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News Op-ed State Capture Profiteers Zondo Commission

July 30, 2025

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  Letlhogonolo Letshele

The Zondo Commission provides a valuable framework to eradicate State Capture and we must begin implementing its recommendations. We simply cannot afford another nine wasted years.

This year marks nine years since advocate Thuli Madonsela released the “State of Capture” report and three years since the “State Capture Commission” came to an end. R1-billion was spent on the State Capture Commission, yet we still have no significant progress in addressing State Capture cases.

What we do have is multiple excuses from institutions tasked with implementing the commission’s findings and recommendations. The Civil Society Working Group on State Capture has been tracking the implementation of the findings of the commission, and what we have found is a generally lacklustre approach to addressing State Capture.

How can we expect corruption and State Capture to be eradicated if we are failing to implement the most basic of recommendations that were set out in the commission’s report?

The Zondo Commission

The Zondo Commission, led by Former Chief Justice Raymond Zondo, was a commission of inquiry into allegations of State Capture, corruption and fraud in the public sector, including organs of State. It came about from the findings of former public protector Madonsela, who looked into allegations of crooked appointments of Cabinet ministers, directors and awarding of state contracts and other benefits.

Her key recommendation was the appointment of a judicial commission of inquiry headed by a judge. The terms of reference of the Zondo Commission were very broad in scope, with the commission being appointed to investigate matters of public interest concerning allegations of State Capture, corruption and fraud.

The commission found that State Capture did indeed take place between 2009-2018, the so-called “nine wasted years” of the Jacob Zuma administration. The commission made extensive recommendations, some specific and focused and others much broader and far-reaching, including recommendations for the investigation and potential prosecution of some individuals and reform of various government processes and institutions.

During this year’s State of the Nation Address, President Cyril Ramaphosa revealed some of the progress being made in addressing State Capture. According to Ramaphosa’s address, the SIU and Asset Forfeiture Unit had recovered R10-billion in State Capture-related cases.

Ramaphosa also said that Parliament would introduce two key pieces of legislation relating to State Capture, one on combating money laundering and the other on protecting whistle-blowers.

What is being done to ensure State Capture is addressed?

Asset Recoveries

The commission recommended coordinated action from various law enforcement entities including the Asset Forfeiture Unit (AFU), the Independent Police Investigate Directorate (Ipid), the Hawks, the Financial Intelligence Centre, South African Revenue Service (Sars), Reserve Bank, and the Special Investigating Unit (SIU) to achieve the recovery of monies lost to State Capture.

The progress in recoveries is very slow – only R10-billion has been recovered from State Capture investigations. The money that the state spent that was tainted by State Capture amounted to R57-billion, with Eskom and Transnet’s fraudulent contracts making up the biggest chunk.

Of this money, the Guptas received R15-billion. Some estimate that the true cost of State Capture and corruption during that period is in fact R500-billion. So the recoveries are a really small fraction of the cost of State Capture and corruption.

Combating money laundering

At the end of 2022, Parliament passed the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, to avoid the “greylisting” of South Africa by the Financial Action Task Force (FATF). This was an important move toward ensuring financial transparency.

However, the challenge is ensuring the beneficial ownership register is functional, accurate and accessible. This year, the President said South Africa would strengthen the legislation with further legislative and systemic improvements. It should include these elements.

Whistle-blower protection

Most of the evidence from the Zondo Commission came from whistle-blowers, and the commission was very clear in its recommendations relating to whistle-blowers, detailed in Part I Volume 4. However, to date, the whistle-blower legislation framework remains incomplete.

In July 2023, the Department of Justice released a discussion document outlining proposed reforms. While the document includes several commendable proposals aligned with the Zondo Commission recommendations and civil society submissions, it fails to consolidate the existing complex and inconsistent legal framework, which remains a major obstacle for whistle-blowers.

Additionally, it dismisses the idea of offering incentives to whistle-blowers. Civil society has argued that the proposed legislation is inadequate, and the outcome of the legislation to be introduced remains uncertain.

Read Civil Society’s Collective Response to the Zondo Commission

During this year’s State of the Nation Address, President Cyril Ramaphosa revealed some of the progress being made in addressing State Capture. According to Ramaphosa’s address, the SIU and Asset Forfeiture Unit had recovered R10-billion in State Capture-related cases.

Ramaphosa also said that Parliament would introduce two key pieces of legislation relating to State Capture, one on combating money laundering and the other on protecting whistle-blowers.

