prosecute complex money laundering and other financial crimes, and to recover the proceeds of those crimes.

Inequitable results

As I have argued above, more money alone will not turn around agencies like the NPA and the Hawks. Both are undermined by their lack of institutional independence from the executive, as Open Secrets and others in civil society have recently argued to parliament. Neither have shown sufficient desire to get their own houses in order and pursue accountability for their own who are implicated in malfeasance and a failure to do their jobs. Nonetheless, the evidence suggests that any efforts at reform are also undermined by the government’s programme of austerity.

As with all the consequences of austerity, this has inequitable outcomes. The greatest beneficiaries of weakened law enforcement are powerful politicians, large corporate actors, and their executives who are implicated in often complex economic crimes and state capture. While they often bemoan state failure, they benefit from a continued failure to investigate and prosecute their conduct. The wealthy and powerful are also better able to protect themselves from the other negative consequences of the failure of law enforcement and prosecuting agencies.

South Africa’s history lays bare the price of impunity for economic crimes. Treasury insists the country can’t afford to properly fund these institutions. It should ask if we can afford not to.

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The post Report| Who Has The Power? South Africa’s Energy Profiteers appeared first on Open Secrets.

The post Report| Who Has The Power? South Africa’s Energy Profiteers appeared first on Vuka News.

South Africa is at a critical point, facing complex socioeconomic, climate, and energy crises. The rising costs of electricity, and continued lack of access to power by millions of people in South Africa has further contributed to a strained grid that is currently dependent on fossil fuels to function. This report highlights a disjointed and disconnected approach to South Africa’s energy transition. Whether it is the continued investment in outdated and dangerous fossil fuels, or a haphazard shift to renewable energy sources, the evidence is that corporations are currently set to be the key beneficiaries. Such an approach will in all likelihood maintain the status quo and not address the multiple overlapping crises in South Africa that have emerged in part from a deference to private interests. South Africa cannot afford more of the same.

Zen Mathe, investigator at Open Secrets and co-author of Who has the Power? says that: “We focus on corporate actors deliberately, to demonstrate that South Africa’s energy and climate crises are not solely the fault of the state and the result of the collapse of Eskom. In doing so, we hope that the report contributes to the ongoing conversation on the climate crisis and energy transition in South Africa and helps identify those corpo­rate interests that may stand in the way of a just transition. Challenging these, we argue, is fundamental to challenging South Africa’s role in the planetary climate crisis”.

While the report outlines the significant risks to a just transition in South Africa, it also shows that a different way is possible. Drawing on publicly available advocacy and research, the report makes recommendations that ensure that South Africa’s energy transition not only reduces emissions and reduces environmental harm, but does so in a way that disrupts the economic status quo. Such an approach could see the well-being and interests of people put above the profit margins of large corporations, and it would require embracing a different economic model. These recommendations are:

Regulation and accountability for loss and damage: it is vital that adequate penalties are handed to polluters in new legislation that addresses climate change. It is also important to hold corporations and the government accountable for the harms their conduct has caused to the environment and health of people in the past.
Listen to the people, not corporations: large corporations’ access to law makers and state institutions currently outweighs that of civil society and affected communities. Public officials should work to ensure that this access does not give corporations a greater day in policy. Previously marginalised voices must be included in decision-making processes in order to actualise a just transition that disrupts the power imbalances in the energy sector.
Greater transparency: the state and state-owned enterprises need to proactively publish detailed information about all procurement and other energy related contracts in South Africa.
No more monopolies: the just transition in South Africa must provide opportunities to communities and other members of society to take part in and benefit from energy production and its use.
Follow the money: the potential corruption of politics through the funding of political parties or individual politicians by influential lobby groups with vested interests in the fossil fuels industry needs to be closely monitored.

The report goes live at 9h00 on the 15th of November 2023, you can download it here

For media inquiries or interview requests, please contact: Mamello Mosiana, Head of Campaigns, advocacy@opensecrets.org.za

Open Secrets is committed to investigative work on private actors who profiteer in South Africa’s energy sector. If you have information that you think would help us, particularly information linked to any allegations of wrongdoing or corruption, we encourage you to get in touch with us. Contact us at researcher@opensecrets.org.za or on Signal at +27725650173

Attend the Launch

Open Secrets’ Michael Marchant will be in conversation with Zen Mathe, Abby May and Luthando Vilakazi. Activist and author, Kumi Naidoo will also be delivering a keynote address.

15 November 2023,

18h00

Bertha House, 67,69 Main Road, Mowbray, Cape Town

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The crumbling partnership between GovChat and Capital Appreciation Ltd – Part One

By Abby May for Open Secrets

Local technology company GovChat became a key partner of the South African Social Security Agency during the pandemic. Today, the company continues to provide a digital avenue to apply for certain grants, even though it is in business rescue and its executives resigned in 2022. This is Part One in a two-part series

Court records reveal that the relationship between GovChat and its financiers has soured, raising questions about who will get the keys to GovChat’s systems and data, and what this means for social grants.

