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Minister of Employment and Labour Thulas Nxesi cannot blame people for demanding a response to allegations that he and some of his colleagues are corrupt.
Nor can he blame people who believe the allegations that he tried to solicit a R500 million bribe in a suspicious R5 billion deal between a non-existing company and the Unemployment Insurance Fund (UIF).
The arms deal soon after the ANC came to power, the Gupta affair, illegal cigarettes, the VBS saga, and putting people’s lives at risk with tender fraud during the Covid-19 pandemic have earned government officials, ministers and politicians the prize of being considered corrupt until proven otherwise.
Most people would also think there is something fishy about the sale of SAA, the secretive Karpowership contracts and R9.8 million hidden in a couch in an empty house on a game farm.
Suspicious
In itself, the very idea of the UIF investing R5 billion in a new company with no track record, no employees and no operating structures to create thousands of jobs sounded suspicious the instant it became known.
In addition, Nxesi waited weeks before responding to allegations.
And then he came out fighting, promising legal action.
“Over the last few weeks, very serious allegations of corruption against myself and two of my cabinet, as well as the secretary-general of the ANC, have been widely distributed in both the electronic and print media.
“These allegations have been made by Mr Mthunzi Mdwaba, the CEO of Thuja Holdings and former chair of Productivity SA, in relation to a R5 billion agreement that was concluded in December 2022 between his company and the UIF.
“I should flag that this agreement was signed without the knowledge of the executive authority or of National Treasury.
“At the core, Mr Mdwaba alleges that I do not have a lawful or legitimate basis for stopping the implementation of the R5 billion agreement between his company and the UIF,” said Nxesi.
“The new, more recent allegation is that I would approve the implementation of the agreement to pay R5 billion into the coffers of his company in return for a corrupt fee of 10% of the contract amount – R500 million.
“Where would you even put/hide such an amount? How would I be able to siphon off money from a deal I have already stopped?”
Agreement
The agreement was signed on 14 and 18 December 2022 by Mdwaba and the then director-general of the Department of Employment and Labour, Thobile Lamati. The deal proposed funding for job creation projects to assist the UIF in creating employment at an initial cost of R5 billion.
Nxesi says the then-acting director-general of the department sent a notice to Mdwaba to tell him the agreement did not comply with applicable laws. The agreement was not approved by the labour minister and the finance minister and, thus, was “illegal and invalid”.
“I heard of this agreement only through media reports,” said Nxesi.
“The media raised several concerns about the process followed and the capacity of Thuja to deliver on the signed agreement.
“After considering the media reports and calls by, amongst others Cosatu, and following initial probing, I established that approvals by the UIF governance processes, including the interim Labour Activation Programme (LAP) National Adjudication Committee (LNAC), were not obtained and consequently instructed the accounting officer, in January 2023, to suspend the implementation of the project, and to stop any contemplated payments to Thuja.”
Nxesi has promised to take legal action against all the persons involved.
“There is nothing that could undermine the integrity of our democracy and system of constitutional governance more than false allegations that a group of cabinet members have, in a corrupt scheme, deliberately conspired to frustrate the implementation of a viable job creation project by demanding the payment of corrupt fees from a service provider,” he said.
“These allegations will now be tested in court. Today, I signed my affidavit in support of various orders, chief amongst [them] being the setting aside of the agreement. I have brought this application on an urgent basis.
“In that affidavit, I challenge Mdwaba to present his evidence in support of his allegations that I have demanded any payment of a corrupt fee in relation to the agreement.
“Mdwaba’s allegations of seeking bribes against myself, and others, are false and unsupported by any actual evidence. Let me be clear: I categorically deny these recent allegations of corruption.
“You must ask why Mdwaba waited nearly a year to come up with these allegations? Mdwaba will now have to prove these allegations in a court of law.”
Mudslinging
Nxesi aired his own allegations against Mdwaba.
“The source of Mdwaba’s bitterness towards me personally dates back to his failed attempt to secure the position of director-general of the International Labour Organisation (ILO) when government withdrew its support for his candidature after it emerged that he failed to disclose that the South African courts had declared him to be a delinquent director.
“Government was also made aware of a court judgment in the Western Cape that had found that Mdwaba is a lawbreaker, was not an honest witness and lacked the elementary attributes of good leadership for the position he held at the University of the Western Cape (UWC) as chairperson of council. In the circumstances, continued support for Mdwaba’s candidature would entail serious reputational risk for South Africa,” according to Nxesi.
He also requested the presidency to issue a specific proclamation to have this agreement investigated by law enforcement agencies.
“It seems that Mdwaba has not approached law enforcement authorities to report the alleged crimes because he is content with making unsupported allegations against me, in the hope that if he throws enough mud, some of it will stick.
“This strategy and the allegations will be tested in court. I have given Mdwaba the right platform to prove his claims and his right to the implementation of the agreement. I urge him to utilise the correct legal forum and to desist from the path of slander and libel,” said Nxesi.
Programmes
The Labour Activation Programme (LAP) was established under the UIF to alleviate unemployment in SA. It aims to stimulate job creation, enhance the employability of the unemployed, preserve existing jobs, and improve operational efficiencies of companies in distress.
It includes projects to train and retrain unemployed workers, combat long-term unemployment and reduce poverty, according to the Department of Labour.
It also manages the Temporary Employer-Employee Relief Scheme (Ters), a project that helped many during the Covid-19 pandemic. The aim is to enable the retention of workers in companies that are in financial distress.
Nxesi says that the LAP operates under clear governance structures and segregation of duties, determined by legislation.
“It is critical that these legal prescripts are observed and enforced, exactly to prevent fraudulent and corrupt schemes from accessing public funds.
“The real issue is whether the Thuja deal is legal and valid, and due processes were followed in terms of the law. This is an issue to be settled by the court.
“Mdwaba’s 10% bribe allegation will also be placed on record and subjected to the scrutiny of the court,” said Nxesi.
Hopefully, we will see the parties facing each other in court. So many facing allegations and formal charges – and asking for their day in court – have only used the legal process to delay the day of reckoning.
This story first appeared in Moneyweb and is republished with permission.