What is being done to ensure State Capture is addressed?

Asset Recoveries

The commission recommended coordinated action from various law enforcement entities including the Asset Forfeiture Unit (AFU), the Independent Police Investigate Directorate (Ipid), the Hawks, the Financial Intelligence Centre, South African Revenue Service (Sars), Reserve Bank, and the Special Investigating Unit (SIU) to achieve the recovery of monies lost to State Capture.

The progress in recoveries is very slow – only R10-billion has been recovered from State Capture investigations. The money that the state spent that was tainted by State Capture amounted to R57-billion, with Eskom and Transnet’s fraudulent contracts making up the biggest chunk.

Of this money, the Guptas received R15-billion. Some estimate that the true cost of State Capture and corruption during that period is in fact R500-billion. So the recoveries are a really small fraction of the cost of State Capture and corruption.

Combating money laundering

At the end of 2022, Parliament passed the General Laws (Anti-Money Laundering and Combating Terrorism Financing) Amendment Act, to avoid the “greylisting” of South Africa by the Financial Action Task Force (FATF). This was an important move toward ensuring financial transparency.

However, the challenge is ensuring the beneficial ownership register is functional, accurate and accessible. This year, the President said South Africa would strengthen the legislation with further legislative and systemic improvements. It should include these elements.

Whistle-blower protection

Most of the evidence from the Zondo Commission came from whistle-blowers, and the commission was very clear in its recommendations relating to whistle-blowers, detailed in Part I Volume 4. However, to date, the whistle-blower legislation framework remains incomplete.

In July 2023, the Department of Justice released a discussion document outlining proposed reforms. While the document includes several commendable proposals aligned with the Zondo Commission recommendations and civil society submissions, it fails to consolidate the existing complex and inconsistent legal framework, which remains a major obstacle for whistle-blowers.

Additionally, it dismisses the idea of offering incentives to whistle-blowers. Civil society has argued that the proposed legislation is inadequate, and the outcome of the legislation to be introduced remains uncertain.

Parliament

The commission highlighted how parliamentarians failed in their duty to hold the executive accountable and prevent State Capture. Despite the commission’s damning findings, MPs continue to neglect their responsibilities, prioritising party loyalty over the public good.

Once again, we see most MPs not implementing the commission’s recommendations and essentially not recognising the importance of the process to strengthen democracy. Many seem unaware that they play an important oversight role over the Presidency and the appointment to SOEs and legislative reform.

Outa has closely monitored parliamentary activities and believes that Parliament’s ongoing failure to combat State Capture and entrenched corruption remains a major threat to democracy. Some of the accused in the State Capture Commission, like Lucky Montana, Brian Molefe and Siyabonga Gama, are serving as MPs in Parliament for the uMkhonto Wesizwe party.

Cedric Frolick, David Mahlobo and Malusi Gigaba serve as MPs for the African National Congress (ANC). These MPs oversee the institutions they are accused of collapsing and oversee the implementation of the Zondo Commission recommendations. Only a small number, such as Zizi Kodwa, have been held accountable, though with limited consequences.

Criminal Justice System (National Prosecutions Authority)

Most of the recommendations of the Zondo Commission were for further investigations and prosecutions. No high-profile politician or corporation has been successfully prosecuted. Even with enough evidence, the NPA has failed to prosecute major State Capture cases like Prasa, Transnet and Eskom.

Moreover, the collapse of the extradition of the Gupta brothers and the implosion of the Nulane case raise serious concerns around the NPA’s effectiveness in handling State Capture cases. The bungling of high-profile State Capture cases is unfortunate, because it shows that elites can get away with impunity because the state is failing.

Read more: NPA secures major State Capture win: Gupta associates and Free State officials face retrial

What should we be doing?

Without fully addressing State Capture at all levels, we continue a cycle of establishing commissions of inquiry without making the systemic change needed for non-repetition. We need to ensure that State Capture is fully addressed. For this to happen, all state parties need to come on board and do their part.

As for civil society, we will continue to apply pressure to state institutions and corporations to take accountability and redress their role in State Capture. The Civil Society Working Group on State Capture will continue tracking the implementation of Justice Zondo’s recommendations, and we will be coordinating campaigns on whistle-blower legislation and keeping an eye on the upcoming NDPP appointment process.

