Oscar denies dealings with a man who paid for his home renovations
‘Paid R1.1m for doing nothing’
An Mthatha businessman has admitted the money he paid to ANC provincial chair Oscar Mabuyane’s home renovator was ultimately siphoned from the Mbizana municipality.
In a sworn affidavit, Mthombeni Projects director Lonwabo Bam alleged he was instructed by ANC provincial treasurer Babalo Madikizela to submit an invoice to the Mbizana municipality, claiming R1.1m, though he had done no work for it.
When the money was paid to Bam, he paid R450,000 to Mabuyane’s house renovator on Madikizela’s instruction.
Mabuyane said the money was a loan from Madikizela and that he had no dealings whatsoever with Bam.
A loan agreement between Mabuyane and Madikizela, dated July 23 2018, surfaced on Friday.
It said that Mabuyane approached Madikizela for a fixed loan amount of R450,000 which would be paid in full on or before August 8 2023.
In an interview on Friday, Mabuyane confirmed he approached Madikizela for a loan and they signed the agreement at law firm Sakhela Inc in East London.
Mabuyane said: “If the money had been paid directly into my account I would have known it didn’t come from Madikizela, because I was dealing with him and not other third parties.
“When Madikizela agreed to the loan he was just the treasurer of the ANC, not a member of the provincial parliament,” Mabuyane said.
Asked why he did not do due diligence when it came to making sure of where the money came from, Mabuyane said he did not see the need to because the money came from a colleague.
“It was not coming from a stranger. In this case the provincial treasurer is my colleague, he’s in the business and [had] the capacity to help me at that particular time.
“There wasn’t a need to be suspicious because it was a loan that I’m going to pay back, because I didn’t know the loan would bring what it’s brought in terms of media stories,” Mabuyane said.
Meanwhile, in his affidavit Bam wrote: “There [were] no services rendered by Mthombeni Projects [a plant hire company] to the municipality. Furthermore, there was no letter of appointment.”
Bam claimed further that messages between himself, Madikizela, ANC Eastern Cape office manager Mongezi Dyala and Mbizana’s municipal manager, Luvuyo Mahlaka, showed they were all aware the R1.1m was paid out with no work carried out.
“We were all aware that this money was just paid for nothing as there was nothing done for Mbizana municipality,” he wrote.
Bam’s affidavit was signed at the Butterworth police station on April 27.
Asked on Friday why he wrote the affidavit, Bam said: “It’s called whistle-blowing.”
Bam admitted in the affidavit that he was aware his involvement was wrong.
“It was unlawful. I knew very well that one day this money will be questioned. I have therefore decided to come forward and divulge this situation before it is investigated by the government.”
According to the affidavit Bam paid R350,000 in two transfers to a business account belonging to Madikizela.
An amount of R450,000 was paid to Allan Morran Designs by Bam, with the banking details again supplied by Madikizela. This money was used to pay for security upgrades to Mabuyane’s East London house.
“The transfer I made for them totalled R800,000 and the remainder of the R300,000 was paid to different accounts that [Madikizela] gave me,” Bam wrote.
He claimed he was first approached by Madikizela on July 24 2018, when he was instructed to send an invoice of R1.1m to the Mbizana municipality.
“I was also told for further information I must contact Dyala,” he wrote.
Bam said Dyala had told him to send the invoice to Mahlaka.
That same day, Bam e-mailed the invoice to Mahlaka’s municipal e-mail address.
But, he said, the next day Dyala called him and said Mahlaka had yet to receive it.
The invoice was then sent to a different municipal address.
“I wrote to [Dyala] saying ‘e-mail sent’ and he responded by saying ‘sure’.”
Then on July 30 2018, Bam said, Madikizela called him asking for a copy of the invoice, which was sent to him via WhatsApp.
The money was then deposited into the account of Bam in August, according to the affidavit. “At about 7.45pm I received an SMS from Mahlaka notifying me that he [had] done the payment.
“The payment was made to me but there was nothing I [did] for the municipality.”
He said the invoice he submitted was drafted by Dyala.
Bam said that in earlier conversations with Madikizela he discovered Mabuyane needed financial help on his house.
Madikizela, Dyala and Mahlaka have denied the allegations.
In an interview on Friday, Mahlaka said work had been carried out for transport services, totalling R1.1m, for the municipality.
“I am indeed aware money was paid. That was the amount we paid for transport services.”
Mahlaka said the allegations made by Bam were false.
“We paid a service provider and everyone is aware of the services rendered. After we paid, I don’t know what happened to the money.“Anyway, those guys [Madikizela and Mabuyane] are far removed from me ... I have nothing to do with them.”
He said the best way for the matter to be handled was through the courts.
“I will present all these issues in court and clear the name of the municipality.”
Dyala said he worked for the ANC and was not familiar with how municipalities worked.
“I am not aware what happened. I have not received any calls from Bam. I just know him from the [media article],” he said.
Madikizela on Friday denied the allegations made by Bam that he had instructed him to submit an invoice.
“As [Bam] has said, we were business associates and when you work with someone from time to time you do each other favours,” Madikizela said.
“I would transfer money to him and he would transfer money to me, sometimes we would do soft loans for each other and I would give him my plant to use, he was my friend.
“Him claiming to have invoiced for work that he did not do, I don’t know. All I knew is that he was expecting money from Mbizana local municipality to the tune of R1.1m and he sent proof that he had submitted the invoice and so we can expect to be paid.
“When he was paid he told me, and I told him where to deposit the money to other people that I owed money to and had made arrangements with them,” Madikizela said.
Madikizela said ordinarily he would have asked for the money to be transferred to his own account and made the payments himself but he wanted to avoid the red tape.
He confirmed the account number cited in the affidavit belonged to a company that he once served as a director.
Mabuyane’s attorney, Sakhela Ngqoqi, confirmed the letter was signed at his office in July 2018.
“There is an agreement between the two of them and they did in fact open a file with me because they wanted to safeguard their interests,” Ngqoqi said.