Two ANC ministers facing fraud charges in US investigation
THESOUTHAFRICAN / 20 JANUARY 2019 - 09.05 / TOM HEAD
A project that was meant to cost the City of Johannesburg R600m ballooned to R1.7b.
The Justice Department of America is seeking answers from three of the ANC’s top brass – two of whom are in Cyril Ramaphosa’s cabinet – after they were accused of fraud following the failed attempt to roll-out a cheap broadband service across Johannesburg.
Public Service Minister Ms Ayanda Dlodlo [Photo: GCIS]
As Sunday Times report, the network was meant to go live in 2013. But six years later, it’s still not operational and there is no sign of developments picking up any time soon. The task has seemingly been abandoned.
What happened with the Johannesburg broadband project?
Public Service & Administration Minister Ayanda Dlodlo, Deputy Defence and Military Veterans Minister Kebby Maphatsoe, and former diplomat Lerema Kekana are all under investigation. They played a key role in securing funding for the project, which was initially budgeted for R600 000 million. However, those costs ballooned to R1.7 billion.
Nexus Forensic Services – who are leading the probe into the botched project – have accused the trio of gross mismanagement, as well as saying they were “deceptive” with the information they shared.
ANC top brass respond to allegations
All three are said to have been directors at CitiConnect Communications (CCC). The company was a BEE-affiliated outfit that folded once it became clear they couldn’t get up and running in Johannesburg. The publication also gave the accused their right of reply.
Ayanda Dlodlo: “I was careless and naive, but didn’t do anything illegal.”
Kebby Maphatsoe: “I wasn’t an executive there by 2010. I resigned in 2013 before they were wound-up”.
Lerema Kekana: Declined to provide comment.
Ministers probed over loan agreements
Johannesburg Mayor Herman Mashaba was asked to investigate the situation back in December. On Tuesday, he sat down with US officials who wanted to get to the bottom of these murky waters.
Dlodlo is under the most intense scrutiny: She’s been questioned after making R3 million from selling her shares in the company. The Minister had previously stated that she was told the project would help find work for ANC veterans who served in the armed MK wing. Again, this didn’t come to fruition.
Along with her fellow accused Kebby Maphatsoe, Dlodlo is also accused of signing off on loan agreements for R400m and R766m respectively with Ericsson SA and Ericsson Credit – despite the companies’ limited operation knowledge of broadband networks. Two years after these payments got the go-ahead, both had stepped down from the board.
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