by Luvano Ntuli for Open Secrets
6 June 2022
State capture relies on a vast network of actors, many of whom have evaded accountability for their role in derailing state-owned entities. This network includes lawyers who have disregarded their ethical and professional duties in service of corrupt networks. Refiloe Mokoena, an attorney who served as a board member at several state-owned entities (SOEs) and as an acting judge, is one such lawyer implicated in state capture.
The streets of Sandton and Pretoria are lined by gilded buildings housing South Africa’s top law firms. Many of these filled their pockets with state capture loot and continue to work as the enablers of economic crime. The fact that these corporate behemoths have gotten away with their crimes talks about their cunning and the incapacity of the State. To understand the extent of this problem it is helpful to focus on lawyer who represents a case study of what is wrong with our accountability mechanisms and how some lawyers seem to be able to act with impunity despite their complicity in crimes with devastating consequences.
Throughout her career Refiloe Mokoena has had significant influence in an array of SOEs. She is also steeped in controversy. She has been implicated in wrongdoing during her tenure as a board member at Denel, and in her personal capacity at the South African Revenue Service (SARS). Notably, during a period where she sat as acting judge in the Free State High Court, she was linked to the Free State Asbestos tender scandal.
In each of these cases, Mokoena has exhibited a blatant disregard for her responsibility as an officer of court, failing to ensure that the law is observed and upheld. It is, therefore, alarming that she remains a practicing attorney and director at her law firm, Refiloe Mokoena Attorneys. Aside from her dismissal from SARS, Mokoena has not yet been appropriately held to account for her role in state capture.
Mokoena began her career as an attorney in 1990 and has worked at several law firms. She has since held various executive positions and directorships at public entities. Between 2004 and 2007, she worked at the Independent Communications Authority of South Africa (ICASA) on the Complaints and Compliance Committee and on the Appeal Tribunal at the Broadcasting Complaints Committee of South Africa (BCCSA). She also served as the executive for Corporate Compliance and Regulation at Telkom from 2008.
She has served on the board of directors of Armscor in 2013 and Denel in 2015. In 2013, then Defence and Military Veterans Minister Nosiviwe Mapisa-Nqakula dismissed Mokoena from her position as Armscor deputy chairperson for her failure to fulfil her duties as a board member. These failures arose from the way in which she and General Moamela Motau, the former Armscor chairperson, mishandled various procurement projects.
Given the reasons for Mokoena’s dismissal from the Armscor board, it is concerning that she was subsequently appointed as a member of the state-owned arms company Denel’s board (also part of the Defence sector family of SOE’s) in 2015, and that in a similar manner, she neglected her duties as a board member through her inaction and failure to act in the interest of Denel.
The Former Minister of Public Enterprise Lynne Brown, herself the subject of state capture allegations, appointed Mokoena to Denel’s board of directors. The notorious 2015 board was integral in the capture and disintegration of Denel, by the Guptas and their allies. Under the board’s oversight and through its direct involvement, dodgy procurement processes, corrupt decision-making and general maladministration were rife. Denel was one of the enterprises investigated by the Zondo Commission. In the Commission’s second report, released in February 2022, Zondo found that Brown’s 2015 appointments deliberately facilitated the capture of the enterprise by removing a well-functioning and successful board.
The report made searing findings against Brown, Denel’s former chairperson Daniel Mantsha, and all of the board members for their role in the decline of Denel. According to the Zondo Commission, the 2015 board should be investigated for its conduct, particularly its suspension of Denel executives Riaz Saloojee, Fikile Mhlontlo and Elizabeth Afrika, who were fired unlawfully because they posed a threat to the Guptas’ attempts to capture Denel. The Commission recommended that action be taken against the 2015 board to declare the members as delinquent directors because of their negligence and role in facilitating corrupt decisions at Denel, finding that the board collectively failed to fulfil their fiduciary duties as directors.
The board’s actions harmed Denel significantly. It went from relative financial health in 2015 to teetering on the edge of bankruptcy by November 2021 when it owed R900 million to its suppliers and R650 million to employees, some of whom are still unpaid. In February 2022, Finance Minister Enoch Godongwana announced that Denel would receive R3 billion to settle its outstanding payments, but its survival remains uncertain.
