Unaccountable 00037: Daniel Mantsha- the slippery side of the Teflon attorney
By Luvano Ntuli
Lawyers and law firms were instrumental in the State Capture project. From prestigious Sandton white shoe firms to crooked small-time attorneys everyone feasted. One attorney who has not been held to account for State Capture crimes is the notorious Daniel Mantsha.
Daniel Mantsha is a man of many hats — attorney, director at state-owned arms company Denel, and legal counsel to former president Jacob Zuma, he has been active in both the private and public sector for years. Throughout his career, Mantsha has been embroiled in numerous scandals, he has been removed and subsequently re-admitted to the attorney’s roll and developed close connections with individuals implicated in State Capture.
Mantsha has been able to bounce back from scandal following his re-admission to the roll of practising attorneys in 2011. Open Secrets through its investigations can now reveal that the records and court papers for his readmission have seemingly disappeared which raises serious concerns about the conduct of the public institutions meant to hold him to account.
Despite the serious evidence against him, the Legal Practice Council (LPC) — responsible for regulating and maintaining the integrity of the legal profession — has thus far failed to hold him accountable. Law enforcement agencies have similarly failed to act despite evidence in the public domain and the recommendations of the Zondo Commission. It is essential that both act swiftly to hold Mantsha to account and demonstrate that no lawyer is above the law.
Destruction at Denel
Mantsha’s appointment as the Chair of the board of Denel was announced in July 2015 and coincided with the deep losses at Denel and its ultimate decline. This followed a controversial decision by minister Lynne Brown to overhaul the existing board under whose stewardship Denel had undergone a turnaround, generating healthy profits and an order book worth around R35-billion.
While Open Secrets investigations call into sharp question Denel’s and other arms dealers’ track records of profiting from arms sales to dubious regimes linked to human rights abuse — it is at least an undisputable fact that Denel was run as a tight financial operation. It achieved a clean audit from the Auditor General and it received accolades from several major financial institutions as well as the Treasury and the Departments of Defence and Public Enterprises.
Brown even praised Denel in her budget speech, delivered on 15 May 2015, on its performance and the preliminary figures that showed a net profit of R200-million at the time. Then inexplicably, a month later, Brown made the decision to replace the entire board, barring one member. Even more curiously, Brown veered away from due process and excluded senior members, such as the Deputy Director-Generals, from this decision-making process, claiming that their involvement may lead to corruption in the SOE.
While Brown maintained that her actions were entirely regular, the Zondo Commission found her actions and justifications “ludicrous”. It found that the real reason she excluded the senior officials from the process was because they would raise questions about the candidates that were chosen by the Guptas, such as Mantsha, as well as her own connection to the Guptas which had been established in relation to the board of Eskom.
The Guptas had been systematically capturing state-owned enterprises and they had their sights set on Denel. A key aspect of the modus operandi of State Capture was ensuring that people who were close to the Guptas were placed on these boards of SOEs to pursue their interests. The Zondo Commission’s findings concluded that the appointment of the 2015 Denel board and the retention of only one member of the 2011 board was part of the Guptas’ plan to capture Denel.
This was not the first attempt by the Gupta network to capture Denel. In early 2012, when Gupta lieutenant Salim Essa tried to set up a meeting between Denel CEO Riaz Saloojee and members of the Gupta family. Saloojee was pressured by the Guptas to open up the avenues for them to infiltrate Denel, but he insisted that they follow the proper processes, and directed them to Zwelakhe Ntshepe, who was Denel’s executive in Marketing Development at the time. When Lynne Brown replaced Gigaba as Minister, Saloojee was told by Essa and Ntshepe that the new Minister supported the Guptas.
The Guptas’ guy at Denel
Mantsha’s connection to the Guptas became apparent before Mantsha’s hastily announced appointment as the chair of the 2015 board. In early September 2015, Saloojee testified that Mantsha invited him for a meeting at the Guptas’ Saxonwold compound, where the Guptas expressed further expressed interest in acquiring one of Denel’s subsidiaries.
While Mantsha denies that he convened the meeting, the Commission found that regardless of whether he arranged it or not, his presence at a meeting with the Guptas discussing matters related to Denel indicated his willingness to “do the Guptas’ bidding without question”. Mantsha had cultivated a close relationship with the Guptas to the extent that they arranged Mantsha’s travel and accommodation to India and Dubai in October 2015.
The extent of Mantsha’s willingness to enable the Guptas capture of Denel would become clear very quickly. Once Gupta-aligned board members were appointed, they hastily went on to plot the suspension of three executives. The Zondo Commission found this process was “weaponised to serve a corrupt purpose”. Mantsha, as the chair of the 2015 board, was instrumental in their suspension.
On 9 September 2015, a meeting was held by the Audit and Risk Committee (ARC) of the Denel Board, including its new members, to discuss the acquisition of Land System South Africa (Pty) Ltd, later renamed DVS, by Denel. This deal had been completed by the previous board, with the assistance of external experts, to assist Denel in enhancing its equipment capabilities to increase Denel’s access to markets.
