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Sacks lifts the lid on massive Prasa-related corruption

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Forensic accountant Ryan Sacks last week blew the cover on alleged corruption and financial irregularities within and without the Passenger Rail Agency of South Africa (Prasa), exposing for the first time how billions in tax payers’ money was stolen.

Sacks opened a Pandora’s box into corruption during his explosive testimony at the Judicial Commission of Inquiry into State Capture before Deputy Chief Justice Raymond Zondo.

What was only meant to be a two-hour appearance at the commission turned into almost two days of riveting testimony. Evidence leader Vas Soni questioned Sacks about his findings into Swifambo, the now liquidated local company behind the notorious, ill-fated, multibillion rand tender to procure locomotives.

Four years ago, the Hawks commissioned Sacks, 43, the director of Crowe Forensics SA to present a cashflow analysis of the corrupt Swifambo tender. He presented his report, which revealed outrageous movements of funds linked to Prasa’s contract with Swifambo Rail Leasing (SRL).

His preliminary report alleged financial irregularities masterminded by a widescale web of corrupt activity within and outside the stricken government-owned entity. However, at the time, his report seemingly fell on deaf ears, he told the commission.

He asked police to furnish him with further information to complete his analysis. He was again ignored, and has not heard from the Hawks regarding Swifambo since.

Last week, however, Sacks was heard loud and clear when he presented his report after being summoned to do so. His report – until recently kept highly confidential – was presented to the public for the first time.

The report revealed the astonishing movement of funds linked to Prasa’s corrupt contract with SRL, a local company set up only a year before Prasa first advertised the tender. This was under the watch of then Prasa Chief Executive Lucky Montana, who oversaw the shady acquisition.

SRL was the front company in 2012 that clinched a R3.5 billion contract to supply 70 locomotives to Prasa. It had no track record in the rail industry. Swifambo, merely acting as a middleman in the corrupt deal, ordered the locomotives from Spanish supplier Vossloh España.

Prasa ended up paying Swifambo R2.6 billion and in return, received only 13 Afro4000 diesel-electric locomotives. These trains were too tall and totally unsuitable for South African rail specifications, as revealed by Rapport newspaper.

Sacks’ testimony exposed the hundreds of millions in tax payers’ money that should have been used to supply Prasa with new trains but was instead diverted. The money went to Auswell Mashaba, Swifambo’s former managing director, and businessman Makhensa Mabunda, as well as to several entities, high ranking public officials, and individuals linked to them.

Mashaba failed to appear before the commission last week in spite of being served with a summons.

“Last week was the first time that the public and a judge has had the opportunity to hear and see evidence of actual cashflows. It was the first time this real evidence has been produced,” said Bernard Hotz, commercial litigator and head of business crimes and investigations at Werksmans Attorneys.

“Instead of false allegations about Werksmans being a white monopoly capital law firm that was unlawfully appointed to investigate Prasa, the public and the judge focused on the large-scale theft of billions from Prasa, and got to see where those billions went,” Hotz told the SA Jewish Report this week.

According to Sacks, Werksmans Attorneys was appointed by Prasa in 2015 to conduct a forensic investigation into various instances of irregular, fruitless, and wasteful expenditure incurred by Prasa, which had been outlined by the auditor general. Crowe Forensics was appointed by Werksmans as expert forensic accountants to assist it. Sacks was appointed by the Hawks to perform a cashflow analysis relating to the Swifambo tender debacle.

Sacks’ testimony last week revealed how Swifambo funnelled about R80 million of its Prasa earnings to Maria Gomes, an Angolan businesswoman with strong ties to former President Jacob Zuma, and to George Sabelo, a lawyer also with close ties to Zuma. Mashaba has stated in an affidavit that Gomes and Sabelo were introduced to him as fundraisers for the African National Congress. Mashaba allegedly took a handling fee of R8 million for this.

“My report shows payments linked to Mashaba amount to millions,” said Sacks.

The Jacob Zuma Foundation was also shown to have received thousands of rands from Swifambo.

Swifambo was going to earn only about R118 million from the entire deal, according to the contract. Of the R2.6 billion Prasa paid Swifambo, Vossloh had received R1.8 billion.

About R600 million was pocketed by Swifambo, and disbursed inter alia to a number of beneficiaries.

Mabunda received more than R50 million from Swifambo, and was paid a further “consultancy fee” of R88 million by Vossloh when the contract was concluded, records show.

Out of the first payments that were made by Prasa to Swifambo, Vossloh received its first payment only about 116 days after Prasa had paid out the money, the report revealed.

