And, as amaBhungane has discovered from SAPS financial and supply chain management documents, police not only violated National Treasury regulations when they contracted the business, but on at least one occasion paid five times more than the average retail price for the diesel. 

Officers seemingly used loadshedding as an excuse for the procurement. 

Discovery of the paradoxical situation of police contracting Stanfield’s associated company while investigating him comes as prosecutors make final preparations for the infamous couple’s upcoming trial. 

Stanfield and Johnson, together with 12 of their suspected associates from their alleged criminal organisation, which is known as The Firm, go on trial in the Western Cape High Court on 19 October. They are charged under the Prevention of Organised Crime Act for, among other alleged crimes, attempted murder, murder, fraud and money laundering. 

AmaBhungane has previously reported how Stanfield was able to trade on his reputation as an enforcer to develop relationships and bag contracts with big private property and investment sector players to commercially develop an area around Cape Town International Airport and how he maneuvered his way onto a beleaguered presidential project for the reconstruction of the Passenger Rail Agency of South Africa’s vandalised Central Line in Cape Town. 

Now, AmaBhungane can reveal, based on police supply chain management documents and other evidence, how Cape Town based police did business with a company that is, according to a credible source, a key component in the operations of the Stanfield-Johnson shadow business enterprise. 

Shadow enterprise 

As well as construction and facilitation management companies, the Stanfield-Johnson enterprise consists of several fuel businesses, including a service station and a diesel distribution company. 

Evidence suggests that it was through her NJ Diesel Distributors, that Johnson imported diesel from Mozambique into South Africa where she apparently sold it on Gauteng’s East Rand and in Cape Town. 

What can be revealed now is that between October 2022 and March 2023 Cape Town’s Lentegeur and Nyanga police stations and the Bishop Lavis police training academy were regularly buying diesel from the couple’s John Ramsay Service Station. 

In total, police bought nearly 3,000 litres of Stanfield-linked diesel for their generators, all surprisingly without triggering any internal supply chain management alarms. 

The service station is located in Cape Town’s suburb of Bishop Lavis, a known 28s street gang stronghold. 

The two police stations are managed by the Western Cape provincial police office, while the academy is administered by the SAPS national training office. 

Current and former police supply chain management sources claim that concluding contracts with a business with known links to the Stanfield-Johnson enterprise should immediately have raised “major red flags”. 

“All the purchase signoffs would have to have come from senior management both at station and provincial level. These officers would receive regular intelligence briefings on all manner of crimes in the city. They would be in the know about investigations into people like Stanfield. Importantly they would know that these investigations would be looking into businesses linked to organised crime gangs,” said a current SAPS supply chain manager. 

The officer, who is based in Cape Town, said: “There is also no way that you are a commander of a police station in these areas and you don’t know that Stanfield and his family controls that petrol station.” 

A community policing forum source, who operates within the Lentegeur policing precinct and who asked not to be identified because of security concerns, said “no one can say you don’t know who owns that garage. 

“Everyone on the [Cape] Flats knows who the owners are. It is no secret that Ralph and Nicole run it. You don’t have to be a special [police] investigator to know.” 

Attempts to get comment via the couple’s lawyer were unsuccessful. 

AmaBhungane’s dissection of the service station’s business structure using Companies and Intellectual Property Commission (CIPC) documents, publicly available court records from one of Stanfield’s bail applications and Google searches reveals extensive connections between the business, Stanfield and his family that go back at least 29 years. 

Family connections 

CIPC records show the John Ramsay Service Station has been associated both directly and indirectly with Stanfield and his family since 1997, when his aunt, Sharifa Stanfield, was first appointed as a member of the close corporation (as it was then). Sharifa is the former wife of Stanfield’s late uncle, organised crime boss and convicted tax evader, Colin Stanfield. 

Records show Ralph Stanfield himself became a member on 28 June 2004 resigning eight years later on 6 November 2012 when two of his associated trusts, the Stanfield Family Trust and the Ralcole Family Trust, along with Johnson, were appointed members. He was reappointed as a representative trustee on the CC the same day that the trusts and Johnson were appointed. 

While CIPC records show Stanfield and the Stanfield Family Trust officially resigned from the company on 27 June 2014, circumstantial information suggests that, until his and Johnson’s arrest on 29 September 2023, Stanfield remained fully involved in the service station’s financial operations. 

CIPC records show that in October 2024, a month after police conducted a raid on the service station, Johnson seemingly tried to create distance between herself and the business by resigning. Her mother, Barbara Johnson, was then appointed its sole director. 

How – and importantly why – police missed these family connections, and whether procurement red flags were deliberately or conveniently ignored, remains unknown. 

Police management this month launched an enquiry into the contracting after amaBhungane began asking questions, but blamed Eskom’s “loadshedding” and said officers were trying “to ensure the continuity of essential operations”. 

Turning a blind eye 

National Treasury procurement rules require companies wanting to do business with government to be registered on its Central Supplier Database (CSD), which is exactly what Johnson did in 2021. 

A CSD registration report shows that on 13 June 2021, she registered the service station as a government supplier. 

How this happened though is questionable, given that Johnson was under sequestration at the time. Both Johnson and Stanfield were sequestrated in January 2019, with the Western Cape High Court only issuing their rehabilitation certificates in April 2023, a month after their last diesel delivery to police. 

The Insolvency Act prohibits an unrehabilitated sequestrated person from managing a company or being involved in the management of a Close Corporation, which the service station was until December 2023 when Johnson reregistered it with CIPC as a propriety limited business. 

The effect of the legislation is that, because Johnson (who at the time was the service station’s sole member when the police contracted it) was sequestrated the business would have had no legal management to authorise the signing of such contracts. 

The contracting of Johnson while she was sequestrated appears not to be the only procurement rules breached by the SAPS. 

SARS records show that at the time neither Johnson nor the service station were apparently tax compliant. 

AmaBhungane has learnt from a SARS source that in June 2026 the Receiver issued a final letter of demand against Johnson and the service station over unpaid tax debts. 

The letter related to findings from an audit – concluded on 19 September 2024 – on the service station for the 2019 to 2023 tax years. It was during this time that the police contracted the service station. 

The audit revealed that the service station reportedly owed R54.4-million in company income tax and R148,156.72 in PAYE. An audit on Johnson, which was concluded on 29 November 2024, assessed her tax debt to be R31.6-million for the 2019 to 2023 tax years. 

AmaBhungane understands the service station objected to the assessment and applied for a condonation. Both the objection and condonation request were rejected, with SARS issuing a final letter of demand in June 2026. It is unknown whether the service station and Johnson have since settled their tax debts. 

SARS declined to discuss the taxpayers’ affairs. 

The diesel orders 

The first order to be placed was by Nyanga police station, which sourced diesel on five different occasions from the service station between 28 September 2022 and 28 October 2022. 

During that month historical loadshedding data shows that loadshedding was varying between stages 2 and 4. 

A police order form, stamped by the station’s commander, and financial records, all of which carry the service station’s SAPS supplier number, show that in total Johnson’s business was paid R38,131.64 for the supplies. 

It is not known how the service station, which is 10km away from the police station was selected or why one of five other closer filling stations, including one right next door, were not used. 

When it came to the academy, police financial records show that between 6 November 2022 and 31 March 2023, the service station made 12 deliveries of diesel for which the SAPS paid R130,587.10. 

An order form from the academy shows that in its first order, which was on 6 November 2022, the commander signed off on a payment to the service station for R122,364.00, for the delivery of 990 litres of diesel. For that delivery the SAPS paid about R123 per litre. Fuel Industry Association of South Africa historical data shows that the coastal price for diesel at the time was R24.83 per litre. 

While it is not known why the academy paid R123 per litre or why so many orders were placed, loadshedding was hovering between stage 2 and stage 6. 

Supply chain management documents show that an officer from Lentegeur police station, which is situated 17km from the service station with 13 other filling stations closer to it, wrote to the service station on behalf of the station commissioner and requested that it bid on a tender for the supply of 900 litres of diesel. 

The letter, which was written on 22 December 2022, shows that the closing date of the bid was a week later, on 29 December 2022. Johnson submitted the service station’s bid of R22,176.00 the following day, on 23 December 2022. 

But wait, there’s more 

Evidence unearthed by amaBhungane shows the service station was not the only Stanfield-Johnson enterprise company registered as a police fuel supplier. 

Our investigation has revealed that another company registered to supply diesel was one of the couple’s other companies, Yibaninati. 

Information on the SAPS system shows it is also registered as a fuel supplier, with Johnson listed as the contact person with her email address and cellphone number. 

While amaBhungane has been unable to ascertain as to whether the police ever bought fuel from the business, our investigations into the operations of the Stanfield-Johnson empire, have revealed how Yibaninati, was at the time a key tool in their alleged capture of Prasa’s multi-billion rand reconstruction of the vandalised Central Line in Cape Town. 

Red flags 

Our former national SAPS supply chain management source said there were strict regulations around appointing suppliers. 

“When vetting suppliers there is a process where supply chain practitioners conduct due diligence…” 

The source said information from a variety of sources was meant to be looked at, including publicly available information, and added that if it was found that someone had been arrested or was being investigated, especially for serious and violent crime, although not convicted, the supplier would be flagged. 

“If a director of a company is sequestrated the company should not get a tender. It’s a problem, because how will the supplier render services if they don’t have money or are financially unfit? It is a red flag.” 

In determining prices to be paid for diesel, the source said there were guidelines from National Treasury, with police having dedicated staff who conducted market analysis on goods. 

“This is done at a national and provincial level by officers working in demand management sections whose job is to determine prices that are paid for suppliers. You cannot just pay whatever you like.” 

When it comes to the selection of suppliers National Treasury’s rules are unequivocally clear. 

What the law says 

In an emailed response, National Treasury said that while suppliers may register on the CSD irrespective of their tax compliance status, supply chain management instructions required a supplier to be tax compliant at the time that a contract was awarded. 

It said the CSD automatically verified a supplier’s tax compliance status in real time directly with SARS and made this information available to organs of state. 

“Organs of state may not award contracts to suppliers that are not tax compliant.” 

It added that where suppliers were non-tax compliant, “the information is reflected on the supplier’s CSD profile and registration report and is visible to organs of state during supplier selection and evaluation processes. 

Treasury added that “responsibility for ensuring compliance at the award stage remains with the procuring institution”. 

Inquiry 

Western Cape police spokesperson Brigadier Novela Potelwa confirmed the “transactions” which she said were “preceded by a fair procurement process that considered other service providers listed on the CSD. 

“The process culminated in the preferred service provider rendering a service over time to two police stations namely Lentegeur and Nyanga. Records further indicate the last transaction between Western Cape SAPS and the service provider was in January 2023.” 

She said that on notification of concerns about the service provider in relation to its ownership, no further business transactions were conducted with it by the SAPS in the Western Cape. 

