Joburg mayor Geoff Makhubo saw no conflict of interest in his company doing business with city
Johannesburg — City of Johannesburg mayor Geoff Makhubo has made the shocking revelation that he did not see any conflict of interest in continuing to “watch over” the financial affairs of a company he is the sole signatory of, despite it having a contract with the municipality.
Makhubo’s company, Molelwane Consulting, had been in business with the council since 2005 through to 2011. He said he had resigned his directorship of the company in November 2011 after he had entered public office in May 2011.
However, the contract between the city and Makhubo’s Molelwane Consulting was extended from 2011 to 2015 despite him then occupying the city’s Finance MMC position, a position in which his responsibilities included playing an oversight role in numerous contracts, including Regiments Capital, which had a partnership with Molelwane Consulting.
Despite this leaving him open to conflict of interest, Makhubo told the commission he did not see the conflict of interest in this arrangement.
It was also revealed that Molelwane Consulting’s partnership with Regiments Capital, which provided services to the City of Johannesburg, was a relationship from which Molelwane was the beneficiary of 10% of profits from the partnership which administered the City of Johannesburg’s Sinking Fund.
Reading from Makhubo’s sworn affidavit in relation to the conflict of interest, evidence leader Advocate Matthew Chaskalson said: “There was never a conflict of interest as the term of Molelwane’s agreement on the first Sinking Fund would have lapsed in January 2011, the year I took public office. Molelwane Consulting didn't continue providing services on the second as it did not participate in the RFP (Request For Proposal).”
“Further to this I declared all of my private interests upon taking public office as required by the law, in addition to this I subsequently resigned as a member of Molelwane Consulting and director of all other companies in November 2011. This was in line with my decision to use my skills as a public representative,” Chaskalson read from Makhubo’s statement.
Makhubo, who became MMC for Finance in the City of Johannesburg in May 2011, revealed to the commission’s chairperson Deputy Chief Justice Raymond Zondo and the commission’s evidence leader Chaskalson that, despite his resignation from Molelwane, he had kept his 67% share of the company although its business dealings with city had been extended.
The remaining shareholding of the company was in his mother’s name, the commission was told.
Chaskalson, leading evidence to Makhubo, said that in the eight year period between 2008 and 2016 the total amount that Molelwane received from Regiments was R35,7m.
Despite resigning from Molelwane, the commission said that Makhubo had continued signing off cheques ranging from R200 000 and R300 000 from the company although he told the commission that, despite his signature being on the cheques, he did not recall what the transactions had been for.
Makhubo also admitted that the bank account of Molelwane was still under his profile and that, to date, he remained the sole signatory of Molelwane’s financial affairs as he “still watches what is happening with the company”.
Makhubo said that although he was still managing the accounts of Molelwane Consulting he did not believe that there was a conflict of interest in this arrangement.