The R350 Social Relief of Distress (SRD) grant was introduced during the worst parts of the global pandemic in response to the economic and social crisis. It saw the South African Social Security Agency (Sassa) scramble to ensure that millions of potentially new grant recipients would be able to apply for the grant while mitigating the risks of the pandemic.

Digital technologies were seen as the most viable solution to allow access to the SRD grant applications while enabling adherence to social distancing protocols.

In April 2020, Sassa awarded a R2.19-million contract to Prosense Technology to develop an email and website platform for SRD grant applications.

It also awarded Vodacom a R15-million contract to develop mobile communications during the pandemic for government, which included a USSD (unstructured supplementary service data, similar to SMS) SRD grant application platform for Sassa.

Most interestingly, Sassa contracted GovChat to create the WhatsApp SRD application portal, and GovChat agreed to do it free. GovChat was a start-up company primarily known for creating a civic engagement platform (also called GovChat) with the Department of Cooperative Governance and Traditional Affairs.

How is it that, unlike its competitors, GovChat was able to provide its digitalisation services free? And what are the long-term implications of a service provider offering free services to Sassa?

Open Secrets’ 2021 investigation, Digital Profiteers: Who Profits Next From Social Grants?, argued that access to the personal data of millions of grant applicants was likely a key motivation for GovChat’s financial backers. The investigation revealed that, though GovChat agreed to provide its services free, its primary investor – financial technology company Capital Appreciation Limited (Capprec) – expected GovChat to become commercially viable and make a return on its investment.

In its investigation, Open Secrets raised concerns about GovChat providing its services entirely free to Sassa and that it gained the contract without any formal procurement process. 

However, in an interview with the Financial Mail, GovChat’s CEO and founder Eldrid Jordaan defended the company regarding this, stating that “there wasn’t a tender, but there was no need for tender because we are coming from the private sector to assist the SA government at this time [Covid-19 pandemic]. We donated our services.”

A year after the Open Secrets investigation, Capprec announced it would impair its loan of R56.35-million to GovChat. This meant that Capprec was publicly stating it did not expect GovChat to be able to fully repay the loan.

Capprec’s loan was secured by shares in GovChat (a 35% stake) as well as GovChat’s intellectual property, including software rights, trademark rights, and technology source codes. This means that if GovChat fails to pay back the loan, Capprec may gain control of all the data and intellectual property it holds.

Three days following the announcement of the loan impairment, Jordaan released a statement announcing his resignation as CEO, as well as that of GovChat’s chief data officer, Goitse Konopi. 

In one week, GovChat saw its founder step away from the operations of the business and its sole funder take protective measures against its investment within the company. The implications of these changes for GovChat’s partnership with Sassa and the social grant recipient’s data it has access to remain unclear.

Let’s not forget the harmful consequences of Net1’s subsidiary, Cash Paymaster Services (CPS) unlawful contract with Sassa. Net1 and CPS were able to sell illicit financial products to social grant recipients, in part because they had access to the entire financial history of a grant recipient through the smart card technology they used for grant payments.

With Capprec having expressed the possibility of GovChat evolving into a grant payments distributor, the lessons learnt from the Net1 and CPS case are more important than ever. 

The SRD grant has since been extended to March 2024, and GovChat’s portal is used to apply for other grants. This means more potential applicants’ data will be filtered through the GovChat portal. The question is: will Capprec soon own the entire operation and the data of grant recipients?

GovChat and Capprec – a friendship on the rocks

On 13 December 2022, “private and confidential” talks between GovChat and Capprec to ensure the long-term viability of the GovChat business model broke down. 

Net1 founder, Michael “Motty” Sacks, who at the time served as a non-executive director at GovChat and Capprec, had attempted to broker an agreement between GovChat – represented by its only other director, Eldrid Jordaan – and Capprec. 

The following day, Capprec applied to the Western Cape High Court to have GovChat placed under business rescue.

In his founding affidavit, Capprec’s chief financial officer, Alan Salomon, makes it clear that unless a potential financier emerges through GovChat’s business rescue, Capprec is unwilling or unable to continue to provide the funds GovChat requires to remain functional.

However, Salomon has also said that Capprec intends to continue to “drip-feed” fund GovChat as it still sees long-term value in the civic engagement platform’s operations. Moreover, recent media reports suggest that GovChat’s partnership with Sassa is expanding beyond its free service provision of the SRD WhatsApp grant application portal. This is despite the ambiguous state of GovChat’s operations.

The court papers further reveal that GovChat, aside from the funding it received from Capprec, has had no source of revenue since 2019. 

