JUST IN | Municipal funds used for Mabuyane home renovations - Public protector

The R450,000  used for the renovation of Eastern Cape premier Oscar Mabuyane's home three years ago came from funds siphoned from the bank account of the Mbizana municipality.

This was a key finding of public protector Busisiwe Mkhwebane's investigation into money meant to be used for the transportation for the memorial service for Winnie Madikizela-Mandela in 2018.

She was speaking at a media briefing on Friday.

Her investigation came after Mthombeni Projects director Lonwabo Bam came forward in 2019, saying he had submitted a R1.1m invoice to the municipality though he had not done work for it.

The invoice, according to Bam, was made to appear that he had supplied transportation for Madikizela-Mandela's memorial service.

"Mabuyane irregularly and improperly benefitted from R450,000 of the amount of R1.1m which were public funds that went towards the renovation of his private house as set out in the evidence," Mkhwebane's report states.

Bam alleged he was instructed by ANC provincial treasurer Babalo Madikizela to submit an invoice to the municipality.

When the money was paid to Bam, he paid R450,000 to the contractor working on Mabuyane’s home renovations, allegedly on Madikizela’s instruction.

"The evidence of the circumstances relating to the payments made are such as to give rise to an irresistible inference that [then human settlements MEC Babalo] Madikizela and [Mbizana’s municipal manager Luvuyo] Mahlaka knew that R1.1m paid to Mthombeni Projects were derived from an unlawful activity, while there is a reasonable apprehension or probability that Mabuyane also knew or reasonably ought to have known the same," Mkhwebane said.

Mabuyane, who at the time was the economic development, environmental affairs and tourism MEC, said he had approached Madikizela for a fixed loan amount of R450,000 which would be paid in full on or before August 8 2023.

The agreement was signed at a law firm in East London.

Bam claimed further that messages between himself, Madikizela, ANC Eastern Cape office manager Mongezi Dyala and Mbizana’s municipal manager, Mahlaka, showed they were all aware the R1.1m was paid out with no work carried out.

According to the report, Bam paid R350,000 in two transfers to a business account belonging to Madikizela's wife.

He then paid R450,000 to Allan Morran Designs with the banking details again supplied by Madikizela.

This money was used to pay for upgrades to Mabuyane’s East London house.

Bam then paid R280,000 from the R1.1m into the ANC's fundraising account.

In the report, Mkhwebane said her investigation had found that the allegations were largely of a criminal nature and required a criminal investigation.

“The issues investigated and the evidence obtained are accordingly referred to the Head of the Directorate of Priority Crimes Investigations (Hawks) with a view for prosecution,” she said.

Addressing the media, Mkhwebane said the speaker of the Eastern Cape provincial legislature Helen Sauls-August must table the report in the provincial legislature within 60 days.

The speaker of the Mbizana council must also take urgent steps to ensure that the municipality takes appropriate disciplinary action against municipal manager Luvuyo Mahlaka.

Mabuyane labelled the report as "madness", saying he rejects it with "the contempt it deserves".

"I will be issuing a statement soon," Mabuyane said.

Mahlaka said he would wait to receive the report from the public protector before giving any comment.

“We will receive it from the public protector and council will process it. That is the procedure and I can’t comment on something that I don’t have,” Mahlaka said.

This is a developing story.

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