Before that time, there were a lot of payments to various beneficiaries, namely to Mabunda’s group of companies.

The company Sebenza Forwarding, to which former Prasa chairperson Sfiso Buthelezi (former deputy finance minister) is linked, was paid just less than R100 million, according to the report.

As background to the saga, in July 2017, Johannesburg High Court Judge EJ Francis ruled that Prasa had awarded the contract to Swifambo through a “corrupt tender process”, and that Swifambo acted as a front for Spanish manufacturer Vossloh. The court ruled that the contract needed to be set aside.

Swifambo took the matter to the Supreme Court of Appeal (SCA), where the SCA agreed that “the tender was procured through corruption”. It also affirmed the high court’s decision that Swifambo had been part of a “fronting practice”. The SCA confirmed that the Afro4000 locomotives Swifambo delivered to Prasa weren’t suited for South African railway lines.

“There’s a sense of vindication,” said Hotz, “At long last the public and Judge Zondo can truly understand admissible evidence and cashflows that show how much was stolen from Prasa and who benefited. It’s high time that people go to jail for this.”

Sacks told the SA Jewish Report, “The financial information shows that this whole Swifambo tender was one massive corrupt exercise. Officials running the state-owned enterprise wanted money and the best way to get it was through procurement and the vehicle within procurement was the tender. They set up fronting companies, gave false motivations for why they needed to spend money, and there was collusion on multiple levels to sign the multibillion rand contract. People allegedly stole money before making the first payments to the supplier, it was brazen.”

Sacks is busy doing a forensic analysis of the VBS banking scandal. We should be seeing a lot more of him in the future.

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1 Comment

1 Comment

  1. Barry

    Mar 11, 2021 at 11:03 am

    Nice to see

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BDS attack on Unterhalter ‘defamatory and shameful’, says SAJBD

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The South African Boycott, Divestment, Sanctions (BDS) Coalition this week tried everything in its power to stop esteemed Gauteng Judge David Unterhalter from being interviewed by the Judicial Service Commission (JSC) for a position on the Constitutional Court.

In spite of its venomous attack on the judge for his association with the South African Jewish Board of Deputies (SAJBD), his interview went ahead.

After it was brought to the JSC’s attention by BDS, Unterhalter was grilled about his involvement with the SAJBD. Unterhalter briefly assisted the board with the upliftment and welfare of the Jewish and broader community during the direst phase of the COVID-19 pandemic last year.

The BDS coalition earlier this week vehemently opposed Unterhalter’s candidacy. In a letter of complaint to the JSC, the loosely formed coalition accused the SAJBD of being “akin to the Broederbond”, serving as a “conservative organisation that supports and minimises the actions of the Israeli apartheid state”.

It said Unterhalter couldn’t “honestly proclaim to be a supporter of human rights for South Africans” and be a member of the board.

Unterhalter is one of eight candidates being interviewed by the JSC for two vacancies on the Constitutional Court bench. It was announced on Wednesday that he did not make the shortlist for appointment.

During his interview on Tuesday night, Unterhalter said he was asked to serve on the board last year during the pandemic. “You should understand, the SAJBD is concerned with the welfare of the Jewish community, with old-age homes, and burial societies,” he said. “It’s also concerned with people who have fallen on hard times generally, but particularly now in the pandemic, and assisting other communities where there is need and hardship.”

He explained that the board’s other concern was antisemitism, and preventing it.

“It’s not a body that promotes Zionism. It’s a body that has existed for well in excess of 100 years, and its precursor organisations many decades before that. I went onto it because it seemed to me to be about assisting – to the extent that I could – with welfare issues for communities in sometimes very dire need. And I don’t therefore think it’s concerned with promoting Zionism. There are other organisations that do so, but I have no affiliation or connection to them.”

He said that from time to time, the SAJBD engaged in litigation against hate speech concerning antisemitism and on occasion, matters had gone to the Constitutional Court. “It did seem to me that in those circumstances, if I was going to offer myself as a candidate for judicial office in the Constitutional Court it would be appropriate to step away from that organisation because it does have this role, and whatever I might have been able to do by assisting welfare in a time of great need must perhaps yield to the perception that one shouldn’t be connected to a body that is engaged in litigation.”

It was for this reason that Unterhalter stepped down from the SAJBD.

“I don’t think my connection in accepting a position on the SAJBD is one that impacts and is connected to Israel and the Palestinian and Israeli conflict, which is an entirely separate matter,” he said.