We simply cannot afford another nine wasted years. We need to spotlight the anniversary of the Zondo Commission to track the progress of State Capture and to keep the conversation concerning State Capture on the national agenda.

The true impact and cost of State Capture will never be understood. Its severe impact will continue to be felt by the most vulnerable in our society for years to come. The Zondo Commission provides a valuable framework to eradicate State Capture, and we ought to begin implementing its recommendations now.

June 23, 2026

INVESTIGATION | Who Owns South Africa? – Private Pensions

June 22, 2026

INVESTIGATION | Who Owns South Africa? – Private Health

March 20, 2024

The lawyers and auditors who cashed in on corruption at PRASA

March 18, 2024

The looters living it up from PRASA millions

March 14, 2024

The European company that profited from corruption at PRASA

March 7, 2024

South Africa’s Civil Society demands actions against state capture

The post State Capture and the failure to implement the Zondo Commission’s recommendations appeared first on Open Secrets.

Join us for an insightful preview of the Zondo Recommendations Tracker designed by the Civil Society Working Group on State Capture. This user-friendly Tracker identifies key government departments and ministries responsible for implementing key recommendations and evaluates their progress in addressing state capture.

In this session, Zen Mathe, Investigator at Open Secrets, will engage with Letlhogonolo Letshele, Campaigner at Open Secrets, and Motlatsi Komote, Legal Researcher at Corruption Watch and Zaakirah Vadi, Executive Director at Defend our Democracy. Discover how civil society is actively monitoring the implementation of these crucial recommendations and learn about the Tracker’s vital role in promoting accountability.

Don’t miss this opportunity to explore the intersection of civil society and state accountability!

Date: 5 November 2024

Time: 12:00 PM

The post Zondo Recommendations Tracker | Who Implements the Recommendations of the State Capture Commission? appeared first on Open Secrets.

Audit firm to be investigated by regulator

Published in GroundUp

By Ra’eesa Pather and Qiqa Nkomo

This is the third in a series of articles on corruption and irregular money flows from PRASA’s dealings with Swifambo Rail Leasing. It follows the auditors and lawyers who cashed in on corruption at the Passenger Rail Agency, neglecting their professional duties.

The Independent Regulatory Board for Auditors (IRBA) has launched an investigation into the activities of audit firm WKH Landgrebe, accused of playing a key role in corruption at the Passenger Rail Agency of South Africa (PRASA). WKH Landgrebe was fingered in two reports on PRASA’s dodgy contract with Swifambo Rail Leasing. The first, commissioned by the Hawks, was written by forensic auditor Ryan Sacks; the second, commissioned by Swifambo’s liquidators, was written by forensic auditor Jan Dekker.

Swifambo director Auswell Mashaba and businessman Makhensa Mabunda were among the main beneficiaries of the Swifambo contract. But they were not the only ones. Investigations by Sacks and Dekker demonstrate that audit firm WKH Landgrebe and law firm Nkosi Sabelo Attorneys played a key role in enabling Swifambo’s corruption at PRASA.

The payments to WKH Landgrebe seemed “very excessive”, just for audit fees, Sacks found.

Open Secrets sent questions about the allegations against WKH Landgrebe to the Independent Regulatory Board for Auditors in February. Board CEO Imre Nagy responded: “Subsequent to your inquiry we have now opened a self-initiated investigation on WKH Landgrebe.”

Swifambo made 26 payments to WKH Landgrebe, totalling R32.6-million, between April 2013 and May 2017, according to the Dekker report. The audit firm confirmed the receipt of the funds to the liquidators of Swifambo. At the time, WKH Landgrebe acted as the auditors for Swifambo Rail Leasing, but most of the payments came from Swifambo’s holding company, Swifambo Rail Holding (renamed Railpro), which was audited by a different firm.

According to the Dekker report, WKH Landgrebe was paid R1.3-million to cover its fees, and an additional R6.7-million for legal services. The largest payment, however, was for R24.5-million which WKH Landgrebe used to secure a stake in Okapi Farming, worth R24-million, for the Mashaba family trust, the Mamoroko Makolele Trust. The Daily Maverick covered much of the detail surrounding this transaction in 2020.

Auswell Mashaba and his wife, Joyce, are the trustees of the trust, with their children listed as beneficiaries.

Swifambo’s liquidators have instituted a civil claim against WKH Landgrebe to recover the funds it received from Swifambo.

