CEO did not tell government that subcontractor could do job for R211m less

07 August 2020 - 21:48 By ERNEST MABUZA
State Capture Commission of Inquiry chairperson Deputy Chief Justice Raymond Zondo.
State Capture Commission of Inquiry chairperson Deputy Chief Justice Raymond Zondo.
Image: Alon Skuy

Blackhead Consulting CEO Edwin Sodi, whose company was part of a lucrative Free State asbestos contract in 2014, has admitted not asking the government to reduce the tender amount when another company offered to do the same job for R211m less.

Sodi was explaining how Blackhead and its joint venture partner Diamond Hill Trading — whose director was Ignatius Mpambani — found itself subcontracting its work to Mastertrade 232 for R44m.

The Blackhead-Diamond Hill Trading joint venture had been awarded a contract worth R255m in October 2014 to audit and assess Free State homes with asbestos roofing,

The joint venture later subcontracted Mastertrade 232 to do the audit. Mastertrade, in turn, subcontracted ORI Group to do the audit and assessment for R21.3m.

Mpambani was shot dead by unidentified assailants in Sandton in June 2017.

Testifying before the state capture inquiry on Friday, Sodi said Mpambani — whom he first met in 2010  — approached him in February 2014 with an offer to partner on a project to remove asbestos in Free State homes.

Sodi said Mpambani informed him he would speak to the relevant officials.

Mpambani came back and said the suggestion from the Free State was that a proposal must be submitted to the provincial department of human settlements.

A proposal was done, which Mpambani later hand-delivered to the department, Sodi said.

Sodi said the entire process must have taken about 10 months before the joint venture, formed during 2014, was awarded the contract later that year.

Sodi explained that Mpambani had come to him and told him about his friend, Sydney Radebe of Mastertrade, who had done this kind of work and whose business was slow at the time and needed work.

This guy was the wrong person to start working with
Edwin Sodi

Sodi said before the joint venture could start with the implementation of the project, Mpambani convinced him to listen to a presentation by Mastertrade.

“The presentation happened from Mastertrade represented by Mr Radebe and Mr [Kgotso] Manyike. They presented themselves to be both coming from Mastertrade. They said they were from Mastertrade.”

After the presentation, Sodi said he was convinced Radebe and Manyike could do the work but was worried about whether they could do it for R44m.

Sosi said as a businessman, he asked himself whether he should go back to the department and ask it to reduce the amount it had agreed to pay because his company had found someone who could do it for much less.

“I would be honest, I did not do it,” said Sodi.

He instead brought in an employee who was a manager in a similar project in Gauteng to be his eyes and ears in the Free State project.

Sodi said some months later he was told there was a dispute between ORI Group and Mastertrade.

“I asked who is ORI. They said ORI is Kgotso and Mastertrade is Sydney. I was under the impression these people worked for the same entity.”

Sodi said he asked Mpambani about this arrangement and asked why was he not honest.

“I confronted Mr Mpambani about this. His answer was like, 'I did not think it was necessary to disclose that information.'

“That is when I started picking up dishonesty from my partner but ... I discovered even worse that this guy was the wrong person to start working with.”

Sodi said his company went into litigation against Mpambani's company.

Sodi's evidence could not be completed on Friday and commission chairperson deputy chief justice Raymond Zondo said another date would be arranged for it to continue.