Lawyers like Mokoena were directly complicit in Denel’s downfall. As a board member, she had the responsibility to ensure that the enterprise and its interests were protected. In her position, she would have been privy to key decisions that the board took, including endorsing improper procurement processes and the unlawful axing of three executives. Yet there is no evidence that she opposed these decisions at any point. Chief Justice Zondo named Mokoena as one of the Denel board members with a strong connection to the Guptas, indicating that she would have indeed played a key role in ensuring that the Gupta’s interests were pursued at Denel, which was a common theme in SOEs that were captured by the family. The actions taken by the 2015 Board members indicate a clear objective to profit from dodgy deals to the detriment of the state. That Mokoena permitted this is a clear sign that she is not fit to hold the position of director. Yet our research indicates that she still serves as a director at other entities.
Dollars from Diamond Hill Trading 71
In October 2020, the Sunday Times reported that Mokoena, during her time as an acting judge in the Free State High Court in 2015, benefitted from the dodgy asbestos audit tender during Ace Magashule’s tenure as Free State Premier. Evidence gathered by investigators at the Zondo Commission shows that Mokoena received $4000 (roughly R54 000 at the time) towards her daughter’s tuition in the United States from Diamond Hill Trading 71. The company was part of a joint venture that received a tender from the Free State government to identify and remove asbestos from low-cost housing. Magashule’s office organised the payment after Mokoena met the former Premier in July 2015 in Germany. This arrangement occurred whilst Mokoena was a member of the 2015 Denel board.
Emails exchanged between Mokoena and Magashule’s office in July 2015 were made available to the Zondo Commission and show that Mokoena wrote to the office for the “purposes of settling [her] daughter’s university account”. In her initial email to the Premier’s office, she lists the cost of tuition, the date by which the tuition should be paid (before 31 July 2015), as well as the details necessary for the transaction. The first email request Mokoena made on 17 July 2015 occurred prior to her being appointed as acting judge, however, she followed up on the issue of the funds and received them in August 2015, and this was during her time as an acting judge. These emails also show Ignatius Mpambani, owner of Diamond Hill Trading 71, confirmed that payment had been made and that Mokoena expressed her intense gratitude. Magashule has denied any involvement in the process of awarding the tender or having received any kickbacks. Magashule and his co-accused are currently in court, after being charged with fraud, corruption and money laundering related to this tender. Mpambani was murdered in Sandton in 2017.
Mokoena has denied knowing the source of the funds that paid her daughter’s tuition. However, the evidence points to the contrary. Her connection to Magashule ensured that she benefited from the corrupt asbestos deal and her emails indicate that she knew that there was a third party involved in paying her daughter’s tuition. It is shocking that money that was allocated for public use instead funded the personal expenses of a relatively well-paid sitting judge. According to the Code of Judicial Conduct, it is improper for a judge in acting service to request or receive renumeration or gifts, and in this case funds for personal use, as this would essentially undermine the integrity of her office. Yet, it is precisely these arrangements and disregard for lawful practices that ensured that the state capture network was maintained. This can be seen in Mokoena’s role in unlawful conduct at SARS.
Stealing from SARS: Mokoena enables Gupta’s Capture
Mokoena joined the SARS executive committee as the chief officer for legal counsel in May 2017. By this time, Denel was facing major financial issues due to the conduct of the 2015 Board, which included Mokoena. Mokoena, alongside others, had been removed from their positions. That she was green-lighted to a top-position at the countries tax collector is a clear indictment of the leadership of SARS under another significant person of interest in state capture – Tom Moyane.
Mokoena joined SARS during Tom Moyane’s tenure as SARS Commissioner and the Zondo Commission found that Moyane himself was an integral part of the capture of SARS, through his connections to former President Zuma, consulting giant Bain and Company and the Guptas. During this time, Mokoena was part of the executive committee at SARS responsible for making important financial decisions. Mokoena’s involvement in corruption while employed as one of its top inhouse lawyers at SARS is extremely significant and forms part of the broader capture at the entity.
