Julius Malema on the ropes

ANC Youth League president Julius Malema partied up a storm in Mauritius at the weekend amid rumours of his imminent arrest by the Hawks following an extensive investigation of his financial affairs.

The Times has established that the net is closing in on Malema and that a joint investigation by the elite police unit, the Hawks and the South African Revenue Service (Sars), was "as good as complete" and that "it was just a matter of time" before authorities acted.

The investigation, to which senior officials were assigned and which began early last year, was triggered by reports of multi-million rand tenders allegedly irregularly awarded to companies linked to Malema.

Investigators homed in on a family trust allegedly used to launder illicit funds and bankroll Malema's lavish lifestyle.

The dealings of Malema's Ratanang Family Trust, its benefactors - understood to include senior ANC officials - and companies, including On-Point Engineering, which effectively decides on the awarding of contracts by Limpopo's roads and transport department, came under close scrutiny.

SGL Engineering, a sister company of On-Point Engineering - of which Malema was a director when it was awarded tenders worth millions by Limpopo municipalities - is said to be central to the investigation.

The investigation of the trust fund dates back to 2004, with SGL Engineers being under scrutiny as far back as 2007.

Although insiders insist the probe is not politically motivated, The Times has established that it has caused serious headaches for the authorities and tensions among Malema's allies.

Under investigation:

• The Hawks raided SGL offices in Polokwane about six weeks ago, confiscating computers and documents and interviewing staff;
• Expensive gifts made to Malema, including at least one luxury car from an Italian businessman, not being declared as required by the country's tax laws and;
• Malema's lifestyle - both the Hawks and Sars are scrutinising his assets and a lifestyle said to exceed his income;
• The tax compliance of all tenders awarded to companies linked to Malema; and
• Benefactors of the Ratanang Family Trust, most of whom have not declared their donations to Sars.

In the hope of immunity from prosecution, some of Malema's benefactors are said to be cooperating with investigators.

Under section 56(2) of the Income Tax Act, a donations' tax is levied at a flat rate of 20% on the value of the donation from the benefactor. Although the Hawks are yet to interview Malema, he has met several times with Sars regarding the financial standing of the trust fund, SGL Engineering and his tax liabilities.

Malema this weekend told the Sunday Independent: "They [the Hawks] must come and interview me . There is no problem. Ratanang has declared its taxes since inception, without failure."

Although there was no confirmation of a warrant having been issued for Malema's arrest, the newspaper reported that the Hawks have uncovered prima facie evidence of wrongdoing by Malema and that he is likely to face fraud, corruption and money-laundering charges.

Malema is also currently being investigated by Public Protector Thuli Madonsela and her office is also collaborating with the Hawks.

Yesterday Hawks spokesman McIntosh Polela said: "I can't say that it [the investigation] is complete or not. You will only hear from us when the time is right." Polela was, however, quoted in the Sunday Independent as saying: "There are a lot of companies that are involved that we need to look into and their finances and how those finances come in and get out and what those finances are used for."

There have been repeated calls for Sars to subject Malema to a lifestyle audit. Sars spokesman Adrian Lackay said yesterday the revenue service never publicly commented on the affairs of taxpayers, regardless of whether it was a business, trust or individual.

Malema is expected back in the country today after jetting out of Johannesburg on Friday for an all-expenses-paid weekend of booze, parties and luxury at the R10-million wedding in Mauritius.

Neither Malema nor ANCYL spokesman Floyd Shivambu could be reached for comment.