Open Secrets has also found new information in the Sacks report that WKH Landgrebe received “large payments” from two companies linked to Makhensa Mabunda: Bahn Wheels and Enerwaste Solutions. There is no record of WKH Landgrebe acting as the auditor of these two companies in the Companies and Intellectual Property Commission (CIPC) database.

According to the Financial Advisory and Intermediary Services Act, a financial services provider must report non-compliance and consider activities related to money laundering which they must flag to the Financial Sector Conduct Authority. Auditors are also required to report serious irregularities to the Independent Regulatory Board for Auditors in terms of the Audit Profession Act. Auditors who fail to report irregularities may face imprisonment or fines up to R5-million for individual auditors and R15-million for audit firms.

But Nagy confirmed to Open Secrets that no irregularity was reported for any of the entities which received money from Swifambo.

Asked for comment, Wolf Landgrebe of WKH Landgrebe told Open Secrets that the firm had been advised by lawyers to withhold comment until a legal resolution had been reached.

While WKH Landgrebe attracted attention in the Dekker and Sacks investigations over the payments it received, other financial firms also did work for Swifambo.

Van Wyk Auditors provided various financial services to Swifambo Rail Holding from June 2015 to October 2016. When PRASA approached the Johannesburg High Court to have its contract with Swifambo set aside because of irregularities in the contract, Swifambo’s group CEO Felice Massaro responded to allegations made by Popo Molefe, then head of the PRASA board.

He said that Van Wyk Auditors prepared the financial statements for Swifambo. Molefe responded that the financial statements were unreliable. Sacks said in his report that the financial disclosures “cannot be substantiated and [Massaro’s] arguments were provided in support of the concealment of the true nature of disbursements of funds by Swifambo”.

Van Wyk Auditors told Open Secrets that while it handled Swifambo’s VAT registration and payroll, it had never audited Swifambo’s books. The company said it “attempted to assist in compiling financial statements” which could then be audited, but it never undertook any audits.

“We assisted with the figures, as far as it was available to us. This stems from the accounting we had been trying to do for the company. We cannot comment on whether any transaction was inflated or reliable as we only received the information from the directors,” said Willem Schoeman, a senior partner at the audit firm.

The lawyers

According to the Sacks and Dekker reports, law firm Nkosi Sabelo was paid R28.5-million from proceeds linked to Swifambo’s corrupt contract with PRASA. The payments were made in two tranches in April 2013.

During a private enquiry linked to Swifambo’s insolvency proceedings, George Sabelo, a partner at the firm, said the money the law firm received was paid on to a company called Similex, where well-known ANC fundraiser Maria Gomes was a director. The Dekker report confirmed that Gomes received the funds from Nkosi Sabelo, and that a payment of R17-million was made from Similex to an account belonging to Gomes. The Dekker report also confirmed that Gomes paid R10-million of this amount to the ANC.

However, Mashaba has revealed that the payments to Nkosi Sabelo and Gomes were originally meant to be far higher. Mashaba made the disclosure in a company document laying out Swifambo’s financial status during the liquidation proceedings, which was used as evidence in the Zondo Commission. According to Mashaba, he and Mabunda met with two ANC “fundraisers” shortly after the PRASA contract was awarded to Swifambo. One of these “fundraisers” was George Sabelo and the other was Maria Gomes.

“The two persons referred to… were Mrs Maria Gomes… [and] an attorney George Sabelo, at that stage a partner shareholder in a legal firm by the name of Nkosi Sabelo,” Mashaba said in the document, which Sacks quoted in his testimony before the Zondo Commission.

According to Mashaba’s evidence, the original amount Sabelo and Gomes had attempted to raise for the ANC was R80-million in funds diverted from PRASA through Swifambo. Sabelo and Gomes had offered to pay Mashaba an R8-million “handling fee” for the payments. Mashaba agreed.

However, the Dekker report contained no evidence that these payments were actually made, finding only that Nkosi Sabelo received the R28.5-million, of which Gomes’ company Similex received R17-million, and paid R10-million to the ANC.

The Dekker report also found that Nkosi Sabelo Incorporated had spent R1.1-million at a luxury Cartier boutique store after the law firm received the Swifambo funds.

Nkosi Sabelo did not respond to questions concerning its conduct in relation to corruption at Swifambo, but George Sabelo denied being an ANC fundraiser during a private inquiry related to the liquidation proceedings.