During 2016, major banks in South Africa closed several accounts of Gupta-linked companies which meant that these companies could not receive VAT refunds through their accounts. According to the findings of the Nugent Commission of Inquiry into SARS, some of these companies subsequently had the VAT refunds paid into third-party accounts. This is in clear violation of South African Tax Law. One company that received the unlawful payments was Oakbay Investments (Pty) Ltd, which is one on the Gupta-affiliated companies at the core of the capture of state-owned enterprises.
Mokoena signed off on VAT refunds, valued at R150 million, for Oakbay into a third-party account. In doing so, Mokoena facilitated an unlawful payment. It is inexplicable that a legal professional in a senior position in the SARS legal department would make a decision in violation of tax laws. Furthermore, even if Mokoena had been uncertain, she authorised the payment against the advice of SARS executives who had the necessary tax and legal knowledge and who had indicated that doing so would be unlawful.
Why did she do so? According to the Nugent Commission’s findings, Mokoena was told by Moyane to resolve the issue of the payment, and she went ahead and signed off on them. Her actions here speak to the nature of the relationship that the Guptas had with the entity under Moyane’s leadership. Judge Nugent noted that what Moyane did at SARS was more than mismanagement, but that he ‘arrived without integrity and [subsequently] dismantled the elements of governance one by one’. Mokoena’s facilitation of an unlawful payment speaks precisely to the type of erosion that occurred at SARS. Corrupt decisions were made to benefit the Guptas and Mokoena played an active role in this regard.
Mokoena was suspended by SARS in October 2018, seven months after Moyane had been suspended by Cyril Ramaphosa. She underwent a disciplinary hearing in 2019, and was subsequently dismissed from SARS in November 2019. A dismissal later upheld by the CCMA.
Time for accountability
Mokoena’s dismissal from SARS was necessary, but raises question around what the repercussions are for breaking the law. Mokoena, an attorney tasked with the responsibility of upholding the law, not only failed to do so, but has actively contributed a much larger culture of corruption in South Africa. Her involvement in different entities and her connections to individuals linked directly to fraud and corruption in the country are a perfect demonstration of how these networks in state capture are maintained, and how more often than not, these individuals remain unaccountable. A dismissal from a job is an inadequate consequence when laws have been broken.
Today, Mokoena still runs her own legal practice, Refiloe Mokoena Attorneys in Johannesburg. Her unwitting clients who read her credentials on LinkedIn and elsewhere would understandably think this is a lawyer with significant experience who can be trusted to act with integrity. The evidence suggests the contrary.
Mokoena has repeatedly exhibited a disregard for her duties both as a board member and a legal practitioner. As a board member, it was her responsibility to ensure that the Board of Directors acted in a manner that was in the best interests of the entity, but her complicity enabled the 2015 Board to run Denel into the ground. As an admitted attorney and acting judge, her role was to not only uphold the law to the highest degree herself, but to ensure that those who break the law are held to account and she failed on both accounts. It is therefore crucial that Refiloe Mokoena should be investigated by law enforcement agencies and held to account for actions in enabling corruption in her various positions. Further, the Legal Practice Council (LPC) should investigate and consider a disciplinary process against Mokoena for her conduct as a legal practitioner, as there is no indication in public records that a complaint has been laid against her to the LPC. Finally, the Judicial Services Commission must investigate the allegations of improper gifts received by Mokoena and urgently consider submitting these for investigation by its Tribunal and sanction.
From what we can garner, none of this has happened. Open Secrets submitted detailed questions to Refiloe Mokoena via email and WhatsApp to which no response was received. If the most obvious cases of professional failure by the likes the of Refiloe Mokoena go unpunished does it not send a message to the profession that such practice is acceptable? For the rule of law to be maintained legal professionals like Mokoena need to be held to account as well as all enablers in suits drinking lattes in their corporate offices who profited from crimes that have had devastating consequences.
Unaccountable, we have not forgotten.