Open letter to President Mbeki re Abuse of power, conflict of interest: Minister J Radebe by Bantu Holomisa as UDM President

UNITED DEMOCRATIC MOVEMENT

2002-07-18

Mr Thabo Mbeki
President of the Republic of South Africa

Dear Sir

ABUSE OF POWER, CONFLICT OF INTEREST: MINISTER J RADEBE

Your attention is drawn to the impropriety of the Minister Jeff Radebe, of Public Enterprises, making decisions about a dispute involving a company in which his wife is chairperson, is a matter of concern.

In February 1999, the government chose Minister Jeff Radebe's wife company called Nabera as a management company of Alexkor. Later the Alexkor Board demanded that Nabera should prove compliance with clause 7.1.3 of the management contract, which requires proof of access to the R120m required for exploration.

When it became clear that Nabera did not have access to the funds, their contract was cancelled on the basis that a condition precedent had not been met. However, the Minister gave Nabera two extensions to look for the funds.

However in August 1999, an article in the Business Day referred to a report submitted by Nabera to the Minister of Public Enterprises complaining about large-scale theft, poor financial management and the mismanagement of the subsidisation of non-core assets in Alexkor. The report described management salaries as outrageous.

On August 12 1999, Minister J Radebe on the basis of his wife's wild allegations against Alexkor Board members announced that the Director General of Minerals and Energy affairs, Mr Nogxina would lead an investigation into mismanagement in Alexkor and come forward with clear recommendations for his consideration.

Take note of the fact that Radebe could not escape criticism because his wife was the chairman of Nabera and purported recommendations by Nogxina would come out in time when the board had made an unfavourable ruling towards Nabera.

I am further informed that the Board was also accused by the Department of Public Enterprises that they embezzled an amount of R6m and that Nogxina inquiry would also investigate the said amount.

FINDINGS OF NOGXINA INQUIRY

The allegations that the salary of the chairperson was R60 000 and Mr Mokgokong was R50 000 were found to have no substance. The failure by Nabera to furnish the R120m for exploration funding did not amount to a breach of the management contract. What a celebrated palace verdict?

Nogxina's findings further noted that;

"It appear that the apple of discord between the Board and Nabera stems from whether the latter has complied with the terms of the tender. The issue being that Nabera had access to a facility amounting to R120 million for purposes of exploration is at the centre of the dispute."

The inquiry also recommended that as there are indications of financial mismanagement a forensic audit be conducted. Areas to be investigated according to Nogxina's findings were:

a) The missing R6m.
b) Unauthorised use of Alexkor's resources.
c) The receipt by the Chairperson of a company car for private use.
d) The company secretary's appointment and his qualifications.
e) The contract entered into between Alexkor and Royal Foods.

Without discussing the outcome of the investigation and contents of the report with the members of the Board of Alexkor, Minister Jeff Radebe announced in the media that he was restructuring the Alexkor Board and relieved four members of the Board, presumably for his wife's company to operate freely. He ordered a forensic audit as recommended by Nogxina inquiry.

Take note of the fact that no explanation was ever received from Nabera on the R6m and the forensic audit report was never made available to the Alexkor Board or to the public.

MINISTER RADEBE'S CONDUCT

As can been seen above Minister Radebe, has abused his position and a conflict of interest case can be proved.

You are therefore kindly requested to cause Minister Radebe to display the same zeal and energy he has displayed in this case for him to release the much talked about forensic audit report. There is no doubt that the reputation and the livelihood of the expelled Board members have been affected.

Failure to do so, your government should issue public statements clearing the said Board members. Indeed, your government should start a process of rehabilitation and re-absorption into their respective professions. The effect of the allegations against them is that they have been rendered into a complete outcast. Should the so-called forensic audit prove that there is no R6m missing, Minister Jeff Radebe should go. His public utterances, to the effect that an amount of R6m was missing under the chairmanship of Advocate Nono Goso of Alexkor, have been raised, during her interviews for the post of a Judge for Grahamstown.

The media has reported that the interviews centred on the disappearance of the R6m in Alexkor during her tenure of her chairmanship. In the meantime Minister Radebe and his wife are enjoying the proceeds of Alexkor through his wife's company Nabera. This looting spree of our resources will continue in your government if you are not prepared to take a drastic action against these ministers who are lining their pockets at the expense of our people.

Kindly advise.

Yours sincerely

HB Holomisa
MP President of the United Democratic Movement

Cc :
Alexkor Board
Minister Jeff Radebe
Media

With acknowledgement to the UDM.