Poletwa said not say what the concerns were or who raised them. 

When amaBhungane questioned whether, given Johnson’s known notoriety, risk assessments had either not been done or ignored, Poletwa said: “Given the complexity of the questions raised and the allegations referred to in your correspondence, an inquiry has been initiated to establish the facts and determine the appropriate course of action, including whether the matter warrants a criminal investigation.” 

National police spokesperson Colonel Athlenda Mathe, speaking on behalf of the academy which is administered by the SAPS national training department, said the “prescribed procurement process” was followed when it became necessary to procure fuel during periods of load shedding “to ensure the continuity of essential operations and keep the facility operational”. 

“Importantly, at the time the procurement was undertaken, the academy had no knowledge or information indicating that the owners of the supplier were allegedly involved in any criminal activities. The procurement decision was therefore based on the prescribed process, the quotations received and the information available to the academy at that time.”

The post Cops traded with ‘gangster’ company appeared first on AmaBhungane Centre for Investigative Journalism.

The primary charge is that this clique pulled off a number of sequential takeovers without declaring that they were related or cooperating parties. This omission allowed them to avoid a costly legal obligation at that point to offer to buy out other shareholders. This obligation, set out in the Companies Act, is triggered whenever you and your “concert parties” cross the threshold of owning 35% of a company. This is considered the point at which you effectively take charge.

Peresec and its concert parties have always argued that their breaches of the law were “inadvertent” – and that they were found to have acted in concert merely “because of the deeming provisions” of the legislation, “even in the absence of actual cooperation between the investigated parties”.

The attorneys representing Peresec and others set out their position here.

It is no mere technicality when powerful investors seize control of a company with other owners being none the wiser, especially if the company’s resources are then seemingly used to prop up the new controllers’ other interests. All this while the share buyout costs evaded potentially reach into the hundreds of millions.

The existing shareholders are left with no opportunity to get bought out from an investment that has suddenly potentially completely changed the direction of the company to serve the new controllers’ objectives.

And perhaps most crucially, the rules say that people taking control of a company must have the resources at hand to buy out everyone else – even if not everyone ultimately accepts the offer.

This means that evading the obligation to offer to buy out everyone would come with evading a parallel obligation to already often have hundreds of millions of rands at hand and not be, for instance, betting on getting your hands on the target’s own resources without actually being able to pay for them.

This, at first sight, seems to be exactly what the Peresec ‘clique’ got away with, based on the record of an investigation by the seemingly timid Takeover Regulation Panel (TRP), which in 2023 reached a belated and contentious settlement with the alleged perpetrators.

This matters because takeovers are inherently vulnerable to insider trading, director capture and asset stripping – which is why market rules and the TRP exist.

If these mechanisms are not doing their job, or are being brushed aside by powerful players, then this raises the risk of more systemic market abuse.

At least one jilted investor, David Brouze, has launched a parallel campaign against Peresec involving a slew of other allegations of everything from insider trading to the cooking of books – all of which have been denied and, in several cases, successfully resisted in a variety of court skirmishes so far.

Peresec boss Warren Chapman has in turn levelled damaging counter allegations against Brouze.  

But that legal feud and war of words are something of a distraction and will not be the focus of this article. 

The fact is that any dominant player on the JSE like Peresec – which by its nature is also often privy to market-moving information and leverage – creates the risk of market power being abused.  

This two-part series analyses contested allegations that there was abuse (inadvertent or otherwise) during a complex set of transactions – and asks whether the rules and institutions designed to deter such activity were sufficiently robust.

The question arises because there are significant indications of strongarm tactics by Chapman’s faction, including threats of consequences if target company bosses didn’t bend to the so-called raiders’ will.

The contrary version is that these actions formed part of the cut-and-thrust of business and did not amount to anything unlawful. 

At the heart of the alleged scheme are Chapman and a group of prominent executives and investors, all of whom are in some way or the other related to Peresec.

The evidence underpinning all these allegations is contained in the extensive record of a TRP investigation into the takeover of a string of companies – Zarclear, African Phoenix Investments, Extract Group and ENX Group.

The TRP investigation was launched in 2022 and concluded, Butter says prematurely, with a no-fault settlement in 2023.

Craig Butters’ TRP complaint

The TRP is a government agency that, as the name suggests, approves takeovers of mainly listed companies.

These approvals are mostly uncontentious but occasionally become the subject of heated appeals and court cases. A complaint to the TRP was, for instance, key to uncovering the secret hand of Zimbabwean tobacco mogul and alleged money launderer Simon Rudland in a bid to control Tongaat Hulett.

While the complaints around Peresec – and a subsequent settlement – were announced back in 2022 and 2023 respectively, details of the underlying investigation and events have remained largely unknown.

This has changed with an application launched by well-known analyst and investor Craig Butters in the Western Cape High Court which on the face of it seems to reveal the extent of a scheme that unfolded and the authorities’ alleged failure to properly investigate and meaningfully punish any improprieties.

This case recently suffered a temporary setback after the Court ruled that Butters had not joined all the relevant parties. This may yet lead to new submissions to counter Butters’ allegations.

Butters is demanding that the TRP scrap the settlement reached with the Chapman group and then redo its investigation properly.

The fundamental complaint is that masses of evidence of wrongdoing was ignored while the settlement is not only hopelessly lenient, but also, he argues, unlawful in that the TRP isn’t even legally empowered to strike this kind of deal.

The TRP and Chapman (on behalf of various implicated parties) are disputing this.

Butters’s case however relies extensively on material gathered by the TRP investigation which had not previously seen the light of day.

Much of it is revelatory although Chapman has countered that Butters and other jilted investors (especially Brouze) have been waging a self-interested and dishonest campaign against him and his companies for their own benefit – accusing them of defamation, vexatious litigation and ultimately “extortion”.

Chapman’s counter-allegations appear to bounce off Butters, at least, who is publicly known for being one of the earliest to raise the alarm about the rot at Steinhof.

Butters dismisses what he calls “Mr Chapman’s ad hominem attacks on me” which he says all are made without any evidence.

More important than all of that, Butters’s litigation has brought into the open the TRP’s information about the content and conduct of its investigation.

Those disclosures, on which the Court must still rule, do raise serious questions about the basis on which the TRP could reach a settlement deal with the Chapman group “without admission of any contravention” – as well as the competence and commitment of the investigation and the appropriateness of the sanction.

And this in turn raises troubling questions about the conduct of some of the most powerful people in South Africa’s financial market – and the authorities’ will to keep them in check.

First stop – who is Peresec?

The saga set out in Butters’s case against the TRP starts in 2018 but before we get into the weeds it might help to understand where the alleged perpetrator, Peresec Prime Brokers, came from.

It was once part of Peregrine Holdings, a long-lived financial services group. In 2018 the management of its brokerage division organised a buyout, led by Chapman and two colleagues, which was concluded in February 2019.

The essential facts are that this division was already 35%-owned by a management consortium called Zolospan in which Chapman was the biggest shareholder. The remaining 65% was being bought out by a BEE consortium called Nkholi Consolidated Investments.

As we will see shortly, Chapman was, to a large extent, the mind behind this new powerhouse stockbroker. The leader of the Nkholi BEE consortium and later chairman of Peresec, Tshepo Maseko, was also a Peregrine executive.

The buyout created Peregrine Securities which merged with a subsidiary called Legae Securities. This would become Legae Peresec and eventually just Peresec South Africa which, through a subsidiary Peresec Prime Brokers, is the JSE’s leading broker.

For the sake of simplicity we will just say “Peresec” when we mean Peresec and its subsidiary Peresec Prime Brokers and their predecessor companies.

Black-owned

Among Peresec’s selling points to clients is that it is 51% black-owned. This claim is also being challenged by Butters, an attack seemingly borne out to some extent by new documents, although Chapman has attacked this “vexatious” claim as being part of what he calls, in court papers, a “shotgun” assault which he states consists of an array of legally irrelevant accusations he claims serve no purpose but to portray him as a thoroughly bad actor.

The crux of the matter is that the Nkholi consortium’s single largest shareholder, a company called Waldotime, was set up as a black-women-owned entity on the eve of the Peresec buyout with the majority shareholders being two domestic employees of the Chapmans. (Chapman did not contest this characterisation.)

While this does materially benefit two black women as advertised, it also demonstrates that the majority-black-owned Peresec remains linked to the Chapman show, and may even be somewhat beholden to him.

In fact, the black consortium was effectively summoned up with funding from Chapman. And while Chapman may well have been doing that for admirable reasons, it is – again – very much proximate to him.

Chapman has been at pains to demonstrate to us how the setup is completely legitimate.

He provided amaBhungane with a BBBEE certificate from Cardinal Ratings as proof of Peresec’s compliance and, to be fair, the rating agency has raised no qualms.

Maseko, the head of Nkholi, likewise defended the composition of the consortium he had assembled.

The two women involved have not “been held out to be, directors or management of the company. What I can confirm, from my own direct involvement, is that they are genuine shareholders who hold real shares and receive real dividends in their personal capacity”, he said.

But back to the meat of the allegations against Chapman and Peresec.

Raiding party

The main thrust of the Butters case and the TRP investigation is that Chapman and his associates orchestrated a cascade of corporate takeovers – something akin to knocking over dominoes where one grab paves the way for the next.

It is common cause that some key moves were made without complying with the mandatory offer provisions of the Companies Act.

The rest of the alleged Chapman “team” include significant corporate figures.

One is Paul Baloyi, a respected banker with years of experience as a director of several major listed companies (including Peresec). Baloyi was also a shareholder and director of the BEE consortium mentioned above – Nkholi.

However, his pre-existing directorships and shareholding in at least one of the “target” companies troubled a number of the directors he shared that boardroom with, because of their concern over a potential conflict of interest.

Another is Sean Katz, a co-founder of Peregrine (from where Peresec originated) who, it is alleged, acquired shares in companies and positioned himself to coordinate with Chapman.

Also involved in the alleged scheme was Andrew Hannington, the former CEO of audit firm Grant Thornton in Johannesburg (and also previously a director of a Peresec subsidiary) who, as we will see, allegedly aided Chapman in the underhanded takeover of a company where he had been the chair of the board.

Also allegedly involved were Kobus Esterhuysen and Nick Sennet – more Peregrine veterans and business partners to Chapman who directed a Peresec fund, Sui Generis, used in the impugned takeovers.

In an affidavit, Butters dealt in turn with how this alleged group, along with others, seized control of the four companies (Zarclear, African Phoenix Investments, Extract Group and ENX Group) in a complex set of inter-related manoeuvres.

The implicated parties we could reach all deny wrongdoing and also steer the matter back to Brouze’s messy fight with Chapman rather than the distinct Butters case which mostly concerns us here.

That story goes like this.

The “capture” of Sandown Capital/Zarclear

The first stop in the saga is a company once known as Sandown Capital which was later renamed Zarclear.