He stressed that the Jewish community was made up of people with “radically different views” about Israel and the Israeli/Palestinian debate. “Because members of the Jewish community are so varied in their views across the board on this point, I would have been very uncomfortable to be in an organisation that took a particular position on that issue,” he said. He stressed that he saw taking on this SAJBD role as “being able to do something for welfare”.

Asked about his views on a solution to the Israeli-Palestinian crisis, he replied, “A two-state solution, although it’s now unfortunately one that seems to enjoy much less currency than it did in decades gone by, remains the only solution I think feasible, but JUST in what is a hugely complicated and difficult conflict.”

The SAJBD on 14 April lambasted BDS for attempting to have Unterhalter rejected from applying for this position, describing the organisation’s efforts as “yet another shocking display of bigotry and intolerance”. The board said it was an attempt by BDS to “sow division and hatred in our society”.

SAJBD national director Wendy Kahn, said: “When calls are made for Jews who serve on the Jewish community’s democratically elected representative body to be excluded from public service, it amounts to gross antisemitism.”

“There is a long and dishonourable history of Jews being targeted for boycotts and other discriminatory treatment on the basis of their religious and/or ideological beliefs,” the board said. “The demand by the SA BDS coalition that anyone associated with the SAJBD be denied the right to serve on public bodies like the Constitutional Court is just the latest chapter in this shameful saga.”

It said that throughout its existence, the BDS movement had “persistently incited hatred” and “even harm” against the mainstream Jewish community and its leadership.

Milton Shain, a local antisemitism expert and emeritus professor of history at the University of Cape Town, said, “Identifying as harmful to career prospects involvement in a legitimate Jewish organisation which serves a specific minority that enjoys full constitutional rights reeks of antisemitism.”

He said it was “preposterous” to penalise someone for generously assisting a legitimate civic organisation in a democratic country.

“The SAJBD has a proud record of dealing with issues pertaining to Jews and safeguarding the interests of this tiny community, which has never numbered more than 120 000 and numbers today a mere 50 000. It seems to me that those criticising Judge David Unterhalter are confusing the board of deputies with the South African Zionist Federation, which deals with issues pertaining to Zionism and the state of Israel,” Shain said.

“Even if this is the case, it needs to be noted that the South African Zionist Federation is a legitimate civic organisation and involvement in its affairs shouldn’t preclude any possibility of representing the legal [or any other] fraternity at the highest level. Some of the greatest legal minds in the country have enjoyed associations with both organisations.”

Retired Judge Dennis Davis, who previously served the community as Cape chairperson in 2004, told the SA Jewish Report it was “an outrageous complaint” by the anti-Israel lobby.

“It’s irrelevant. It’s not as if he is doing more than promoting the welfare of his own community. When I last looked, it wasn’t illegal to be a Jew in South Africa. It’s a right to serve your community and its local welfare.”

He said he thought Unterhalter was a hugely deserving candidate for the esteemed position, but agreed this was “a sensitive issue for obvious reasons”.

Mark Oppenheimer, an advocate at the Johannesburg Bar, said Unterhalter was “internationally regarded as a jurist of the highest calibre”.

“Before he was elevated to the bench, he appeared before the Constitutional Court in a range of landmark cases that have vindicated fundamental human rights for all who reside in our country. He would be an outstanding candidate for a position on our apex court. The attack launched by BDS demonstrates its venomous attitude towards South African Jewry and Israel,” he said.

A well-known Cape Town advocate who asked not to be named for professional reasons described the BDS complaint as “toxic”.

“It’s appalling, blatant antisemitism, and many of my colleagues who aren’t Jewish agree with me,” he said.

Unterhalter, a former winner of the Professional Excellence Award at the Absa Jewish Achiever Awards, was born and raised in Johannesburg. He attained his BA degree from the University of Cambridge, LLB from the University of the Witwatersrand, a Bachelor of Civil Law from the University of Oxford, and an MA from Cambridge. In 1990, he was called to the Bar in South Africa, where he practised as an advocate for 27 years. He was appointed judge in 2018, and has since presided over a number of high-profile cases.

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Schoub allays fears about vaccine red flags

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It has been a week of high drama on the global COVID-19 vaccine stage as niggling concerns about both the Pfizer BioNTech and Johnson & Johnson vaccines have raised red flags for different reasons.

This week, Health Minister Dr Zweli Mkhize halted the Johnson & Johnson vaccine rollout after the United States Food and Drug Administration (FDA) made a similar decision. The FDA reported that six women had developed blood clots soon after getting the vaccine. More than six million Americans have so far received the Johnson & Johnson vaccine.

This is the second time South Africa has paused the rollout of a vaccine, causing concern among the community.