The bankers

Questions also arise about the role of the banks, which might have been expected to flag concerns about the Swifambo transactions. Four of the six Swifambo accounts investigated by Dekker are with Standard Bank. The remaining two are call accounts held by Swifambo with Bidvest Bank.

The Johannesburg High Court and Supreme Court of Appeal have both confirmed that Swifambo was a front company and had no significant funds or activities until it signed its illicit contract with PRASA in 2012.

Sacks told the Zondo Commission in 2021 that Standard Bank was aware that Swifambo’s accounts had been inactive. Swifambo’s auditors, he said, had told him that the company was a new company “and had never traded before. Their bank, Standard Bank, indicated that Swifambo had no financial history which the bank would use to evaluate its financial viability”.

“It is evident that this was a company that had no operational history,” said Sacks.

Yet this does not appear to have been a concern to the banks.

In terms of the Financial Intelligence Centre Act (FICA), Standard Bank had a duty to monitor the Swifambo accounts and report any irregularities or suspicious transactions to the Financial Intelligence Centre. Banks are also required to do Know Your Customer checks in order to detect corruption, and are legally empowered to close accounts to prevent corrupt transactions. Neither the Sacks nor Dekker reports mention any reporting by the banks to the FIC.

Asked for comment by Open Secrets, Standard Bank spokesperson Ross Linstrom said: , “Where any client is alleged to be involved in corruption or any other suspicious activities, the bank applies its policies and procedures in order to ensure that the clients adheres to the relevant laws when using the banking services provided to them by the bank.”

He said he could not comment “on the specific allegations”.

Additional reporting by Khwezi Matangana.

The post The lawyers and auditors who cashed in on corruption at PRASA appeared first on Open Secrets.

Makhensa Mabunda and Auswell Mashaba were at the heart of the corrupt deals.

Published in GroundUp

By Ra’eesa Pather and Qiqa Nkomo

This is the second in a series of articles on corruption in PRASA’s dealings with front company Swifambo Rail Leasing. It focuses on the activities of Makhensa Mabunda and Auswell Mashaba, the men who orchestrated the purchase of unusable locomotives for the Passenger Rail Agency of South Africa (PRASA).

Makhensa Mabunda is a man with a lavish lifestyle. His 1.2 hectare home in north Gauteng is valued at around R30-million. The design and décor of the mansion cost upward of R5-million. We know this because bank records revealed in investigations into PRASA’s corrupt contracts show the rail agency paid for upgrades to Mabunda’s home.

The investigations were undertaken by forensic auditors Ryan Sacks in 2017 and Jan Dekker in 2021. The Sacks investigation, commissioned by the Hawks, produced a draft report which was heavily relied upon by the Zondo Commission. The probe by Dekker was commissioned by Tshwane Trust, Swifambo’s liquidators, who have a number of claims against individuals and companies who received the proceeds of Swifambo’s corruption with PRASA.

Mabunda runs the Siyaya Group of companies which has a long history of bidding on PRASA contracts. Even before the deal in which front company Swifambo partnered with Spanish supplier Vossloh to supply locomotives to PRASA, Siyaya had already scored about R1-billion in PRASA contracts, according to a forensic investigation by law firm ENS.

After the Swifambo deal was struck, Mabunda and companies linked to him were paid R123.7-million, according to an investigative audit report commissioned by Swifambo’s liquidators, Tshwane Trust. The payments were made by Swifambo and its holding company Railpro.

In addition to these payments, Mabunda’s companies also received R89-million from Vossloh itself, in ten payments made between 2011 and 2015.

As reported in part one of this series, these payments were flagged in a 2017 report by the Reserve Bank and there are grounds to believe that they were kickbacks for Mabunda’s role in setting up the Swifambo/Vossloh deal with PRASA.

But the Mabundas continue to live in their luxury mansion in Waterfall Equestrian Estate.

At the Zondo Commission, Mabunda denied any involvement in impropriety. He told Open Secrets in March 2024 that the Commission “didn’t bother to call me back” after he made his submission.

Mabunda is currently under investigation, but in an investigation initiated by Spanish authorities. Authorities in Spain submitted a Mutual Legal Assistance request to the National Prosecuting Authority (NPA) for an investigation into Mabunda and others who benefitted from PRASA’s corrupt dealings with Swifambo, between 2012 and 2017.