For this we have to rewind a bit to when Peresec (as it is now) was still part of Peregrine but already part-owned and run by Chapman’s Zolospan.

Like Peresec, Sandown was also once part of Peregine Holdings. It was spun off in late 2017 and separately listed on the JSE with investment assets of R1,1-billion held under the guidance of its CEO Sean Melnick who had an investment management contract with the company.

Then, mere months after the listing, Chapman made his move.

First, in March 2018, Chapman sent a perhaps ominous email to Melnick letting him know he had acquired 10% of the company and intended to buy more shares.

According to his email, Chapman was “interested in board seats in Sandown”.

In a submission made to the TRP and revealed in the Butters case, Melnick claims that Chapman “indicated that he was undecided as to whether he was going to leave those shares in [Peresec’s] name, put those shares in his own name or that of his family vehicle or “use” an empowerment vehicle to house the shares.”

That “empowerment vehicle” was Nkholi, which had then just been created.

The upshot was that the formal lines between Chapman, Peresec and Nkholi were, according to Melnick, “illusory and, in fact, non-existent.”

What Melnick was saying, in the jargon of corporate takeovers, was that they were “concert parties,” with Chapman at the very least being able to speak on behalf his colleagues at Nkholi.

Chapman told Melnick that Nkholi had by now (in April 2018) acquired 23% of Sandown/Zarclear. In a later affidavit Chapman added that he had himself underwritten the R174-million this had cost and advised Nkholi in the subsequent events. By June, in further correspondence with Melnick, he said that “my BEE consortium and I” own more or less 30% of Sandown/Zarclear and were making demands “as future owners” – language Chapman now suggests was merely colloquial shorthand and did not imply that he directed Nkholi.

More emails reflect what looks like ruthless corporate strongarming.

In an email Chapman set out his objectives:

“Securing 400m in preference share capital for Peregrine Securities (Peresec) from Sandown Capital to boost its regulatory capital for a minimum of 5 years … Ensuring that any new investments made by Sandown are done so with Nkholi’s approval.”

This meant significant control over Sandown and, on the face of it, tapping it for the benefit of his own company Peresec and “his” empowerment consortium. This also implied that Melnick’s investment management contract would have to go. A new investment strategy was on the cards – one that seemingly involved a lot of money heading Peresec and its partner’s way.

And the kicker: “we need your whole board to resign … and we need the management contract renegotiated by next week”.

That’s Melnick’s contract to manage his company’s investments. Chapman was in effect booting out Melnick and his board only months after Sandown was listed on the JSE.

And then the flex:

“If we have not made progress on this by Monday evening my BEE consortium and I will motivate, as new future owners, that Peregrine Equities [again, Peresec] will give you formal notice to close your accounts and your funding facilities within 30 days”.

“If we do make progress, the BEE consortium and I will motivate that we renegotiate a whole new lending package that has optimal outcomes for you …”

In other words, Chapman and Co, who were making moves to take full control of Peresec, would seemingly use their leverage with Peresec to sabotage Sandown if they did not get their way.

Chapman signed off this email: “As always, my intentions are honourable and without malice. I have only the best wishes for you, even when we disagree.”

Chapman’s version, in response to our questions, is that the emails simply reflect the rough and tumble of the business he and Melnick are in.

“[The emails] are the record of a hard commercial negotiation between two experienced counterparties, each with leverage, each using it.”

Chapman told us that the “proposals” for Sandown’s future were essentially just him spit balling and that not all of them were eventually implemented. Perhaps most importantly, “a broker is entitled to terminate a client’s facilities on notice, and telling a counterparty in a negotiation that the commercial relationship will be reviewed if terms cannot be agreed … is the ordinary language of commerce, not extortion”.

In his affidavit in the Butters case, Chapman dismissed these emails to Melnick as merely “broad and imprecise confidential discussions about my thinking at the time. And I deny that they show any evidence of concert party arrangements as set out in the Act and the Takeover Regulations”.

Things moved apace and in late July Nkholi demanded a special shareholder meeting at Sandown/Zarclear. The meeting was meant to vote on changing the Sandown board and getting rid of Melnick’s investment management contract.

The Sandown board however decided to re-negotiate the contract and Chapman’s group backed off briefly.

But in the background the supposed coalition was seemingly marshalling votes. During August, Chapman’s family investment company, Hampden, Peresec and Nkholi increased their collective shareholding to 37%.

As Melnick points out in a submission he made to the TRP, this crossed the 35% threshold at which these “concert parties” should have made a mandatory offer to buy out all other shareholders.

But they did not and Chapman instead seems to have been preparing a coup de grâce.

On 20 August, Melnick’s board at Sandown received seven identical letters from shareholders which, he pointed out, even contained the same spelling mistakes. They demanded that Melnick’s contract be scrapped and that the Sandown board be changed with Chapman appointed as CEO and Baloyi (as we said, a shareholder in the Nkholi consortium) as chair.

Among the shareholders sending these letters were the three alleged “concert parties” controlled to varying extents by Chapman himself, making up 37% of shareholders. The other four were from Sean Katz, the founder of Peregrine, a company called Brozin Investments, the Peresec fund Sui Generis run by Chapman’s business partner Kobus Esterhuysen and Nick Sennett, and Kevin Ellerine (of the furniture empire). These smaller shareholders controlled between 6% and 7% judging by public records.

Katz, who has long been based abroad, told us that he is aware of “court matters” but added that these “are none of my business, frankly”.

Sennett of the Sui Generis fund rejected any suggestion there was collusion with Chapman or any other party to circumvent the mandatory-offer provisions.

At face value the identical letters gave an impression that shareholders with something in the region of 45% of Sandown’s shares were cooperating, meaning that a mandatory offer may have been due.

Chapman told us that the fact that all these separate entities sent identical letters didn’t prove anything. According to him the letters just reflected that “shareholders are entitled to requisition the removal of a board in which they have lost confidence, and identical wording reflects nothing more sinister than a shared attorney and a shared view. Whether coordinated shareholder action of that kind falls within the concert-party definition is a technical question.”

Whatever the case, faced with this pressure Melnick and his board capitulated. His contract was bought out and Chapman seized control of Sandown and its R1,1-billion balance sheet. Sandown was soon renamed Zarclear.

And here is the important part: had the Chapman group made the offer to minorities they were seemingly statutorily obliged to, it could have cost them in the region of R500-million – half of the financial muscle they had just acquired “on the cheap”.

Remember that the rules would have obliged the Peresec group to have the R500-million at hand just in case all the minority shareholders actually accepted the offer, a marshalling of significant resources and commitment.

As it turned out, none of that potential R500-milllion expense was risked while the group instead gained relatively cheap control of Sandown/Zarclear’s R1,1-billion in assets to essentially do with as they pleased.

Chapman has rubbished the claims of a conspiracy of shareholders. In an affidavit provided to the TRP he said, “I deny that the impugned parties ‘took over’ companies by buying shares and then making demands.

“The demands were only to make changes to the boards of companies … to appoint directors who were competent and qualified in the roles at the Targeted Companies and to remove directors or make other demands with only the intention of changing the direction of the Targeted Companies for the betterment of all shareholders.”

To some this might strain the meaning of not taking control.

This claim more pointedly seems to be contradicted by Chapman’s own emails quoted above where significant control over resources to be used for very explicit ends was presented as very much the point.

According to Melnick, Chapman’s actions at Sandown/Zarclear were a “roadmap or blueprint” for other takeovers that were to follow while also providing him with the necessary ammunition in the form of Zarclear’s balance sheet.

And what was done with this new war chest?

One thing was a major R250-million investment to take over another company (which we will get to next). Another was a R429-million capital reduction (basically a dividend) in December 2020 when the largest bloc of Zarclear’s shareholders essentially consisted of companies tied to Chapman even though he points out everybody else got their share in proportion to their shareholding. Still, the already bargain acquisition of Zarclear had now essentially paid for itself.

With Zarclear in the bag, the Chapman group, in Butters’s account, set about knocking over the rest of the dominoes.

Part two: African Phoenix

When the failed micro-lender African Bank was restructured and resurrected in 2017 it was, aspirationally, renamed African Phoenix Investments.

In August 2019 Zarclear (formerly Sandown), now under the control of Chapman and Co, bought 22% of the company for roughly R250-million.

If we believe the plot set out by Butters and Brouze (we’ll get to that soon), this amounts to the use of money from the company that had earlier been taken over on the cheap to facilitate the next step of a larger scheme.

After the Zarclear investment in African Phoenix Chapman was immediately appointed to its board.

Once again, a takeover was launched with Baloyi (now installed as the chairman of Zarclear) soon demanding a special meeting of shareholders, this time of African Phoenix.

In a letter to the African Phoenix board, more or less the same demands were made as at Zarclear – new board appointments and firing the investment manager (or technically buying out the general partner managing half the company’s assets sitting in the API Capital Fund Partnership) – so that African Phoenix’s financial muscle – a balance sheet of R1,4-billion – could be redirected.

As may be expected, a large number of new shareholders appeared on the company’s register right before this demanded meeting in November 2019. These included some of the parties that had previously sent the same letter to Melnick.

In addition to Zarclear’s 22%, Peresec itself held 8,4% while the aforementioned Peresec fund Sui Genesis Fund bought 3% and Sean Katz bought 2,1% through a company called Sunwood.

That’s slightly more than 35% but no offer to minorities was made.

Chapman’s essential line of defence has been that just because investors are related doesn’t mean they are working in concert. Butters and the TRP, as we will see in part 2, had taken a different view.

In any case, here an important part of the mandatory offer rule again comes into play. When investors cross the 35% threshold obliging them to make a mandatory offer, this offer has to be equal to the highest price the investor or their concert parties had paid for shares in the six preceding months.

In this instance this meant 80 cents per African Phoenix share or something in the region of R660-million if all shareholders took it up – an expense that was allegedly in part or whole effectively dodged in a deal aimed at gaining control African Phoenix’s R1,4-billion investment muscle.

And things quickly changed after the takeover of African Phoenix which over time essentially became one-part Peresec asset and one-part vehicle for further takeovers.

First, it bought R100-million in preference shares from Nkholi which is essentially a loan on generous terms (Chapman calls it “an investment by Phoenix on commercial terms that earns Phoenix a return – an empowerment-funding asset of exactly the kind institutional balance sheets hold across this market”).

Then African Phoenix liquidated its investments in the API fund in order to pay out R600-million to its shareholders – now to a large extent members of Chapman’s alleged grouping (and again, everyone else also got their share even though this now left behind a much reduced company that had arguably funded its own takeover).

Over time the company also spent over R200-million on “equity linked notes” from Peresec – indirect investments managed by Chapman’s brokerage.

And then African Phoenix also spent over R215-million buying shares in the Chapman-controlled Zarclear, setting the scene for a proposed merger of the two companies.