Pressing this pause button caused “quite a bit of confusion and even anxiety in the general public”, said Professor Barry Schoub, emeritus professor in virology at the University of the Witwatersrand and the former director of the National Institute for Communicable Diseases.

He explained that built into the regulatory requirements for the licensing of the rollout of a vaccine programme like this is a vigilant lookout for any signals potentially relating to safety.

The report from the US, which like South Africa is extensively rolling out the Johnson & Johnson vaccine, “constitutes one of these safety signals”, he said. “Even if the incidence of one in a million is extremely rare, nevertheless it does need to be investigated as part of the protocol in order to make absolutely sure that the vaccines do meet all safety standards.”

Schoub said it wasn’t a suspension of the rollout, but “merely a temporary pause for a few days at most”. During this time, investigations will be carried out to see if these reports carry any meaningful signal about safety. It was a routine response to a reported safety signal, as rare as it is.

Meanwhile, red flags were also raised when the results of an Israeli study found that the South African coronavirus variant was more adept at “breaking through” the Pfizer vaccine. Israeli scientists said more research was needed.

Israel predominantly used the Pfizer vaccine to vaccinate millions of citizens.

Schoub said the scientists had made interesting observations, but as the authors stated, they were preliminary, and they couldn’t draw any real conclusions from this study.

He explained that there were several important limitations to the observations. The sample size was small – “too small to derive any significant statistical meaningfulness”.

The “breakthroughs” occurred from two weeks after the second dose. “We know that the efficacy of the vaccine matures and starts being fully effective only from four weeks onwards,” Schoub said.

There was no mention of the clinical manifestations of the breakthroughs, he said.

“Were they symptomless, or only mild symptoms? The latter is important as it’s known that the Pfizer vaccine is a potent stimulator of the immune system and elicits very high levels of neutralising antibodies, so that even if there is a reduction of activity against the variant, adequate levels of neutralising antibodies still remain to prevent at least severe disease, even if mild disease isn’t prevented.”

He said if it didn’t regularly prevent mild illness, “this can be tolerated”, as we do anyway in the case of common colds and flus.

He assured that the scientific data did suggest that the Pfizer vaccine would be very effective in preventing at least severe disease and hospitalisation against the South African variant from four weeks after the second dose of the vaccine.

“Nevertheless, until the pandemic is brought under control, it’s mandatory that all infection-prevention precautions – the non-pharmaceutical interventions – are maintained,” he said.

Schoub said that he was sure that interesting data would be forthcoming from Israel, which is in a pivotal position to carry out these studies following its highly successful mass rollout supported by an excellent data monitoring resource.

Mkhize announced on 14 April that a batch of the Pfizer BioNTech vaccine will arrive in South Africa in May.

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UCT lecturer’s Hitler comment causes outrage

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The fact that a high-level University of Cape Town (UCT) lecturer told his students that “Hitler committed no crime” seems too unbelievable to be true, but it happened on 7 April 2021, on the eve of Yom Hashoah.

The phrase was uttered in a pre-recorded “introduction to political science” lecture by Dr Lwazi Lushaba, a lecturer in the political studies department at UCT, for first-year students. His only response to questions by the SA Jewish Report about his comment was, “please watch and be educated”, attaching the lecture and signing off as “Commandante Lushaba”.

During the talk, he claimed that politics hadn’t been informed by the lived experiences of black people, and that it took “what Hitler did to white people” to have massacres recognised in political science. “All Hitler did was to do to white people what white people had reserved for us – black people,” Lushaba said. “And so his crime, if he had a crime, was to do unto white people what white people have thought was right to do only to black people.” He went on to say that the Holocaust mustn’t be prioritised over other massacres.

The comments have sown deep division, and have been hijacked by some wanting to criticise Israel and the Jewish community. However, leading educator Professor Jonathan Jansen tweeted, “From the Wits student, Dlamini, to the UCT lecturer, Lushaba, the positive referencing of Hitler is more than attention-seeking behaviour by the intellectually vacuous. They reveal the utter depravity of the public discourse on university campuses today.”

The Democratic Alliance (DA) is to lodge a complaint against Lushaba with the South African Human Rights Commission. “The Holocaust was unequivocally a crime against humanity orchestrated by Hitler. The DA therefore strongly condemns the comments made by Lushaba,” said DA MP Natasha Mazzone.

“His comments weren’t only racist, offensive, and vile, but also completely insensitive to the victims and survivors of the Holocaust and the Jewish community as a whole. In remembering the victims of the Holocaust, we must place a renewed sense of responsibility on those in positions of power and influence to defend the truth and defend our democracy against any racist or antisemitic sentiments.”