Asked for comment by Open Secrets, Mabunda said he would only answer to a a case put forward by the Special Investigating Unit (SIU) or the NPA. “I don’t deal with media,” he said. “I want to deal with the Hawks, the SIU or the NPA. I will respond to law enforcement. Whatever information you have, you can refer it to them, and I will respond to them if there is a case to answer.”

The Mashaba millions

Auswell Mashaba was the director of Swifambo when the Vossloh-PRASA locomotive contract was signed.

He and his family continue to rake in money from businesses they built partly off the millions illicitly diverted from PRASA.

In 2015 City Press revealed that Mashaba spent over R50-million on property after Swifambo received its first payment of R460-million from PRASA in 2013. This included R27-million which Mashaba spent on the luxury AM Lodge in Hoedspruit, Limpopo, paid for in cash. Mashaba resigned as director of AM Lodge, but his children — Nsovo and Njombo — were made directors of the company. A stay at one of the lodge’s luxury villas costs R38,000 per night, according to its website.

The money Swifambo received from PRASA was on the basis of a contract that the Johannesburg High Court and Supreme Court of Appeal (SCA) set aside because it was corrupt and irregular. In 2018, the SCA upheld a judgement by the Johannesburg High Court from 2017 which declared the PRASA’s contract with Swifambo corrupt. The courts found that Swifambo was a front company with no previous business history, and that the tender process had been riddled with irregularities to allow Swifambo to be awarded the contract.

Swifambo is currently under liquidation and has been in talks with PRASA to reach a settlement for money owed to the rail agency. However, the Mashaba family’s wealth has been allowed to grow.

In addition to the property, the Mashaba family controls the Mamoroko Makolele Trust, where Auswell Mashaba and his wife, Joyce, are the trustees. Four of their children — Nsovo, Akani Arnold, Njombo, and Xihanano — are the beneficiaries. According to a forensic report by auditor Jan Dekker, commissioned by the Tshwane Trust, Swifambo paid R85-million from the proceeds of PRASA funds into the family trust. At the time the report was written, in 2015, the Swifambo payments accounted for 78% of the total income in the account.

The Dekker report goes on to show that Swifambo also made 16 direct payments totalling just over R262,000 to Mashaba’s son Akani Arnold between February 2015 and November 2016. And Akani and his father benefited from Swifambo payments totaling R9.2-million paid to a company called Brightwave Technologies where both are listed as directors.

Swifambo also paid R19-million to the Mizana group of companies where Bekani Ephraim Mashaba serves as director. According to the Dekker report, Bekani Ephraim Mashaba is the brother of Auswell Mashaba.

In total Mashaba senior and the companies and people related to him were paid a staggering R177.8-million of PRASA looted funds through Swifambo’s bank accounts.

The Zondo Commission summoned Mashaba to appear in response to allegations of corruption regarding the Swifambo contract, but Mashaba refused. After the Zondo Commission released its final report, Mashaba launched a review application in court against the report and the summons which had been issued against him. The Commission’s lawyers, led by attorney Baitseng Rangata, filed a responding affidavit, but Mashaba has not replied to it. The matter will be heard in court in June.

Tshwane Trust is taking legal action to recover funds from the directors of Swifambo, including Mashaba, and from at least five of Mashaba’s companies which received proceeds of corruption, including the AM Luxury business, for a total of over R90-million.

Open Secrets sent detailed questions to Mashaba and his son, Nsovo, over payments that the family received and used to benefit their businesses. They did not respond.

In February this year, the SIU made an announcement that it is investigating Swifambo’s contract with PRASA. The SIU has been largely successful in holding perpetrators of corruption to account, particularly while the Hawks and NPA have faced criticism for their failures to investigate and prosecute state capture cases.

Like Mabunda, Mashaba’s empire was built with help from corruption. And to date, these two men have yet to answer for what they stole.

Meanwhile banks and auditors turned a blind eye to the money flushed from PRASA into the pockets of greedy and powerful figures. Our next article in this series will look at the auditors and banks who enabled the looting of Prasa.

Additional reporting by Khwezi Matangana.

The post The looters living it up from PRASA millions appeared first on Open Secrets.

Vossloh made R1.8-billion from a dodgy deal and has not paid back a cent.

Published in GroundUp

By Ra’eesa Pather and Qiqa Nkomo

This article is the first in a series of articles on corruption in PRASA’s dealings with a front company called Swifambo Rail Leasing. It focuses on Vossloh, a European rail technology company, which made billions of rands through a dubious partnership with Swifambo.

