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Bongani Mdakane | 4 December 2023

TW Civils provides services such as equipment hire and civil services for Sasol.

Sasol has extended a contract of a white-owned company that was found to have committed fronting and was not BEE compliant.

The chemical and energy giant appointed Nyapotse Incorporated to investigate TW Civils and Earthmoving to verify its BEE status.

After the probe was completed, the forensic report found that TW Civils had been getting jobs that cost millions of rands from the petroleum company without a valid BEE certificate while using an employee who is a self-taught mechanic as a front.

The BEE certificate that the company used expired in September last year. However, Sasol never questioned TW Civils in that regard.

According to insiders within the petroleum company, the matter was raised on why TW Civils continued to benefit from the contracts, while there was clear evidence that the company was not compliant.

“We asked pertinent questions on why TW Civils was still getting jobs within Sasol while it was clear it was not compliant. However, some of the senior officials kept on threatening us and told us that we ask too many questions. There were pushbacks, and we were told that TW Civils will continue to work as a contractor at Sasol,” said an insider.

In the forensic report we have seen, TW Civils’ case is like the one of NJM Heat Treatment & NDE Services (NJM), another company that we reported about last week, that it was involved in fronting allegations and BEE fraud, which Sasol had also turned a blind eye to.

“It is of paramount importance that we should highlight and state that the B-BBEE certificate provided to us by the company (TW Civils) has expired on 15 September 2022 and currently the entity does not have a valid B-BBEE certificate.

“As a preliminary issue, the company’s audited financial statements for the year ending March 2022, indicates that the total revenue has significantly increased, which necessitates a different measurement of the company from a qualifying small enterprise to a large enterprise,” reads the report.

Investigations also revealed that despite the authentication by the verification agency, it appeared that there were inconsistencies in the allocation of shares, considering, inter alia, the shareholders agreement and the share certificates.

The petroleum company requires contractors to comply with BEE for them to be contracted, where the chemical giant demands a valid level 7 B-BBEE certificate, however TW Civils continued to get projects while not compliant.

“In light of the supplier’s B-BBEE certificate having expired in September 2022 and a new and current certificate still not issued, the company has therefore not complied with the provisions of the agreement.

“We have obtained a written confirmation from Sasol that there is no record of an “in-process” letter having been provided to Sasol by the supplier. There is , therefore, at outset, non-compliance as far as the requirements are set out,” reads the report.

TW Civils, which has a turnover of R90-million-a-year, listed Bafana Shongwe as its 23% shareholder, while Dewald Te Water and Lindie Te Water own 45% shares through their other company called TW Stene, with Cleopatra Ndlovu owning 29% of shares through her company called Peculiar Care, with 3% shared held by Future Gift Education Trust on its part as a BEE partner.

According to the report, it is stated that Shongwe’s shares were diluted from 23 to 20 ordinary shares.

The report said there was no evidence suggesting Shongwe was compensated for the dilution and that there was no explanation provided by TW Civils in that regard, and also it appeared that Shongwe did not understand the basis of dissolution.

The report stated that TW Civils failed to provide the employment agreement of the executive directors, and that Shongwe told the investigators that he only knew that his 20% shares were in machinery, not the company as a whole.

The report revealed that TW Civils failed to submit essential documents to the investigators to assess any risk of fronting practices.

TW Civils financial manager Louis Sauer said the report of Nyapose Inc was scrapped as the investigators were inappropriate in handling the matter.

“We reported Nyapose for inappropriate conduct, and I don’t know where you got that report from. That report is not credible anymore as Sasol scrapped it.

“Nyapose refused to give us time to get everything they needed and at that time our CEO had just died.

“Sasol appointed another company to do the investigations and we are still waiting for findings in that regard.”

Sasol media relations manager Matebello Motloung said: “Sasol takes allegations of B-BBEE fronting by its suppliers very seriously and has demonstrated unwavering will and commitment, on both a pro-active and reactive basis, to dealing with such matters decisively.

“We are committed to maintaining the highest standards of ethical business conduct, and we hold our suppliers to the same principles.”

“Upon receiving information that the supplier in question may be involved in B-BBEE fronting, Sasol appointed an independent law firm to conduct an investigation into the matter. The law firm completed the investigation and submitted its findings.”

Motloung said that in addition to address the issue swiftly and decisively, it is crucial for Sasol to also act responsibly throughout investigative process.

“The supplier was afforded a right-of-reply. To ensure fairness, and proper due diligence in our pursuit of the truth, we then appointed a second independent law firm to investigate the matter further.

“The report that you are referring to, cannot be considered as the absolute final outcome of this investigation as the matter is under investigation still, by this second independent law firm. Should this investigation confirm any wrongdoing by the supplier in question, we will not hesitate in taking immediate and appropriate action to rectify the situation,” she said.

‘Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER’.


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