More financial scandal: Firm that won R1billion Jo’burg Fleet contract paíd Malema-EFF ‘kickback’

The strings of financial involvement by the leadership of the Economic Freedom Fighters is getting even more complex and confounding.

Shortly after the controversial VBS looting for which the opposition party was deeply implicated  with series of investigations underway, a different financial scandal has resurfaced.

It has long been alleged that the EFF was given patronage over lucrative City of Johannesburg tenders as a quid pro quo for working with Herman Mashaba’s DA-led administration.

Now, an amaBhungane investigation shows that before controversially winning a mega-deal from the city, a fleet firm made payments to a company whose account was used for the benefit of Julius Malema and his party.

Is this evidence of kickbacks to the EFF – or rather, as the fleet firm maintains, unrelated payment for services rendered?

The contract for the City of Johannesburg’s “vanilla” vehicle fleet is big, financially. It is also vital for the city to run smoothly, requiring the supply and maintenance of some 2 700 sedans, bakkies and trucks. Bungle the contract and the city risks grinding to a halt.

But with the previous five-year contract coming up for renewal last year, it appears the vultures started circling, concerned less with service delivery than with the carrion of public-private greed.

A long, messy tender process had the incumbent, Avis, in the lead. But the tender stalled, eventually to be cancelled in June this year. This gave a relative bit player in the fleet scene the gap. Without a competitive tender, Afrirent was appointed to the mammoth task at a fee to match: R1.26-billion.

Financial records show that as the rain was about to fall for Afrirent, it transferred R500 000 in two tranches to a company fronted by Julius Malema’s cousin but used it as a “slush fund” for the EFF and Malema.

According to Daily Maverick, details of large amounts flowing from its account to the EFF and a Sandown, Johannesburg house where Malema lived.

Sources in the city and the DA-led coalition charge that Mayor Herman Mashaba’s tough talk belies a willingness to sacrifice clean governance on the altar of political expediency, and that to maintain power he has allowed the EFF to control departments and tenders.

“The EFF has the DA by the balls,” said one.

The city administration denied impropriety, saying in a statement that allegations of politicians and senior officials unduly influencing the procurement are “mischievous and entirely unsubstantiated. The city wishes to state it categorically … that in terms of the city’s supply chain management policy, no politician participates in the supply chain processes.”

Two rounds of questions later, the city said that “all allegations surrounding the fleet contract are a subject of investigation by Group Forensic Investigation Services … and cannot be entertained further pending the outcomes of the investigation”.

In response to detailed questions, the EFF denied influencing the fleet tender. “We don’t know what you’re talking about,” spokesperson Mbuyiseni Ndlozi wrote, adding that it was “absolute nonsense” that the party had been handed control of departments.

About the Afrirent payments, he wrote: “None of your questions have anything to do with the EFF and its leadership. The individuals and companies you mention can speak for themselves.”

Malema’s cousin Matsobane John Phaleng, sole director of Mahuna Investments, the company to which Afrirent made the payments, claimed it was for services rendered.

“We want to put it on record that we never received any bribe … and we are not involved in the fleet contract with the [city]. We provided services to Afrirent from May until August 2018.”

He did not respond to further queries regarding the nature of the services.

Afrirent, however, stated via its lawyer that it had contracted Mahuna “to provide training and logistics for the delivery and implementation” of a contract it, Afrirent, had won from the department of rural development and land reform to supply tractors and farming equipment in Limpopo.

Afrirent provided evidence of its contracts with the department and Mahuna, saying “payments made by Afrirent to Mahuna were strictly in terms of this contract”.

Afrirent also said it “was unaware that the CEO of Mahuna was related to Mr Julius Malema and denies in the strongest terms that any monies paid by it to Mahuna … were a kickback to the EFF and/or Mr Malema”.

On the face of it, Afrirent’s explanation is good. But this is a tale of coincidences, some so large as to challenge the credulity of its version. You be the judge.

City officials started preparing a tender for the non-specialised, “vanilla” vehicle fleet well before Avis’s five-year contract was to expire at the end of September last year.

The successful service provider would own and service the vehicles, lease them to the city and offer support services such as call centres.

A project plan was put forward in March last year, according to which the bid would be advertised in May, evaluated, and a bidder recommended in July. But there were severe delays and the tender ended up being advertised in September only.

By the time applications closed in November last year, 16 bids had been received. An evaluation team then filtered down the bidders, disqualifying those that did not meet criteria.

Tender records show that five bidders ultimately went through the final scoring process. Avis was ranked top, followed closely by Fleet Africa.


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