Other shareholders nixed this plan but soon afterwards Peresec made offers to buy out all the shareholders of Zarclear at R4,40 per share. As a listed company an independent expert was roped in to evaluate the offer and found “R4.40 would be below the bottom end of its fair value range”.

Nevertheless, many minority shareholders took the offer and got out.

The ultimate end result of the Chapman-Peresec group’s seemingly “on the cheap” takeovers of African Phoenix and Zarclear was that they owned between 91% and 95% of both companies which were both delisted from the JSE after paying out hundreds of millions of rands. Chapman himself became by far the largest shareholder of both companies.

Responding to questions, Chapman said that “reasonable people can debate any investment decision; what the record does not show is concealment, and what the outcome does not show is prejudice”.

But the real drama, that the TRP would also investigate, was happening elsewhere.

The wind-up

In late 2019 when the takeover of African Phoenix was taking place, another alleged scheme took off. Here is where the facts get particularly contested and an ugly battle has now raged for several years.

David Brouze has been pilloried by Chapman and Peresec for his multi-pronged litigation against them claiming he was duped and bullied into giving them his shares in a company called Extract Group which in turn housed large numbers of shares in another company called ENX Group.

In a nutshell, Brouze – as of late 2019 – had a R420-million debt facility from Peresec which was secured by a number of his investments which were valued at over R850-million.

The bulk of the security consisted of units in an investment fund in Bermuda. The rest was largely in the form of shares in ENX Group.

The rules of the debt facility were that the value of the security must always be more than the debt. Since the security was ultimately directly and indirectly made up of publicly traded shares, massive share price collapses could put him in default.

Brouze claims that Chapman and Co wilfully undermined the value of his security to force a default and seize his assets.

He alleged that it worked like this:

First, in March 2020 and in the middle of a market panic caused by the first Covid-19 lockdown, Peresec told Brouze that his local collateral was insufficient. It had already pressured him to refinance the facility and Brouze was trying to get RMB to take over his debt to Peresec.

Then, in April 2020, Chapman contacted Brouze and claimed that Peresec had met with the administrators of the fund in Bermuda and received the startling news that it was horribly overvalued.

This, according to Brouze, is ridiculous given that the fund was regularly audited and that Peresec had happily accepted it as collateral in the past. It’s as though a bank agreed to “lending a buyer R461 000 000 to buy a home, without bothering to find out whether the property actually exists, where it is located and what it is worth”, he said in an affidavit.

In reality, says Brouze, “Peresec facilitated the structure through which the investments were placed into CYF [the Bermuda fund]. It knew that the underlying exposure related to enX. It accepted the instrument as collateral and had access to the relevant account and security information”.

“I reject the suggestion that I deliberately misrepresented the CYF value to deceive Peresec.”

In any case Brouze was put on terms to get the new funding from RMB secured. He however claims that Chapman then actively ensured that this did not happen by refusing to share information requested by RMB staff.

He relies on an email exchange, attached to court papers, where Brouze forwards enquiries from RMB to Chapman, who simply replies that “we do not disclose our funding arrangements to investment and trading banks who are also our competitors”.

This is arguably a strangely unaccommodating stance given that everyone involved supposedly wanted the RMB deal to happen.

Chapman however denies undermining Brouze’s efforts and says that there was simply no appetite in the market for what Brouze had to offer, being ENX shares.

Going for the kill

With RMB funding not materialising Brouze was, on his version, given two options: cede all the collateral to Peresec or sign a new deal.

Here is where Andrew Hannington, one of the alleged “concert parties” in Chapman’s takeovers, comes in. He was the chair of Extract Group, a company almost entirely owned by Brouze but who, according to Brouze, was “in cahoots” with Chapman.

Brouze says he got a call from Hannington who told him to sign or else Chapman “would sink [you]”.

Hannington did not respond to our calls and messages.

Brouze went with the new deal which saw him consolidate all the assets being held as security (mostly ENX shares) into one place – MCC Contracts. This was a subsidiary of Extract, of which Brouze owned 80% of the shares.

Now Peresec’s collateral would consist exclusively of Extract shares – the vast majority of them.

Under the new deal Brouze would get 30 days to make a plan if the value of these shares went below the value of the debt he owed – or give his shares to Peresec.

A big swing in the ENX share price could make or break Brouze.

The ink was barely dry when a big swing in ENX shares, the asset underpinning the collateral, did materialise. They took a nosedive and left Brouze with those 30 days to come up with more cash, more collateral – or just to wait and see if the ENX share price recovered. This is where things become significantly contested.

Perhaps the most damaging (if hard to prove) claim Brouze has made against Chapman/Peresec is that they allegedly manipulated the price of ENX shares for a brief period to trigger a default.

The evidence provided for this in his affidavit relies on patterns of trade in the period. Essentially, according to him there was an unusual amount of trading which kept the share price at an unusually low level for only two weeks. Brouze cannot, without more information, put that directly at Chapman’s door.

Which is why he has been fighting a separate battle with the JSE to get access to detailed trading data to identify who traded shares at what time. An initial request through the Promotion of Access to Information Act was initially successful but the bourse has taken a ruling by the Information Regulator to court [see disclosure below].

Chapman has, in other court cases involving Brouze (there have been a few) attributed the share price drop to a variety of real-world events including a failed transaction between Extract and Bidvest.

One contentious counter-allegation coming from Chapman is that it was actually Brouze manipulating the ENX share price by buying loads of shares with debt and losing his ability to do so – hence the drop.

In this regard, Peresec laid a complaint with the Financial Sector Conduct Authority which contains several more allegations of market manipulation on Brouze’s part, not least that he was the one who failed to make a mandatory offer after he and related parties had earlier acquired over 35% of ENX.

Brouze has answered this, somewhat ironically, with an argument similar to one Chapman would later use in his own defence – “A commercial or funding relationship does not, by itself, mean that one party beneficially owns or controls another party’s shares.”

Brouze’s complaint however has another element.

He says that Chapman was not letting him wait out the 30 days and instead exerted “extraordinary pressure” to just give up the shares.

Chapman added a sweetener in the form of a short-term R150-million loan to tide Brouze over. But this new deal for some reason had to be concluded immediately with Chapman sending Brouze a Whatsapp message reading “You sign today. Or we revert to first deal. Those are instructions from this team”.

A week later he sent another reading that “you should be left with nothing on every version according to everyone here”. And it only got nastier with Chapman threatening a “hard close out of David Brouze accounts as [opposed] to a negotiated one, which will be very bad for you and possibly palatable for us … get out of Peresec world make some money and redeem yourself. It cannot be with us”.

Chapman has, in his affidavit, said that there was no gun to anyone’s head and that there was simply “no prospect of Mr. Brouze rectifying his position within the 30 day period”. The short-term loan was stuck on the deal “purely out of goodwill”.

The pressure to have Brouze sign over his shares was necessary because “waiting was not neutral” but rather involved “[Peresec carrying] an unhedged, deteriorating exposure on behalf of its other clients and its regulatory capital, secured by assets whose stated value could no longer be trusted”.

In other words, the exposure to Brouze was toxic and had to go as soon as possible.

And so, all the Extract shares went to Peresec.

The very next day, 20 May, the price of ENX shares started going up again and, on Brouze’s version, he would’ve survived with all his assets intact if he had simply been able to wait out the 30 days.

He also ascribed the sudden recovery of the ENX share price to Chapman stopping his alleged share manipulation after his objectives were met. For a savvy investor Chapman had shown a suspicious level of resignation about ENX’s prospects, says Brouze.

Chapman in turn attributes the immediate recovery to market developments and – further down the line – to Peresec’s own intervention.

Chapman also says that while the share price drop may have triggered the default, the terms of the agreement were such that there were additional requirements to reverse the default within the 30 days other than just restoring positive net asset value.

Brouze, in other words, had no chance.

In his response to our questions Chapman elaborated extensively on what he claims is Brouze’s duplicity and opportunism as someone simply set on recovering his losses by any means possible.

Brouze in turn says that his “claims are straightforward…the recission of the disputed transaction and restoration of the relevant securities and value”.

“My concern is not necessarily that every questionable transaction was undertaken solely for Peresec’s own financial benefit. In many cases, the benefits flowed to other related parties rather than to Peresec directly.

I have no interest in destroying Peresec or pursuing individuals for the sake of it. I want proper systems and controls put in place, and I want the historical issues corrected. “

But now, with Extract in the bag, the next part of the alleged scheme kicked in. With the control of Extract came control of the 33% of ENX this company owned.

Coup number four

Hannington, acting for MCC (the Extract subsidiary holding the ENX shares), demanded a special meeting of ENX shareholders on 5 June 2020 where they would vote to remove most of the board and install Chapman, Hannington and other associates.

As had been the case at Zarclear, the board soon, on 18 June, received undertakings from a group of shareholders with a collective stake of 51% pre-emptively supporting the resolutions which prompted the old directors to resign without the need for the meeting.

And as at Zarclear these shareholders joining hands with Peresec were Sean Katz, Kevin Ellerine, the Sui Generis fund and a company belonging to Paul Baloyi.

Baloyi was, as we know, part of Chapman’s Nkholi consortium. He was however also a shareholder and director of ENX. Other directors of ENX would soon fret over this potential conflict of interest.

Minutes from board meetings provide insight into how events transpired.

Very shortly after seizing Brouze’s indirect shareholding in ENX (around 19 May), Chapman had reached out separately to various members of the company’s board.

At an evening board meeting on 2 June, ENX chairman, Steve Booysens said he was approached the previous day and, according to the minutes, Chapman told him that he wanted to take ENX “in a slightly different direction” – including making Hannington an executive, himself a director and his associate Baloyi (who was already on the ENX board) the new chair.

The plan was ultimately to delist ENX and do something similar to what was happening at Zarclear and African Phoenix.

According to the minutes Booysen told his fellow directors that “it was clear from his interaction with [Chapman] that [his] intention was to populate the Board with his own people who would accede to his will”.

Allan Joffe, another board member Chapman had approached, said that Chapman had been “quite aggressive” and that his stance was “either you’re with me or you’re against me”. Joffe had shares in ENX and Chapman allegedly wanted him to vote with him and “implied that those who had invested alongside him in the past had done well and he made reference to Zarclear and African Phoenix in this regard”.

The board met again the next morning to prepare for a brief to legal counsel. One concern was that Chapman had been plotting his takeover with Baloyi (who was on the ENX board yet said nothing).

Baloyi told us he has nothing to add to Chapman’s response to us. That response was that “Mr Baloyi was not involved in, consulted on, or kept abreast of the Brouze matter, the default, or any acquisition of enX shares. That matter was confined strictly to Peresec’s risk and legal teams, precisely because of the sensitivities involved. No plan concerning control of enX was discussed or formulated with him at any time before my engagement with the enX board”.

Joffe added that members of Chapman’s “bloc” of supporters very possibly had been buying ENX shares at prices higher than what was the case at the time of this takeover.