“Lushaba has a long history of offensive and controversial actions,” Mazzone said. “In 2019, he allegedly took exception to one of the contenders in UCT’s election of its dean of humanities being Tanzanian and not South African. In an interview with Power FM, Lushaba stated that “reason and rationality are white”. Lushaba was also suspended by Wits [the University of the Witwatersrand] in 2015 for “participating in activities which weren’t conducive to free and fair elections, and were intolerant to a democratic society”.

The DA urged the institution’s vice-chancellor, Mamokgethi Phakeng, to place Lushaba on suspension pending the investigation. But UCT’s students’ representative council (SRC) has defended the lecturer. SRC chairperson Declan Dyer said it noted the public reaction, but the comments had been taken out of context, and were part of a larger critique of political science.

Student responses have varied. Jewish student Sam McNally, who is studying for a Bachelor of Arts in English and politics, told the SA Jewish Report, “As someone who has watched the lecture in its entirety, I believe Dr Lushaba’s point about the hypocrisy of ‘Western’ or ‘white’ political science holds up, but only in a very general sense. But his argument neglects to mention that Jews at the time weren’t exactly considered white and certainly weren’t considered such by eugenics, the prevailing racial ‘science’ of the time that formed a large part of Hitler’s justification for his actions.

“My main issue regarding the statement that ‘Hitler committed no crime’ is that it bears little to no relation to the point [Lushaba was trying to make],” continues McNally. “White people being hypocritical about genocide has nothing to do with Hitler’s criminality. As to whether Dr Lushaba meant something different by his comment – which is a theory I have heard postulated, particularly in the form, ‘He didn’t mean to say that Hitler committed no crime, but that he committed no more of a crime than colonial architects of genocide’, my view is that if he meant that, then he should have said it.”

Another Jewish student, speaking on condition of anonymity, says, “I believe Dr Lushaba is very critical of white people. I believe he was very negligent in his use of words. However, I don’t believe his statements were hate speech or antisemitic. I believe he was trying to illustrate the point that the world took notice of atrocities only when they were done to white people.”

Professor Adam Mendelsohn, the director of the Kaplan Centre for Jewish Studies at UCT, says, “On the face of it, Dr Lushaba’s comments appear to justify the Holocaust and absolve Hitler of responsibility for mass murder. Hearing his comments in the context of the broader lecture, Dr Lushaba seems to be claiming that Hitler acted within the legal and institutional system of the German state, and was therefore – according to the prevailing terms of German law – guilty of no explicit crime. This interpretation may make sense given Dr Lushaba’s larger argument about the shift of thinking within political studies as well as his repeated recognition that Nazism was responsible for genocide.

“All that being said, the historical claims that Dr Lushaba makes – about Hitler’s rise to power, the role of law within the Nazi state, the nature of Nazi antisemitism, and the ‘whiteness’ of Jews, the timing of the Final Solution – betray significant historical blind spots and errors,” Mendelsohn says. “At many points in his lecture, dubious historical claims are yoked to polemical claims. He could do with reading much more about Nazism and the Holocaust.”

Mathilde Myburgh, communications officer at the Cape South African Jewish Board of Deputies, says the board has given videos of Lushaba’s lecture and supporting information to its antisemitism and legal subcommittee, which is investigating the matter.

“Academic freedom and freedom of expression mustn’t undermine the central aim of our Constitution, which is to build a united and democratic South Africa based on mutual respect, understanding, and human dignity. Universities help shape the minds of the future leaders of our country. The personal views shared by this UCT lecturer were received as hateful and deeply offensive, and should have no part in the academic syllabus of a public university,” she says.

“To our knowledge, Dr Lushaba hasn’t yet apologised for or retracted his remarks. We await his further engagement on the matter, and would be willing to meet him. We have reached out to Vice-Chancellor Phakeng, and the university has launched an investigation. We believe the matter is for UCT to investigate and respond before any further measures are considered.”

Tali Nates and Mary Kluk of the South African Holocaust & Genocide Foundation say, “The Holocaust is one of the most horrific periods in the history of mankind. It’s deeply disturbing to hear reference to this painful history in a manner so laden with irony and cynicism without consideration of the damage and hurt that this flippant reference can cause.”

Says UCT spokesperson Elijah Moholola, “The University of Cape Town has been alerted to and notes with grave concern comments allegedly made by a staff member during an online class. We are verifying all the facts. In the meantime, UCT is clear that all brutalities of genocide constitute both formal crimes against humanity and ongoing sources of pain. We distance ourselves strongly from any other view. The matter is receiving attention through all appropriate channels.”

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