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Thu Oct 23 08:42:04 SAST 2014

Minister's boyfriend paid R6 million for four days' work

ROB ROSE, STEPHAN HOFSTATTER and MZILIKAZI WA AFRIKA | 03 February, 2013 08:11
BRIGHT RED: Communications Minister Dina Pule, known for her expensive tastes, in the distinctive Louboutin shoes she wore at the indaba

Communications minister Dina Pule's boyfriend was paid R6-million in management fees for the ICT Indaba after her department apparently forced the conference organiser to hire him.

This emerges from two secret documents seen by the Sunday Times: a forensic report by law firm Werksmans for MTN, and an affidavit that conference organiser Carol Bouwer submitted to parliament's ethics committee.

This means Pule's boyfriend, Phosane Mngqibisa, was paid nearly the same for a four-day event as the R6.4-million basic salary paid to former Telkom CEO Pinky Moholi for a year's work - and more than twice the R2.66-million paid to President Jacob Zuma last year.

News of Mngqibisa's windfall was met with disbelief by senior sources in the Department of Communications because they had little or no dealings with his events company, Khemano.

"Most of the work was done by us and Carol Bouwer," said one, who spoke on condition of anonymity. "We never saw Khemano."

The Werksmans report is the first confirmation that Pule's boyfriend scored millions personally from the inaugural indaba held in Cape Town in June last year. The probe was unable to expose MTN's role in the scandal because the company "specifically instructed [us] not to interview any of the MTN executives involved in the arrangements surrounding the ICT Indaba".

Before the indaba, Pule sent letters to Telkom, MTN and Vodacom "inviting" them to "cooperate with the Department of Communications and Carol Bouwer Productions" - an "invitation" that one company executive privately described as "near extortion". The companies provided a total of R25.7-million and Pule's department chipped in another R10.5-million for the event.

Days later the Sunday Times revealed that Mngqibisa -unbeknown to sponsors - had been given access to Bouwer's bank account and withdrawn millions to "pay suppliers".

The Werksmans report reveals that Mngqibisa also took a R6-million "management fee". Bouwer, the main organiser of the event, only received a R2-million fee.

Mngqibisa could not explain this discrepancy. "He was very evasive when questioned on how he arrived at the amount of R6-million as a management fee," the report states.

Mngqibisa declined to answer questions sent to him this week. "If you have any evidence of unlawful conduct or of any crime by any entity or individual in connection with the ICT Indaba, you are encouraged to provide such evidence to the authorities," he said.

The report said Mngqibisa was "economical with the truth and became quite flustered when certain pointed questions were put to him [and] he refused to answer the questions around his relationship with the minister. Obviously, inferences can be drawn from this refusal."

Mngibisa's R6-million fee was in addition to "expenses" he recovered. Bank statements show that he withdrew R100000 from Bouwer's account on February 23 last year to fly to Barcelona, Spain, to attend a conference also attended by Pule. Mngqbisa told the Sunday Times he used the trip to "market the inaugural ICT Indaba".

Questions remain about why MTN's R15-million was diverted into the account of a company called ABR Consulting at the last minute, when other sponsors paid Bouwer's company.

Werksmans was told not to dig too deep.

"On the instructions of [two MTN officials], we have not interrogated the statements any further, despite our mis-givings," the report said.

Because MTN effectively hamstrung the investigation, Werksmans could only conclude that "it appears at face value as if MTN's R15-million was, by and large, properly spent", although it warned "there might well have been sums taken from MTN's R15-million". MTN should bear part of the blame for the "insufficient controls" over how the millions in sponsorship cash for the indaba were spent, raising "red flags" over the explanations given, the report says.

Before Werksmans was hired, MTN blocked its own internal fraud investigator, Chris Baloye, from interviewing company officials. Baloye then produced what was said to be a damning internal report - and was fired for his troubles.

When the Sunday Times requested a copy of the Werksmans report in December, MTN refused. "The report was conducted for internal purposes and therefore cannot be used for public consumption," it said.

MTN spokeswoman Bridget Bhengu said the company was "satisfied there was no criminal activity, nor basis to consider recoveries of any monies".

Bouwer's affidavit submitted to parliament's ethics committee reveals that one of Pule's trusted confidantes pressured the organiser to include Mngqibisa's company, Khemano, among the indaba organisers.

"Khemano was recommended to me by communications deputy director-general Themba Phiri ... at a meeting I attended in Johannesburg," she writes.

Asked why he had pressured Bouwer to take on Mngqibisa's company, Phiri said yesterday he was "shocked by that revelation from Carol", but declined to elaborate "in order not to prejudice" a parliamentary ethics committee probe.

Bouwer said that, after the meeting with Phiri, she agreed that Khemano would be the indaba's "lead supplier".

- investigations@sundaytimes.co.za

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