This would be a consideration if a mandatory takeover was triggered, although it has transpired that the new bosses of ENX, again, did not make one at any price.

As things turned out, Hannington became CEO, Baloyi became chair and Chapman got appointed to the board as a non-executive director.

Better late than never?

The TRP investigation that unearthed much of these facts ended with a settlement that saw belated mandatory offers to buy the shares of minority shareholders of all of Zarclear, African Phoenix, Extract and ENX.

The deal was announced in May 2023 and remains the subject of Butters’s legal challenge.

There are many points of attack on, on the one hand the actual conduct of the investigation and, on the other hand the allegedly paltry value of the settlement – despite the TRP calling it “astronomically” more than minority shareholders might otherwise have received.

And another very clear problem with the settlement is that a mandatory offer in 2023 cannot “unscramble the egg” after the shareholdings of the various companies have changed dramatically over time – not least because there had been a very belated general offer to shareholders of Zarclear in 2020 (at a price experts deemed below fair value).

And then it also appears that the TRP more or less arbitrarily set a price at which the offer was to be made based on an arbitrary reference date for when the concert parties were deemed to have taken controls – dates more than a year and half later than what actually transpired at Zarclear.

Ultimately, a precise calculation of the overall damage done or potentially done is difficult.

Another complainant to the TRP, Albie Cilliers, gave a not-unreasonable summary of another consequence:

“What message is this sending to the world? That it’s ok to come to the JSE in SA and transgress the Act and Takeover Regulations, and IF you get caught (due to some pesky activist investors or whistle blowers), the worst outcome for such a person is just to make a mandatory offer much later, with no other accountability, and life as corporate raiders just goes on as before for them, while being extremely richer as a consequence”.

But a full understanding of how the TRP allegedly failed to police people wielding significant economic power will have to wait for Part Two of this story.

It however clearly has consequences for the future more than for the past.

*DISCLAIMER: David Brouze in involved in court proceedings against the JSE due to his attempt to gain access to trading data that might bolster his allegations of market manipulation. The Information Regulator ruled in his favour that the JSE should disclose the data in terms of the Promotion of Access to Information Act. The JSE is seeking to review this decision. AmaBhungane is potentially joining this case as a friend of the court to argue for greater transparency in financial markets.

The post ANALYSIS | Peresec: Trusted JSE captain or feared corporate pirate? appeared first on AmaBhungane Centre for Investigative Journalism.

South African journalist Roshan Micah Reddy, who is attached to the International Consortium of Investigative Journalists (ICIJ), went missing in Djibouti on Saturday, along with his “local fixer”, Kooki Mahmoud.

Department of International Relations and Cooperation (Dirco) spokesperson Chrispin Phiri said the department was aware of the disappearance, but he was unable to provide further details.

According to Committee to Protect Journalists (CPJ) Africa director Angela Quintal, as of Sunday morning, there have yet been no further updates.

“CPJ is deeply concerned by reports that South African journalist Micah Reddy and his local fixer, Kooki Mahmoud, are missing in Djibouti and urges authorities to immediately clarify their whereabouts and ensure their safety,” Quintal said.

According to a media house in the East African country, La Voix de Djibouti, Reddy had been staying at the Escale International Hotel and had been in Djibouti since Thursday.

It said the ICIJ and his colleagues had received no news from him since 06:00 on Sunday.

La Voix de Djibouti further claimed that the hotel was believed to be owned by members of the family of Djiboutian President Ismaïl Omar Guelleh and was known to be a stronghold of the Djiboutian secret services.

Reddy’s mother, Tessa Reddy, told News24 that the family had last heard from Reddy on Saturday morning and was “very concerned”.

According to his mother, Reddy, who is based in Johannesburg, travelled to Djibouti on Thursday for an assignment.

However, News24 understands that he was not there to focus on Djibouti.

He was due to return on Monday.

Quintal confirmed that Reddy was there and that he was “not focused on Djibouti.”

Attempts to reach his employer for comment were unsuccessful at the time of publication.

Previously, Reddy worked as an investigative journalist at the amaBhungane Centre for Investigative Journalism in South Africa, which he joined in 2017. Before that, he was the national coordinator for media freedom and diversity at the Right2Know Campaign.

Reddy holds a master’s degree in African studies from Oxford University and a bachelor’s degree in history from Wits University.

He was also the managing editor at the Yemen Times in Sana’a and has worked as an editor in Egypt, as well as on a range of freelance research and reporting projects, most recently in Ukraine.

The post FOUND: SA journalist Micah Reddy, ‘local fixer’ go missing in Djibouti appeared first on AmaBhungane Centre for Investigative Journalism.

The meeting had been called in May 2025 to settle long-outstanding debts between PetroSA and a junior fuel trader, Nako Energy.

PetroSA owed Nako R605-million for a cargo of petrol it bought in June 2024, but had struggled to sell because it was tainted with a problematic chemical additive. Nako, in turn, owed PetroSA R832-million for a cargo of diesel it had bought and never paid for.

• Read AmaBhungane’s Dirty Fuels investigation, which covers the diesel deal in part 1 and the unleaded petrol deal in part 2.

PetroSA should have had a R227-million upper hand, while Nako – whose claim to fame was largely its partnership with PetroSA – should have been grovelling.

Instead, Nako persuaded PetroSA to accept a new deal: PetroSA would buy another 11 cargoes of unleaded petrol from Nako and receive a discount of 45c per litre. Once PetroSA had sold 505 million litres of fuel, it would be R227-million richer, and Nako’s debt would – hey presto – be eliminated.

When PetroSA’s then interim CEO Sesakho Magadla appeared in Parliament last year, she said: “[W]e are both owed by Nako and we also owe Nako and in us trying to find a solution – that balances what we need to do and also make sure that PetroSA does not suffer losses – both parties have agreed in terms of the acknowledgement of debt, in terms of the commercial settlement and also finalising the repayment plan.”

Yet the deal is far worse than it appears because once Nako had PetroSA’s signature on an acknowledgement of debt, it ceded the document to its lenders who were demanding to be paid for the same shipment of fuel.

This is a classic bait-and-switch: PetroSA thought it was negotiating with a trusted partner and that the two opposing debts would cancel each other out. Instead, its half of the debt was ceded to Nako’s creditors, whose lawyers soon came calling.

Now – with a letter of demand in one hand and a toxic petrol deal in the other – PetroSA is facing liquidation. A memo, apparently written by acting CEO Nombulelo Tyandela and sent to PetroSA staff over the weekend, said that Nako had approached the Western Cape High Court on Friday for “an order placing PetroSA under provisional liquidation”.

“PetroSA is considering the application and is obtaining the necessary legal advice,” a spokesperson confirmed on Wednesday.

PetroSA’s last hope is that Parliament will pass the South African National Petroleum Company Bill, and roll all its debts into a new state-owned entity, funded by the taxpayer.

PetroSA declined to comment on the 59 detailed questions we have sent to them over the past two weeks, and all emails and calls to Nako’s sleek Melrose office went unanswered.

This is the story of how PetroSA made a bad deal much worse.

(If you recall last year’s Dirty Fuels investigations, skip to Part 2: ‘Worst. Deal. Ever.’ If you want a recap, read on.)

Part 1: The deal

PetroSA should have known better: in September 2022, a little-known fuel trader, Nako Energy, offered to sell PetroSA unleaded petrol at an unusually juicy price: 50c off the government-determined basic fuel price (BFP).

Fuel trading works on razor thin margins, and the other offers PetroSA received – from Glencore, Addax and Augusta – were uneconomical. But at BFP less 50c, Nako’s offer would generate a profit of R25-million for every vessel that landed in Mossel Bay.

“There’s 50 million litres [in a tanker], so PetroSA would make R25-million profit, which is higher than any diesel cargo. That’s when really the interest in Nako became bigger,” the company’s chair and majority shareholder, Nkosinathi Ngwenya, told us.

Yet as one experienced fuel trader told me, the first question PetroSA should have asked – when confronted with a deal that seemed too good to be true – was: what is in the fuel?

Instead, PetroSA agreed to a six-month trial with Nako Energy, which would automatically be renewed for another two years if things went well: a potential R11-billion deal that PetroSA hoped would help it capture the market for unleaded petrol in the Garden Route. 

What was in the fuel?

Within a month of Nako’s first cargo being delivered, customers at TotalEnergies and Caltex stations started complaining that the fuel was leaving stains on the paintwork of certain cars and motorbikes. By February 2024, complaints had arrived from Shell and Engen as well.

An internal PetroSA investigation would later conclude that the unleaded petrol “reacted to the car paint to the extent that these cars needed to be repainted. The [fuel] affected certain paints and not all of them and also seemed to affect older cars. This was confirmed by the panel beaters in Mossel Bay who treated a few of these cars that needed to be repainted.”

The Garden Route has a relatively small market for fuel. To save on costs, the oil majors share infrastructure and buy fuel from each other: “In Mossel Bay, the established arrangement is that the oil majors [had] supply agreements with PetroSA for all fuel products from its refinery, when it was operational. Currently, PetroSA supplies these companies using imported fuel,” Phila Mzamo, a spokesperson for the Fuels Industry Association, FIASA, told us in 2025, adding this this was a “common practice in the fuel industry, known as a hospitality arrangement”.

What this means is that unbeknownst to customers, many petrol stations in the Garden Route had sourced their fuel from PetroSA, who in turn had bought it from Nako.

Internal PetroSA tests would later establish that the fuel contained very high levels of N-methylaniline (NMA), a chemical additive that can boost the octane rating of a low-octane fuel, turning an 89 unleaded petrol into a 93 or 95.

“This particular blend it was supposed to be a gamechanger,” PetroSA’s then-head of trading Vusi Xaba, told us when we interviewed him last year.

However, NMA is also toxic and can cause the build-up of gum in the fuel, which damages car engines. As a result, it’s banned as a fuel additive in Europe, China and Russia – but not South Africa.

Prepaying for fuel

By April 2024, Nako’s third cargo of unleaded petrol was on its way to South Africa: 50-million litres abroad a tanker called Daytona. But PetroSA was also facing a mutiny from its downstream customers who had pulled the fuel from their service stations.

“[B]oth Sasol and Astron Energy analysed the product and found in excess of 6% NMA,” Mzamo told us. “The NMA recommended rate is only around 1.2% – it is known above this level that gum formation is accelerated and furthermore compatibility with other materials is brought into question.”

The problem is that NMA is not banned in South Africa, nor is it tested for, so technically the NMA-laced fuel can pass the South African National Standards (SANS) tests without issue.

PetroSA was faced with a choice: accept a third cargo of Nako’s fuel and face the possibility that none of the oil majors would be willing to buy it. Or reject it – and face a legal fight with Nako.