However, when the 2015 board came into place, it cancelled this process. Martie Janse van Rensburg who preceded Mantsha as board chair testified to the Zondo Commission that there was “no sound business reason” for this to have happened and its cancellation put severe financial strain on Denel. It later emerged that the DVS deal was used as a justification by the new board to suspend the executives in its quest to further the Guptas’ interests at Denel.
Following a security exhibition held in mid-September 2015 in the United Kingdom, during which Mantsha told Saloojee that the ARC was unhappy with Denel’s acquisition of DVS, Saloojee was called into a meeting with the ARC where he was asked to justify why he shouldn’t be suspended for his role in the DVS transaction. The Group Chief Financial Officer, Fikile Mhlontlo, and the Group Company Secretary, Elizabeth Afrika, were called into similar meetings. The executives told the ARC there was “nothing about the transaction that required an explanation”.
The three executives wrote a letter to the board maintaining their innocence against allegations of misconduct and arguing that the time that they had been given to respond to their allegations was insufficient. They did not receive a response to this letter but were instead called, separately, to meet with the ARC, as well as Mantsha and other board members, where they were each offered a three-month package if they would resign.
When the executives refused, the Denel board, led by Mantsha, instructed Dentons Attorneys to investigate the executives. In evidence presented to the Zondo Commission, it was shown that not only did the findings of the report not justify the suspensions, Mantsha reprimanded Dentons for this and called on them to create a fraudulent report that produced findings of misconduct by the executives. This is not conduct befitting a board member nor an admitted attorney.
Despite Mantsha and the board alleging that the executives were guilty of serious misconduct in the DVS deal, they did not initiate a disciplinary inquiry against them, instead offering them a payout. Mantsha claimed that he was trying to protect the reputation of Denel by quietly paying off the executive, but the Zondo Commission concluded that he knew that he wasn’t able to justify the suspensions and so sought to avoid a disciplinary enquiry where the executives could defend themselves. Ultimately, the executives relented and received almost R10-million in severance payout from the public purse.
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The payment was made despite the fact that Denel was experiencing severe financial constraints. Denel had taken out large loans to pay for the DVS acquisition, and the funds that would have accrued from the acquisition were needed to repay them. By terminating the arrangement with DVS, Mantsha and the board placed Denel in a precarious financial position. On top of that, Denel had to fork out cash to pay the three executives he had effectively ousted. The Zondo Commission found that through his actions, Mantsha and the board had failed in their fiduciary duties in accordance with section 76 of the Companies Act.
While Mantsha’s conduct at Denel was alarming, it was not the first time that he had been implicated in scandal. Just eight years before he was appointed as chair at Denel, he was struck off the roll of attorneys, following serious findings of unprofessional conduct. Given Mantsha’s suspension, and the findings of misconduct against him, he should never have been appointed to the 2015 board, and yet the Commission found that Brown did not conduct a background check on Mantsha and could not account for why she appointed him.
Mantsha the lawyer — fit and proper?
The law requires an attorney to be a fit and proper person. The essence of this requirement is that a legal professional must at least display integrity, objectivity, dignity, the requisite skill and knowledge of the law, and respect for the rule of law and legal order. In 2007 the High Court of South Africa was called to determine whether Daniel Mantsha met these requirements.
The then Law Society of the Northern Provinces (LSNP) brought the application due to very serious allegations against Mantsha. These included that Mantsha failed to keep proper accounting records for the trust account for Mantsha Attorneys, as required by section 78 of the Attorney’s Act. In addition, there were allegations of fraud in that approximately seven cheques were drawn by Mantsha for the purchase of clothing that was later dishonoured when presented for payment. Mantsha also used trust money belonging to Mantsha Attorneys for his personal use.
There were additional allegations that Mantsha acted in an unprofessional and dishonest manner while acting for his clients. In one instance, Mantsha applied for a default judgement in favour of a client for the sum of R1.5-million whilst he was aware that the matter would be defended by the State Attorney.
Mantsha’s defence was that his client drafted and filed his own documents and that his client was the one who applied for a default judgement. The court rejected this version, finding that an attorney would not let a layperson prepare and file their own pleadings and that a prudent attorney would have notified the court of his client’s actions, and Mantsha failed to do so.
In 2001, a client of Mantsha Attorneys reported Mantsha to the Law Society for being dishonest, deceitful, and failing to act with the necessary skill and care required of a practising attorney. They alleged that after having paid Mantsha’s fees he failed to provide any progress reports and began ignoring her attempts to contact the firm. Further, when she did receive correspondence from Mantsha, the information was untruthful and false.
The court had to consider at least four other complaints against Mantsha that alleged that he either was dishonest, deceitful, fraudulent or misappropriated funds while acting for his clients. The court rightfully ordered that Mantsha’s name be struck off the roll of attorneys on the basis that he was not a fit and proper person.