In 2012, a deal was struck that contributed to the near collapse of the Passenger Rail Agency of South Africa (PRASA). The Swifambo deal for 70 locomotives led to billions of rands in losses for PRASA and accelerated the decline of passenger rail services in South Africa.

Swifambo, a front company set up shortly before the deal, partnered with Vossloh España — the Spanish subsidiary of Swiss railway stock manufacturing firm Stadler — to supply the locomotives. Stadler acquired Vossloh España in 2016 from German headquartered rail technology company, Vossloh AG. Vossloh España was owned by Vossloh AG at the time it partnered with Swifambo on the PRASA deal which was worth R3.5-billion.

In 2018, the Supreme Court of Appeal upheld a decision by the Johannesburg High Court declaring the contract corrupt. The court said that Swifambo had acted as nothing but a front for Vossloh in the deal.

The locomotives supplied by Vossloh, known as the Afro4000, were meant to improve long distance passenger services between South African cities, but were revealed to be too tall for South African railways. Yet PRASA ended up paying Swifambo R2.7-billion for the trains.

Swifambo went into voluntary liquidation in 2018. The trains are now being auctioned by Swifambo’s liquidators, Tshwane Trust, to recover amounts owed to PRASA.

Vossloh received R1.8-billion of the R2.7-billion Swifambo was paid by PRASA. According to the draft report of a 2017 investigation by forensic auditor Ryan Sacks, commissioned by the Hawks, and a separate investigative report by forensic auditor Jan Dekker, commissioned by the liquidators, Vossloh made the most money from the corrupt contract — even more than Swifambo’s director, Auswell Mashaba.

Yet Vossloh has not paid back a single cent.

Vossloh’s records show just how profitable the corruption at PRASA was for its European business. Before the locomotive contract, Vossloh had already scored a major cash injection from PRASA, when Its German subsidiary, Vossloh Kiepe, shipped 272 air conditioning units to PRASA in 2012 worth €80-million in a deal where there were “significant irregularities”, according to Sacks’s draft report.

That same year, Vossloh opened its South African headquarters, Vossloh Southern Africa Holding Company, in Midrand, Gauteng. A year later, in 2013, it landed the “megacontract” for the locomotives for PRASA through its front company, Swifambo. At the time Vossloh España agreed to partner with Swifambo to provide the trains, Vossloh AG’s profit was declining. The company’s annual report for the year ending 2011/2012 showed a 5.7% decline in sales. Then, in 2013, orders rose by more than 37% to €453-million. South Africa’s order of 70 locomotives made up more than half the value of orders Vossloh received in 2013.

The deal was set up to benefit a few at the expense of PRASA and South African commuters.

Between 2011 and 2015, Vossloh made ten payments totalling R88.9-million to companies owned by Makhensa Mabunda, a well-connected businessman who is believed to have set up the Swifambo/Vossloh deal with PRASA. Popo Molefe, then chairman of the PRASA board, has revealed in court papers that Swifambo director Mashaba identified Mabunda as the businessman who engineered the PRASA deal by inviting Mashaba’s company to submit a proposal for the tender.

The payments to Mabunda were flagged as suspicious in a report by the Reserve Bank in 2017, according to the Sacks report.

News24 first revealed the payments made by Vossloh to Mabunda in 2018, and Open Secrets referred to them in an article in its Unaccountable series on Vossloh in 2021. After the News24 story was published, Vossloh AG confirmed that it paid Mabunda and his company S-Investments about R90-million as an “independent sales representative” who simply acted as a middleman to bring “Vossloh España, the supplier, together with its customer Swifambo”. But there is more to it than that.

As Open Secrets reported in 2021, Sacks found that Vossloh had paid the startup costs of Swifambo in 2011 and 2012 — more than a year before Swifambo scored the PRASA contract and partnered with Vossloh España. And Mabunda’s companies continued to receive money from Vossloh three years after the startup costs were paid.

Vossloh had no legitimate reason to pay Mabunda, but so far nothing has come from the Reserve Bank’s report. There does not appear to have been any further investigation into whether these payments were potential kickbacks for Mabunda’s role in securing the billion rand contract.

And little action has seemingly been taken by PRASA to recover the funds that are so vital to improve services for commuters. Molefe, as PRASA chairman, filed papers in court in 2017 to compel the Hawks to investigate corruption at PRASA. But so far, the Hawks have made no progress in their investigation into the PRASA and Swifambo corruption case, and there has been no judgment in the court action to compel the Hawks to investigate these matters.