The problem was that PetroSA had already agreed to make R150-million prepayments to Nako on each cargo, meaning that by April 2024, Nako had allegedly already been paid for a portion of the third cargo.

So PetroSA doubled down: it issued an “irrevocable and unconditional” payment undertaking to Nako, and its UAE-based supplier, Blue Ocean, promising to pay for the fuel within 30 days of it being delivered.

The fuel was delivered two months later, but two years on, half the money remains outstanding and the payment undertaking PetroSA signed now threatens to bring the state-owed entity to its knees.

The terrible diesel trade

In April 2024, the cogs were already turning on another terrible deal for PetroSA.

PetroSA had ordered two cargoes of diesel from the Swiss trader Gunvor, that it hoped to sell to Eskom for its Gourikwa Open Cycle Gas Turbines (OCGTs), also outside Mossel Bay. However, there had been no loadshedding since March, which meant that as the OCGTs were not being used and PetroSA urgently needed to find another buyer for the diesel that was already waiting offshore.

Nako Energy should not have been PetroSA’s first choice, but for reasons that we unpacked in our first investigation, it agreed to sell 50-million litres of diesel to Nako at a R1.90/litre discount.

• Read more: Unpack the unleaded petrol deal and the diesel deal in detail in our original Dirty Fuels investigations.

Nako’s CEO, Nqobani Mkhwanazi, told us that major oil companies were offering discounts of up to R1.80/litre at the time adding: “an extra 10 cents is a good incentive. By no means is it preferential”.

So, by August 2024, PetroSA owed Nako R950-million for unleaded petrol and Nako owed PetroSA R933-million for diesel. And neither side was willing or able to pay.

Initially, Nako agreed to pay for the diesel cargo in R20-million/week instalments, but after four months, it stopped, citing PetroSA’s failure to pay for the unleaded petrol in return: “Nako has paid constantly, hoping that when we pay them, they’ll pay us for Daytona, but … nothing has ever come back to us,” Ngwenya, Nako’s chair, told us last year.

Part 2: ‘Worst. Deal. Ever.’ 

By the time amaBhungane published its Dirty Fuels investigation, in May 2025, what may be the worst deal in PetroSA’s history of bad deals, had already been signed.

On 19 May, just before our first exposé, Nako and PetroSA met to sign acknowledgments of debt (AODs): PetroSA agreed that it owed Nako R605-million while Nako agreed that it owed PetroSA R825-million.

But the AOD that Nako signed contained a caveat: “The payment for the abovementioned amount will be subject to a payment plan that will be developed and agreed upon by both parties no later than 31^st May 2025.”

This was a terrible deal for PetroSA: it was handing over an iron-clad “irrevocable and unconditional” undertaking to pay Nako R605-million. In return, it would get its money but only through a yet-to-be-negotiated repayment plan.

That plan, signed a few days later, was mortifying: PetroSA agreed to honour the unleaded petrol deal, signed in 2023, which meant it would buy another 11 cargoes of fuel from Nako Energy at basic fuel price (BFP) less 45c.

At current prices, the deal would cost PetroSA R7.4-billion. It would receive a 45c/litre margin, which after 505-million litres of petrol had been sold, would potentially produce R227-million in profit – the exact amount Nako owed if the two debts were offset.

This was a slightly worse deal than the 50c/litre margin at Nako had originally offered, and seemingly amounted to PetroSA agreeing to write off the R227-million debt in exchange for keeping the original unleaded petrol deal alive.

It’s hard to see why any executive would want to pursue the original 2023 deal though: a year after receiving the Daytona’s cargo, more than half of the NMA-laced petrol was still sitting in PetroSA’s storage tanks in Mossel Bay. PetroSA had managed to sell small quantities: Nako had bought back roughly 3.7 million litres at a R1.35/litre discount and sold it to fuel stations in Gauteng. PetroSA had also moved at least 8 truckloads to Bloemfontein – at a cost of R876,000 – so that the remaining fuel could be blended with untainted fuel.

In short, PetroSA had been trying to offload the chemically-laced fuel for a year but had so far only managed to shift half a cargo (25 million litres).

Yet somehow, the executives at Nako – Ngwenya and Mkhwanazi, who had positioned themselves not just as suppliers but as trusted partners – had persuaded PetroSA that it would find a market for another 505 million litres.

Nako had apparently suggested that future cargoes could come from other suppliers, suggesting that these would not have contained the toxic fuel additive NMA, but PetroSA’s own sales data suggests it would have struggled to sell that volume regardless: between April and August 2025, it had sold just 16 million litres. The Nako deal required PetroSA to move 50 million litres every month.

Yet, when PetroSA’s acting CEO Sesakho Magadla had appeared in Parliament in June 2025, she defended PetroSA’s partnership with Nako: “From a PetroSA perspective, that partnership would have generated value and also changed the landscape for us to produce [unleaded petrol] competitively and also create value for us – and we are now being attacked.”

She added: “We’ve faced challenges. The contractual arrangements that we [have] make sure that both parties manage and mitigate against any further losses, that’s in line with contractual arrangements that are done by the industry.”

But if PetroSA thought it was negotiating with a trusted partner, the letter that arrived in August should have shattered that illusion.

Part 3: The three-way deal

Plane Tree Capital in Sandton describes itself as “bridging the gap between investors and borrowers”: they take money from investors, and they use it to give loans, including to companies like Nako Energy.

In August 2023, Plane Tree had agreed to bankroll Nako’s unleaded petrol deal. It was risky: the buyer was PetroSA, a notorious state-owned entity with the track record of not paying its suppliers – it had closed out the 2023 financial year with R3.5-billion in unpaid trade payables.

The borrower, Nako, was seemingly no more reliable: when PetroSA asked Debtsource, a trade credit specialist, to review Nako’s credit worthiness, Debtsource had given the company their lowest rating of “E”, which stood for “Unacceptable risk – recommend cash terms only. This category embraces customers who are financially weak and/or chronically unreliable in payment habits.”

Extracts from PetroSA emails suggest that by January 2024 the relationship between Nako and its lenders was already strained. Nako had delivered just two cargoes and payment to Plane Tree on the second was seemingly already late.

“Yes the funds should be in the Nako account,” an unnamed Nako executive allegedly told Plane Tree in a Friday 26 January email. “I was sitting with CFO when she approved the payment on the system. It’s now up to the back office.”

By Monday, there was still no sign of the payment, and Plane Tree’s CEO, Richard Hart, was now irate: “This is now becoming an issue for us as we are once again at month end and this payment has still not been sent over. We have a number of clients awaiting funds and it is impossible for us to run our business with this lack of clarity. Please provide an update on when we can expect these funds,” he had supposedly written, according to an email extract.

Nako had forwarded Hart’s email to Tyandela, then PetroSA Group CFO, with a note to “humbly request an early payment for the cargo”, adding: “Our funders wish to close the book”.

Nako’s late payment hadn’t been enough to end the relationship with Plane Tree though, and when PetroSA agreed to accept a third cargo of unleaded petrol, Plane Tree seemingly put up the cash to pay Blue Ocean, the supplier in the UAE.

After a 108-day delay, the Daytona finally discharged 50 million litres of unleaded petrol in Mossel Bay on 17 June 2024. PetroSA had signed that “irrevocable and unconditional” payment undertaking and was supposed to pay Nako (and in turn Plane Tree) within 30 days, but this, after all, was PetroSA.

Two years later, Plane Tree is still waiting to be paid.

Nako bares its teeth

In June 2025, the PetroSA CEO, Magadla, had told Parliament that she was working with Nako to find an amicable solution – “to make sure that both parties manage and mitigate against any further losses,” she said.

In reality though, Nako was working hard to protect its own interest: in August 2025, PetroSA received a letter informing it that Nako had ceded its debt book to Plane Tree Capital, and with it the “irrevocable and unconditional” payment undertaking (signed in April 2024) – which PetroSA had tried but failed to cancel – and the R605-million AOD (signed in May 2025). 

What this meant is that Plane Tree now owned PetroSA’s debt, and could collect the full R605-million from PetroSA whenever it wanted – even though PetroSA had signed the AOD and agreed to take more petrol from Nako in the mistaken assumption that would be part of a broader settlement.

In fact, PetroSA and Nako had drafted an over-arching settlement agreement that would have ensured that the two AODs were offset against each other. This would have left PetroSA in the comfortable position of being owed R227-million by Nako.

But before the settlement agreement could be signed, Nako had ceded its debt book to Plane Tree and PetroSA had seemingly been out-manoeuvred.

In November 2025, Plane Tree’s attorneys, ENS, sent PetroSA a letter of demand – it now wanted R620-million plus interest: “Our client hereby demands immediate payment of R620,519,979 plus interest on this amount at the prescribed rate of interest from at least 20 May 2025 to date of final payment.”

Hart, the CEO of Plane Tree, declined to say how the R605-million debt had risen to R620-million. He did, however, confirm that as of September 2026, Plane Tree had not withdrawn the letter of demand: “This matter is subject to legal and commercial discussions with the parties involved. Accordingly, we do not wish to enter into public discussions about an ongoing matter,” he told us.

“As you have the contents of our letter, you have the basis for our claim against PetroSA. The letter of demand remains active.”

Part 4: Liquidation

The cession of Nako’s debt to Plane Tree complicates things for PetroSA: Plane Tree has already demanded R620-million from PetroSA, and can bring an application to liquidate the state-owned fuel company tomorrow if they don’t pay.

PetroSA has, according to records we’ve seen, recently reduced its debt to Nako to below R500-million, but this is still more than PetroSA can likely afford to pay.

By comparison, if PetroSA wants to demand money from Nako, it must first find R7.4-billion to buy the agreed-upon 11 cargoes of fuel, then sell 505 million litres of petrol that likely no one wants to buy, just to reclaim a fraction of what it is owed.

Once the 11 cargoes have changed hands, PetroSA is entitled to claim the rest of its money, but because Plane Tree owns Nako’s debt book, it’s likely the Sandton lenders would have first dibs on any money currently in Nako’s bank account.

In short, if PetroSA wants to stay out of liquidation, it’ll likely first have to find the money to pay Plane Tree. And if Nako is no longer in business when the farcical petrol deal concludes, PetroSA risks losing its R832-million claim for the diesel it sold to Nako as well.

We put 59 detailed questions to PetroSA at the end of August and to its parent company, the Central Energy Fund, last week, but both ultimately decided not to comment.

From what we understand, officials have told the board that, in their view, Nako’s cession to Plane Tree “cannot be executed or implemented in any form or shape”, but internally, PetroSA was advised to get an urgent legal opinion to see where it stands.

On Monday, amaBhungane received a memo, apparently written by Tyandela, who is now acting CEO, and circulated to staff over the weekend, informing them that Nako has brought an application to liquidate PetroSA.

 “Management is mindful that news of the application may understandably cause concern and uncertainty among employees,” Tyandela apparently wrote. “Employees will be kept appropriately informed of material developments as the matter progresses. We ask colleagues to rely on official PetroSA communications and to refrain from speculation regarding the proceedings.”

