Johannesburg - A Special Investigating Unit (SIU) probe authorised by President Jacob Zuma into the R650 million driving licence card tender – awarded to a company previously owned by his controversial ex-financial adviser Schabir Shaik – will not cover payments allegedly made to Zuma and his spindoctor Mac Maharaj.
Zuma and Maharaj allegedly benefited from proceeds of the tender awarded by the national transport department to Prodiba, in which Shaik’s Nkobi Holdings had a stake.
Shaik, now no longer a Prodiba shareholder, was forced to sell his stake in the company after his fraud conviction.
Maharaj was transport minister when Prodiba was awarded the tender on October 4, 1996, then valued at a maximum of R263m and a minimum of R200m over an initial period of six years and five production years.
It increased to a reported R650m a few years ago, while in 2006 City Press reported that Prodiba had generated R2.055 billion through licence fees and that its standard share was R40 for each driving license produced which could increase to R60 depending on the volume of cards manufactured.
The agreement between Prodiba and the department was signed on February 28, 1997. However, the SIU investigation will not include the period in which Zuma and Maharaj are said to have benefited.
A draft report of a forensic investigation conducted by professional financial services firm KPMG, which was part of the state’s case in Zuma’s now aborted corruption trial, reveals that “part of the funds advanced to and on behalf of Zuma was written off as development costs against Prodiba”.
According to the report, this write-off occurred against a fictitous non-distributable reserve created in the records of Shaik’s company Nkobi as it did not have any distributable reserves at the time.
The report also shows that the write-off was reversed after it was discovered by the National Prosecuting Authority during its investigations.
The KPMG report states that Zuma experienced financial difficulty from early January 1995 after he was issued a letter of demand from his banker at the time for repayments on a mortgage bond in arrears. Shaik bankrolled Zuma between October 1995 and July 2005.
The convicted fraudster also facilitated a trip to the US for Maharaj, who travelled with his wife and two children between July 13 and July 17, 1996, according to the KPMG report.
The report shows that on March 3, 1997, a few days after Prodiba signed the deal on February 28 and nearly eight months after the US trip, Maharaj wrote to Shaik thanking him for facilitating the trip and also apologised for not communicating with him earlier, blaming his hectic government schedule.
In his letter, Maharaj enclosed a cheque of more than R15 000 as payment for the “hotel and transport arrangements” during his US trip.
Shaik paid about R8 100 of the R15 000, according to the report.
The SIU investigation, which Zuma authorised earlier this month, will cover the period between October 2005 and this year.
Acting Transport director-general Mawethu Vilana said he was not aware why the probe would only start from October 2005 and not in 1996 when the contract was awarded.
“The issue is when the contract was extended. It was a normal award (of the contract), there’s no issue with the award,” he said.
At the centre o f the probe will be the department’s former director-general George Mahlalela, who, according to court papers, signed the third extension of Prodiba’s tender.
Mahlalela signed the third extension of Prodiba’s tender on February 1 last year a few weeks before his contract was due to end on February 24.
Earlier this year, the North Gauteng High Court ordered Transport Minister Dipuo Peters and Vilana to pay Prodiba nearly R122m in overdue payments.
The department had refused to pay Prodiba despite the company obtaining court orders forcing it to do so. Among the reasons cited by the department for its failure to pay were that Mahlalela extended Prodiba’s contract without cabinet’s approval and without complying with the Public Finance Management Act and National Treasury regulations.
The court battle is heading to the Supreme Court of Appeal (SCA) after the North Gauteng High Court refused Peters and Vilana leave to appeal in November last year. The Sunday Independent understands that the minister and her department have since petitioned the SCA to hear their appeal.
Vilana told The Sunday Independent that the department was recently granted leave to appeal by the SCA.The transport department wants the government’s printing works to take over the production and manufacture of smart card driver’s licenses.
Prodiba chairman Johan Vorster said the company was not concerned about SIU investigation because the process has already been scrutinised by the North Gauteng High Court, which ruled in their favour.
“There’s nothing the SIU will find, we’re not afraid of the SIU and we’ll give our full co-operation to the investigation,” Vorster said.
He said the probe would most likely focus on the department’s internal processes. According to Zuma’s proclamation of the probe, the SIU will investigate the extensions of the tender and whether these were “not fair, competitive, equitable or cost effective” and any unauthorised, irregular, fruitless and wasteful expenditure incurred by the transport department.
Maharaj failed to respond by the time of going to print.