What is peculiar is that on 8 December 2011, just three years after this scathing judgment, Judges Fikile Charles Bam and Nomonde Mngobisa-Thusi found that Mantsha had been rehabilitated and was duly qualified to practice as an admitted attorney, and Mantsha was re-enrolled onto the roll of practising attorneys.
Procedurally, in terms of section 19(1) of the Attorney’s Act, Mantsha was required to deliver a copy of his application for re-admission to the LSNP and the secretary of the LSNP was required to inspect his application and certify that Mantsha complied with the requirements for re-enrolment, particularly that he had been rehabilitated and is a fit and proper person.
Open Secrets made numerous attempts to obtain this application. In September 2022, we wrote to the Legal Practice Council (LPC) asking for the records relating to Mantsha’s re-admission and brought the Zondo Commission’s recommendations regarding Mantsha to their attention.
The LPC — who became the custodians of the records of the Law Society of South Africa — confirmed that they did not have the application made by Mantsha and directed us to the High Court’s Archives department. The archives department in turn could not locate this file and stated that they do not have the file for case 25000A/2011 which is the file reference provided by the court order re-admitting Mantsha. Open Secrets requested the application from Judge Bam and Judge Mngobisa-Thusi and at the time of publishing had not received a response.
Section 30(3)(c) of the Legal Practice Act requires that the LPC keep a roll of practising legal practitioners and the particulars of the order of the court for which they have been readmitted. This is vital for the legal profession in that the public relies on the records of the LPC to ensure that the legal practitioners who act in their interest are in fact fit and proper and have been duly admitted as practising legal practitioners. Where the LPC fails in this mandate, they also fail the public.
Open Secrets contacted Mantsha to provide him with an opportunity to respond to the allegations in this article and the findings of the Zondo Commission. Mantsha hung up on Open Secrets investigators and subsequently blocked the number we used to contact him.
Time to hold the Teflon attorney to account
Mantsha’s re-admission as an attorney opened numerous doors for him. In 2014, he was appointed as the legal advisor for then Minister of Communications, Faith Muthambi (herself the subject of allegations of State Capture). It is in this role that Mantsha says he met the Gupta family and their associates. Mantsha was then appointed as the chair of the board of Denel in 2015 where he wrought the destruction described earlier.
Former president Jacob Zuma hired Mantsha as his lawyer in July 2018, following his decision to end his longstanding relationship with his previous attorney Michael Hulley. At the time, Mantsha had to represent Zuma on a number of different matters including opposing cases brought by the DA and the EFF to halt the state paying for Zuma’s legal fees, as well as the criminal case where Zuma faces charges of fraud and corruption in relation to the arms deal. However, Zuma fired Mantsha two years later in 2020.
Mantsha’s connection to the corrupt individuals involved in State Capture runs deep and he continues to represent them in the first months of 2023. Mantsha acts for Mbana Peter Thabethe in the Nulane trial where he is accused number one. This is the first major state capture matter that the NPA’s Investigating Directorate has brought to criminal trial. In addition to this, Mantsha also acts for Thabethe in the Estina matter — which is also said to be in the NPA’s sights for criminal prosecution.
Given his conduct during the State Capture years and the recommendations of the Zondo Commission, it is disturbing that Mantsha remains a practicing attorney and an official of the court. While the accused in the State Capture matter deserve their own legal defence, the courts should not give standing to individuals who have brought the profession into disrepute through their own wrongdoing.
The Zondo Commission found that Mantsha, and the other directors on the 2015 Denel board that aided the Guptas’ capture, acted in a manner that proved that they were unfit to be directors of a company and that proceedings be taken to declare them delinquent directors, yet Mantsha remains a director at his own law firm. The Zondo Commission furthermore recommended that the LPC investigate Mantsha and how he was readmitted as an attorney — suggesting that the process was questionable.
The LPC did not need to wait on the findings of the Commission to act and arguably should have proceeded sooner. Nonetheless, Open Secrets was pleased to receive confirmation in October 2022 from the LPC, in response to our correspondence in September 2022, that it was investigating Mantsha, as recommended by the Zondo Commission. In January 2023, it wrote that its probe into Mantsha was at an advanced stage and imminently would go to an ‘Investigating Committee meeting’ to decide on which steps to take.
While this suggests that the LPC is taking important action — the same cannot be said of law enforcement agencies. The Zondo Commission urged law enforcement agencies to investigate directors at Denel, including Mantsha, for possible contravention of sections 51 and 52 of PFMA for their role in the process of suspending the three executives. Instead of doing so, state prosecutors now stand across from Mantsha in court as he defends the rights of the State Capture accused.
Not only should Mantsha be struck off the roll of attorneys in South Africa, he should be in the dock facing prosecution for his role in State Capture. A failure to do so dishonours the integrity of our legal system and the peoples’ interest it is meant to serve.
Unaccountable, we have not forgotten.