Nako could not be reached for comment, while a spokesperson for PetroSA said: “PetroSA confirms that it has received a court application from Nako Energy in relation to the company. PetroSA is considering the application and is obtaining the necessary legal advice. The matter is before the Court and PetroSA will respond through the appropriate legal process.”

The taxpayer to the rescue?

The one downside for Plane Tree – or anyone else seeking to liquidate PetroSA – is that the state-owned entity is already hopelessly broke: SARS is owed R4-billion and last year moved to seize the shuttered Mossel Bay refinery as collateral. PetroSA also owes over R700-million to fuel trader Addax, according to leaked records we have seen.

But things are looking up for Plane Tree because minerals and energy minister Gwede Mantashe has asked Parliament to pass the South African National Petroleum Company (SANPC) Bill, which would merge PetroSA with three other state-owned companies: SANPC, the Strategic Fund and iGas.

If the Bill is passed in its current form, both the debts and the assets of PetroSA would pass to the newly-enlarged SANPC. But, as amaBhungane has pointed out in a presentation to Parliament, the Bill would also open the door for government bailouts.

“The Minister of Finance may, from time to time, approve advances and grants to the company… the Minister of Finance may approve special levies to provide funds for the Company…” section 26 of the Bill reads. 

Opposition parties are pushing back though. Last month, in a rare show of unity, MPs from the DA, EFF, MKP and ATM backed a letter written by the DA’s James Lorimer, calling for debate on the Bill to be stopped until PetroSA makes a full disclosure of its financial affairs.

“The fact that PetroSA has remained so opposed to revealing full details of its operations must on its own give rise to a suspicion of malfeasance or gross failure that is being concealed in order to save staff or officials from accountability,” Lorimer wrote in a letter read out by the chair of the Portfolio Committee on Mineral and Petroleum Resources, the ANC’s Mikateko Mahlaule. 

On Tuesday 22 September, officials from the Department of Mineral and Petroleum Resources are scheduled to appear in Parliament to answer questions about rapidly deteriorating state of PetroSA’s finances.

The main culprit on PetroSA’s balance sheet? Nako Energy.

The post PetroSA was owed R227m. It may end up losing R1.4bn instead. appeared first on AmaBhungane Centre for Investigative Journalism.

A newly-emerged letter penned by Fazel, dated 9 June 2026 and directed at Parliament, contains fresh allegations against the National Intelligence Coordinating Committee (NICOC) and the Joint Standing Committee on Intelligence (JSCI).

It, for the first time, implicates NICOC in Fazel’s suspension by President Cyril Ramaphosa on 14 October last year. It also reveals that the JSCI had told Ramaphosa in February this year that its investigation into Fazel’s alleged misconduct, which originally justified his suspension, had been “restarted”.

In doing so the JSCI has seemingly abandoned the basis of its initial recommendation for Fazel’s removal – four months after the fact.

Fazel’s letter, – which amaBhungane has seen – is addressed to the Speaker of National Assembly, Thoko Didiza, and her deputy, Annelie Lotriet.   

“On 15 April 2026, I wrote to the Chairperson of the JSCI [Sylvia Lucas]. I expressed concern that, despite having informed the President on 20 September 2025 that it was investigating my conduct, and despite that supposed investigation having formed the basis for my suspension by the President, the JSCI now appeared to accept that no such investigation had in fact been conducted,” wrote Fazel.

Fazel’s letter also indicates that NICOC, an umbrella body of security agencies, had an alleged irregular involvement in the revocation of his security clearance, a development that paved the way for the subsequent push to remove him.

“On 12 December 2025, President Ramaphosa informed me that the JSCI had recommended that I should be removed from my position following a decision by NICOC to permanently revoke my security clearance. NICOC is (mainly) comprised of the State Security Agency (SSA), the Crime Intelligence Division of the South African Police Service, Defence Intelligence, and the coordinator of Intelligence – the intelligence services for which I have oversight responsibility.”

“I also pointed out [to Lucas] that the JSCI had relied on NICOC’s decision to permanently revoke my security clearance when it recommended my removal from office, notwithstanding the absence of any legal authority on NICOC’s part to take such a decision. Despite its expertise, the JSCI has not explained why it believed that NICOC had the authority to permanently revoke my security clearance.”

In his letter, Fazel also indicates that while the President had been told one thing – that the investigation had been “restarted” – Fazel himself was effectively told that these things unfortunately just take time.

“On 21 April 2026, the Chairperson of the JSCI informed me that the investigation had been delayed by ‘preparatory processes’ and the ‘gathering of information’. I was told that, once the Committee had considered the information before it, the specific allegations of misconduct would be communicated to me, and I would be afforded an opportunity to respond. The Chairperson also said that the delays were not attributable to bad faith and that the Committee remained committed to minimising any prejudice arising from them … I noted that no explanation had been given for the Committee’s delays. Nor was any explanation given as to why, more than seven months after the JSCI informed the President that I was being investigated, the matter remained at a preliminary stage.”

Last month amaBhungane reported on an explosive court application by Fazel to overturn his suspension and the withdrawal of his security clearance, challenging President Ramaphosa, Didiza, the JSCI and Minister in the Presidency, Khumbudzo Ntshavheni (among others), to provide evidence that he was behind the leaking of confidential information.

Critically, Fazel’s papers provide context into why he may have been targeted in his removal from office – having led several probes into the country’s intelligence structures while facing systematic resistance in doing so.

This is outlined in a dramatic letter he drafted to Ramaphosa just two weeks before his suspension last October. 

In Fazel’s version of events, he had begun to shake the security services’ tree – putting a target on his back.

On 22 July 2025, two weeks after KZN Police Commissioner Nhlanhla Mkhwanazi’s broke rank in his now famous press briefing, the JSCI informed Fazel that it was investigating three complaints against him: (i) a complaint received from the NICOC, acting on a report received from an intelligence service; (ii) a complaint received from Defence Intelligence; and (iii) a complaint related to the disclosure of classified information about a property procured in Durban by Crime Intelligence for operational purposes. 

On at least one front, the third one above, Fazel has been publicly vindicated.

As part of the wider complaints against Fazel, the JSCI is probing whether he was behind the leaking of a classified report into SAPS Crime Intelligence (CI), implicating the unit’s head, Dumisani Khumalo, and suspended SAPS national commissioner, Fannie Masemola.

According to various reports and public statements, Fazel’s probe into CI, which was initiated in January 2025, following a referral by former police minister, Senzo Mchunu, focused on procurement of covert properties.

It also dealt with issues of security clearances and the hiring of Dineo Mokwele as a Brigadier as head of the Technical Support Services division of CI in April 2024.

Earlier this month (11 August), the Investigative Directorate Against Corruption’s (IDAC) Drushantha Ramsamy testified before the Madlanga Commission of Inquiry, alleging that Mchunu arranged for someone to fly and meet with now-suspended IDAC chief investigator Dylan Perumal, to hand over the IGI’s classified report.

“All I know is that the Minister sent the report that IGI refused to give us, to Mr Perumal. And in terms of the Act and the mutual legal assistance that we usually give them; it is not proper procedure.”

In other words, if the report was leaked it was not by Fazel but rather by the Minister Mchunu.

Approached for comment Mchunu said: “At this stage I would not want to respond, but I will issue a statement on this topic and other matters in due course.”  

Spokesperson to the President, Vincent Magwenya would not be drawn to comment on aspects of Fazel’s letter to Parliament related to Ramaphosa.

“This matter is in court. Therefore, we are not going to publicly engage over it until those court processes are completed.”

NICOC Acting Coordinator, Dr Ntandazo Sifolo didn’t answer specific questions put to him by amaBhungane about NICOC’s alleged decision to “permanently” revoke the IGI’s security clearance, claiming NICOC could only account to the JSCI.

“It is in this respect that National Intelligence Coordinating Committee (NICOC) wishes to kindly submit that it is unable to comment on intelligence-related or classified matters. We are therefore not in a position to provide any detail on the matters raised in your enquiry. This is consistent with the statutory framework governing the intelligence services including protection of information legislation.”

You can access his full response here.

Didiza confirmed she received the letter from the IGI and said she engaged with the JSCI on the issues raised therein.

Questioned about whether she was concerned that the IGI has been on suspension for close to a year without any update into the investigation of his alleged misconduct, Didiza said: “The JSCI will be meeting this week to amongst other things to deliberate on this matter [sic].”

Despite a back-and-forth between the IGI, the President and the various intelligence structures, one thing is evident, the upwards of a billion rand held within the secret service accounts for CI, DI and SSA have for more than a year been without oversight, all while the fate of the IGI hangs in the balance.

The post Investigation into IGI alleged misconduct stalled, as secret fund millions remain without scrutiny appeared first on AmaBhungane Centre for Investigative Journalism.

The flurry of payments was made to three suppliers between January and April 2025, when Eskom was faced with a return of loadshedding.

“The period between January and March 2025 placed significant demands on the power system and required rapid operational responses and difficult decisions by employees and executives to maintain security of supply and protect grid stability,” Eskom CEO Dan Marokane said in the statement. “However, operational pressures do not diminish our obligation to comply fully with internal controls and governance requirements.”

• Read: Eskom’s seven-page press release

Eskom said that it had occasionally made prepayments to diesel suppliers in the past to stave off loadshedding, adding: “This may have contributed to advance payment being viewed as an available operational mechanism. However, previous use did not remove the requirement to obtain the prescribed approval or, where action was taken before approval, to complete the required ratification promptly thereafter as per governance processes for handling emergencies.”

What made the prepayments more controversial in this case is that they were channelled to three relatively obscure suppliers who were already struggling to deliver fuel at the pace Eskom needed.

In its statement, Eskom stressed that it was between a rock and a hard place: “Eskom faced a choice between enabling suppliers to rapidly source and move fuel into Eskom’s diesel supply chain or accepting a materially greater risk of prolonged higher stages of loadshedding.”

Yet amaBhungane latest investigation suggests that prepayments were ineffective at guaranteeing a reliable supply of diesel to Ankerlig.  

Minutes from a high-level meeting on 23 February 2025, when Eskom was in the grip of stage 6 loadshedding, quotes that Eskom’s head of generation, Bheki Nxumalo, as saying: “obviously we’re not happy … these current contractors are just not performing at the levels that we want to see… It’s just too slow.”

By this point, Eskom had already made four prepayments to its diesel suppliers. In the days that followed one provider, Severino Industries, received another two prepayments: for R379-million and R473-million.

Eskom has not addressed this contradiction, one of many issues glossed over in the press release.

Eskom said that aside from the R3-billion in irregular payments made on the current contract, it had also identified R38-billion in irregular expenditure on the previous diesel contracts, which came to an end in December 2024.