Swifambo’s liquidators have numerous ongoing civil claims to recover funds from Swifambo with regard to its contract with PRASA. So far the liquidators have auctioned 8 of the 13 locomotives Vossloh delivered for just under R100-million, but this is only a fraction of the R1.8-billion Vossloh made from the deal.

Nearly three years ago the Hawks told the Zondo Commission that the Swifambo investigation was “90% complete”. But responding to questions by Open Secrets in March, the National Prosecuting Authority said the case was “still under investigation” and no prosecutions can take place until the Hawks finalise the police work. Deputy Head of Public Prosecutions Rodney de Kock said other law enforcement agencies were collaborating on the case.

However, PRASA’s spokesperson Andiswa Makanda has told Open Secrets that the agency believes the Hawks are prioritising the case and the agency is “cooperating with law enforcement agencies involved in the investigations”. And the Special Investigating Unit (SIU), which investigates matters referred to it by the Presidency, announced in February 2024 that its eye was now on the Swifambo contract, and investigations into Mashaba and PRASA are underway.

Spanish authorities in 2022 submitted a Mutual Legal Assistance (MLA) request to South Africa in relation to an investigation into Vossloh España and others involved in the deal. Makhensa Mabunda is one of the individuals named in the Spanish MLA request. The NPA declined to comment to Open Secrets on the status of the MLA request.

Vossloh España’s parent company, Stadler, also declined to comment on the allegations of its involvement in corruption with Swifambo, saying the matter is before the courts in South Africa.

The Reserve Bank told Open Secrets that it “does not comment on ongoing investigations” and did not “have further details that can be provided at this time”.

Mabunda was the inside man behind the Swifambo deal, and bank records show just how much he gained from being well-connected. Our next article in this series focuses on the man who made the Swifambo deal possible, and who is complicit in creating the access to transport struggles faced by South African commuters today.

Additional reporting by Khwezi Matangana.

The post The European company that profited from corruption at PRASA appeared first on Open Secrets.

Radio Islam

South Africa’s civil society has unveiled a report demanding actionable steps be taken to address state capture. The collective response, presented in Braamfontein, reflects the collaboration of civil society organisations within the Civil Society Working Group on State Capture, focusing on the findings of the Zondo Commission.

Letlhogonolo Letshele, from Open Secrets, speaking on Radio Islam International, discussed the group’s efforts. 

The post South Africa’s Civil Society demands actions against state capture appeared first on Open Secrets.

6 March 2024

The collective civil society response is a reflection, by civil society organisations within the Civil Society Working Group on State Capture (CSWG), on the Zondo Commission and the State Capture report. It has been compiled from several civil society organisations’ perspectives and stands as a part of ongoing collective work by the CSWG and broader civil society, alongside the important work being done by whistle-blowers and journalists in the country in efforts to hold perpetrators of state capture to account. 

This comes at a significant time in South Africa, ahead of the 2024 national election. The struggle against state capture and corruption in South Africa is a struggle for human rights. This is why continued commitment to the implementation of the Zondo Commission’s recommendations and the vigilance of civil society remain important. As the CSWG, we recognise that this is a critical moment for South Africa. There is an opportunity to ensure accountability and justice for years of corruption and maladministration, and to institute key reforms to build a capable state to ensure that it works for the benefit of all. 

The post  A Collective Civil Society Response to the Zondo Commission and the State Capture Report  appeared first on Open Secrets.

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.

The post Injustice and Impunity: Crime and corruption in austerity’s wake appeared first on Open Secrets.

Beyond The Headline with Aldrin Sampear

Civil Society organisation, Open Secrets and Investigative organisation, The Sentry have released a join report shedding light into how Zimbabwean businessman and presidential advisor, Kudakwaqshe Tagwirei allegedly moved funds from the Zimbabwean Reserve Bank to London, using false invoices and offshore accounts. The report titled ‘Fronts, Fakes, and Façades: How South African and Mauritian Enablers Helped Move Millions from Zimbabwe to Britain’ reveals the role of professionals and institutions in facilitating corruption and illicit financial flows from poor countries to the West. We’re now joined by Michael Marchant, Head of Investigations at Open Secrets.

The post SAfm | False invoices are alleged to have been used to transfer funds from the Zimbabwean Reserve Bank to an offshore account in London appeared first on Open Secrets.