The papers acknowledge that if GovChat were to undergo liquidation, it would result in harmful consequences to the millions of South Africans who use the GovChat platform. The court papers suggest that the failed brokering between the two parties is the culmination of what appears to have been a disagreement between GovChat’s founder and Capprec on how GovChat would operate as a business.

On page 16 of the founding affidavit, it states: “Despite the first respondent’s non-executive director Michael Ivan Sacks’ best endeavours to broker an agreement between the applicant and the first respondent (essentially represented by the first respondent’s only other director, namely Eldrid Jordaan), in order to ensure the long-term sustainability of the first respondent, those private and confidential discussions broke down on 13 December 2022.”

On 22 December 2022, the high court ordered that GovChat be placed under business rescue. A Johannesburg-based consulting firm called Matuson & Associates was appointed to handle the business rescue; it had been approached by Capprec in advance with a request to play this role.

It was always about the money

In an interview with Open Secrets’ investigators in 2021, Eldrid Jordaan insisted that monetisation was not a priority for GovChat. Despite these claims, GovChat’s commercial potential was what sparked Capprec’s interest in investing.

This is made clear in Capprec’s 2020 annual report which states that “to monetise GovChat… the Group has identified a variety of potential revenue opportunities, both locally and abroad, all of which will be explored”.

Additionally, in an interview with the Financial Mail, Capprec CEO Bradley Sacks stated that: “GovChat could evolve to a mechanism of grant distribution, and payments are very much in our [Capprec’s] DNA.”

This suggests that Capprec’s leadership sees social grant payments as a possible avenue for GovChat to generate revenue.

But these revenue opportunities never materialised. By the end of 2022, Capprec announced that it would be impairing its loan to GovChat due to a lack of revenue generation and protracted time of securing contracts with clients. 

The business rescue papers reveal that GovChat requires more than R70-million to repay its debts.

GovChat’s financial woes are intimately intertwined with its competition dispute with Meta (formerly known as Facebook) and WhatsApp South Africa. In late 2020, the global tech giant attempted to force GovChat off its WhatsApp business portal, causing the small technology company to pursue litigation through the Competition Commission.

On 21 January 2021, the Competition Tribunal granted in favour of GovChat’s application and ordered interim relief.  Capprec’s court submissions reveal that GovChat’s legal costs in this matter have now reached approximately R10-million.

The order prohibited Meta and WhatsApp from undermining GovChat’s relations with its clients. But it also prohibited GovChat from onboarding any new clients to its WhatsApp platform.

The interim order lapsed on 11 March 2022, the same day the commission referred Meta and WhatsApp to the Competition Tribunal for abuse of dominance based on its conduct in relation to GovChat. If the commission is successful at the Tribunal, it may result in a pay-off for Capprec.

In its 2022 financial commentary, Capprec said this may be a means of recouping the value of its loan to GovChat: “GovChat believes the Competition Commission will prevail and that GovChat will ultimately be awarded substantial monetary damages because of Meta’s actions. This award is expected to far exceed the value of the group’s loan exposure to GovChat and will likely be more than sufficient to ensure the loan’s repayment over the long term.”

However, with the matter still unresolved, it is unclear whether the prohibitions of the interim order are still in place and if so, GovChat cannot onboard new clients. This, along with the high litigation costs, may mean the company won’t be generating income any time soon.

But why would GovChat rely on the award from its Competition Commission case to cover its debt to Capprec?

A possible answer can be found in Capprec’s interim financial results booklets which state that “as a startup with limited resources, GovChat’s challenges have been made more difficult, as other GovChat shareholders have, to date, been unable to contribute their share towards the capital needed to fund its operations”.

Who are the other shareholders? Could it be that Eldrid Jordaan was unable to pay back the initial loan and therefore was asked to step down as CEO?

In Part Two of this series, we will dig deeper into what the answers to some of these questions may be.

A February 2023 report by ITWeb, broke the news that Jordaan, along with a company called K2018, had made a R50-million public offer to Capprec and its creditors to gain control of GovChat.

At present, this article was the only media report on the potential bid and we are unaware if Capprec is considering it, though the time elapsed suggests that it could have potentially been declined. The identity of K2018 also remains unclear.

Conclusion

The funding Eldrid Jordaan secured from Capprec ensured that a return on investment needed to be secured. Whatever the GovChat founder’s vision might have been, especially regarding monetisation, his primary investor made it well known that GovChat needed to become commercially viable.

The business rescue proceedings reveal that this tension ultimately led to the break-up of the relationship and the departure of Jordaan.

With no resolution, the survival of GovChat, its role in the social grants space, and the ownership of its intellectual property and data remain uncertain.

As we discuss in Part Two of this series, the search for an effective way to pay social grants remains highly contested. This makes it all the more important for this story to remain in the public eye.

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