“The irregular expenditure relates to expenditure incurred without obtaining approvals from the relevant delegated authority. Whilst no financial loss has been identified, however the matter has been referred to Eskom’s Group Security & Investigation for investigation,” it said.

Eskom added that it had reported both the R38-billion (previous contracts) and the R3-billion (current contracts) to its auditors and National Treasury.

Yet our latest investigation suggests that the irregular payments on the current contract went on for much longer than Eskom has so far admitted.

While the press release repeatedly refers to the tough operating environment that Eskom faced between January and March 2025, it does not explain why Eskom seemingly continued to make lavish upfront payments to suppliers after loadshedding came to an end.

In July 2025, for instance, Eskom made two payments of R360.5-million to one of its suppliers, Lanele Resources, and recorded 40 million litres of diesel as “received” in its SAP accounting system. A year later, only a fraction of that diesel has actually been delivered, making this, in effect, a R721-million prepayment.

In its press release, Eskom repeatedly stressed that “no evidence was found that diesel paid for by Eskom is missing”. Instead, Eskom maintains that the outstanding diesel – which is currently worth over R1-billion – “is in storage or available on demand when scheduled”.

The last part is crucial: the tender and contracts were clear that payments would only be made after the diesel had been delivered into the suppliers’ storage tanks, which are located a short drive from Ankerlig power station. Vesquin, the local subsidiary of fuel trader Vitol, currently holds five million litres of fuel in storage earmarked for Eskom. The rest – roughly 34 million litres – exists as the equivalent of an IOU: an obligation to deliver fuel when it is needed.

In short, Eskom has shifted the goalposts: while the tender said that diesel had to be “in storage” before payments could be released, Eskom now seems willing to accept that the diesel is merely “available on demand when scheduled” from a third party (Vesquin) who has no contractual relationship with Eskom.

Eskom also appears to have backtracked on whether the R21-billion tender was improperly awarded.

In May this year, after it received an interim report from its investigators, Eskom said: “As a result of the findings contained in the interim report, Eskom will commence with disciplinary proceedings against several employees who breached our procurement processes. We expect that more employees may be charged once the final report has been issued to Eskom.”

Yet in Eskom’s latest press release, it says that a separate legal review of the forensic report “did not sustain allegations that the procurement award process under Tender MWP2197GX was compromised”. The statement does not mention disciplinary action against any employees.

The post UPDATE: Eskom admits to R3-billion in payments “outside of contractual terms” appeared first on AmaBhungane Centre for Investigative Journalism.

They were looking for diesel: not to buy it, but to locate 39 million litres (currently worth R1-billion) that belongs to Eskom. But instead of welcoming them in, the security guards allegedly shut the gates.

For over a year, the investigators, from forensic firm Itsamaya Holdings and Eskom’s own Group Investigations and Security Department, had been digging into allegations surrounding diesel contracts, potentially worth R21-billion, that Eskom had signed in December 2024.

Eskom has been tight-lipped about the investigation, but internal documents independently obtained by amaBhungane show that Eskom had recorded the 40 million litres diesel as “received” at Burgan Terminal in July last year and had made two payments to its supplier, Lanele Resources, of R360-million each.

These were Eskom assets, recorded in Eskom’s books. But did the diesel actually exist?

Three weeks ago, after questions from amaBhungane, Eskom issued a quiet Friday afternoon press release, saying: “Eskom … received an independent verification report confirming that there were no discrepancies between the diesel delivered or available to Eskom and the amounts paid”.

But amaBhungane’s own digging suggests that the R721-million that Eskom paid to Lanele in July last year, likely bought nothing but thin air and a promise to deliver fuel at a later stage.

Both Eskom and Lanele refused to answer questions on the whereabouts of the 39 million litres of diesel, and for two weeks Eskom refused to even clarify what it meant when it said the fuel was “delivered or available”.

But Vitol – the Swiss commodities giant which part-owns the Burgan Terminal – agreed to play open cards: Lanele had contracted Vitol’s local subsidiary, Vesquin Trading, to provide it with diesel for Eskom, it confirmed. 38.8 million litres remained outstanding, but only five million litres were physically in the tanks at Burgan Terminal.

“Vesquin … will deliver the outstanding balance of diesel when it is required,” Vesquin director Harvey Foster told us. “5 million litres [of] their remaining balance will remain in-tank at Burgan earmarked for ultimate supply to Eskom…”

This disclosure is significant: Eskom recorded the diesel as “received” a year ago and paid R721-million for it. Now, it appears that, at best, Eskom had bought five million litres and had an IOU for the rest.

This wasn’t isolated incident. Our investigation suggests that under the guise of fighting loadshedding, Eskom released billion of rands in irregular prepayments to its new suppliers without guarantees.

In May, after receiving an interim report from investigators, Eskom announced that “[d]ue to the suspicion of fraud and corruption, Eskom has reported this matter to the [Hawks].”

The investigators’ final report was due to be handed to energy minister Kgosientsho Ramokgopa at the end of July. Instead, Eskom said that “due to the volume and complexity of the analysis required”, it would need another month to finalise the report.

According to a well-placed source, one reason for the delay has been the question over whether millions of litres of diesel had gone missing. 

Eskom refused to answer any of the 41 questions we put to it last month.

However, evidence that amaBhungane has pieced together from Eskom’s SAP accounting system, emissions records and loadshedding data provides a window into what investigators may have seen: undelivered diesel, more severe loadshedding, and covert prepayments reminiscent of the State Capture era.

Running out of storage

The problem Eskom was trying to solve with the contracts it signed in December 2024 wasn’t just the supply of diesel, it was storage.

Ankerlig, the emergency power plant outside Cape Town, can store 16 million litres of diesel, enough to keep all nine units running for roughly two days. But if loadshedding stretches from hours to days, Ankerlig can quickly run out of fuel. 

The idea behind the new R21-billion diesel contracts was to increase Ankerlig’s storage capacity by securing dedicated storage outside Eskom’s own facilities.

This meant that Eskom would “receive” diesel and pay for it, not when it arrived by truck at Ankerlig, but when it arrived at the suppliers’ storage tanks, which were scattered across Cape Town.

This was a risk: Eskom would record the diesel as “received” on its books, and could instruct the suppliers to deliver it to Eskom within 24 hours, but they wouldn’t actually set eyes on fuel until it was trucked to Ankerlig, which could be days, weeks or even months later.

And it’s here, predictably, where the system fell apart.

The contract begins

Eskom had started January 2025 with an oversupply of electricity and tanks full of diesel at Ankerlig’s Open Cycle Gas Turbines (OCGTs).

By 8 January, things weren’t looking so peachy: several units of the coal fleet had gone down, taking 3 000 MW off the grid, and the tank levels at Ankerlig were dropping.

Still, thanks to its new diesel suppliers, it supposedly had 15 million litres of fuel in storage tanks 55km away, ready to be delivered in less than 24 hours if Ankerlig needed to be fired up to avert loadshedding.

But by 10 January, Eskom was in a panic. In a memo to National Treasury, it said it had been forced to award an emergency R200-million contract to Astron Energy to get diesel delivered that day: “It is critical that fuel is supplied to Ankerlig in order to assist in alleviating the high risk of potential load shedding … the new suppliers are still getting ready to deliver … Astron is the only contractor in a position to deliver the diesel required in the shortest time period required.”

But where were the 15 million litres of diesel (worth R280-million) that were recorded as “received” in Eskom’s books and that were supposed to be sitting in storage tanks just waiting to be delivered?

Shades of State Capture

According to records, Eskom had “received” 10 million litres of diesel on 3 January 2025 from Severino Industries, one of the new suppliers. Three days later, Eskom had paid Severino R179.2-million. 

The fuel was assumed to be at the Burgan Terminal, 55km from Ankerlig, and in terms of the contract, Eskom had the right to demand it be delivered within 24 hours. Yet records suggest that Severino didn’t deliver a drop to Ankerlig until 11 January, even as the tanks ran low and Eskom scrambled to find fuel.

Both the tender and the contract had been clear that Eskom would only pay for diesel that been delivered. But was this just a simple logistical issue or something more underhanded?

On 8 January 2025, Nutinox, another of the new suppliers, gave Eskom a delivery note saying that it had also delivered five million litres of fuel to the Burgan Terminal.

Nutinox hadn’t secured a dedicated storage tank, as the tender required, and the delivery note was a simple one-pager on a Nutinox letterhead, but for the management of Eskom’s peaking plants, this was good enough.

A senior manager signed that the goods had been “received”, and a week later, Eskom okayed a payment to Nutinox for R89.7-million.

Yet when Eskom was desperate for fuel on 10 January, Nutinox’s five million litres was nowhere to be seen. Instead, 10 days later, a new entry appeared on the SAP system, reversing the “goods received” entry as well as the payment.

Nine years earlier, in April 2016, Eskom officials had used a similar sleight of hand to prepay the Gupta-controlled Tegeta Exploration and Resources R659-million for coal that hadn’t been delivered.

As Eskom accountant Snehal Nagar told the Zondo Commission: “[T]he system is set-up where you order goods, when you receive the goods, you pay for it. In this case you almost – I want to call it fooling the system if that’s the right word to use – … what you’re doing is you’re creating an order and you’re settling that order as if you’ve received the goods immediately to affect the prepayment.”

So, we wondered, did Severino and Nutinox’s diesel really exist when Eskom recorded it as “received” in its books in January 2025? Or had Eskom made unofficial Tegeta-style prepayments to its new suppliers?

We put these questions to Severino’s managing director Mziwoxolo Peter, but he missed several deadlines to provide a response.

Nutinox’s sole director and owner, Sibuyile Magingxa, declined to comment, saying: “The matters you have raised fall within the scope of an ongoing forensic investigation, and we will await its finalisation before making any further comment. We would encourage you to also await the outcome of the investigation to avoid prejudicing our organisation or creating a false narrative before the facts have been established.”

The country narrowly escaped loadshedding on 10 January 2025, but it should have been a warning: Eskom was paying for diesel and recording it as “received” in its books, when evidence suggested that in some cases the diesel did not exist.

Prepaying for diesel

By the end of January 2025, one month into the new contract, Ankerlig was at breaking point. Several units at Eskom’s coal-fired power plants had broken down and most of Ankerlig’s turbines had been running flat out for five days.

Emissions records, published on the Eskom website, show that Ankerlig had burnt through 46 million litres of diesel (then worth R858-million) in one month, while internal records suggest that trucks had only been able to deliver 36 million litres. And only a fraction of that fuel had come from Eskom’s new diesel suppliers.

To keep the lights on, Ankerlig had largely emptied its own storage tanks and information suggests that three of its five tanks were now down to their last 10 percent.

On 30 January, Eskom officials wrote an emergency memo, asking for permission to prepay Severino for three million litres of diesel.

Each unit at Ankerlig burns through 40 000 litres of diesel – one truckload – an hour. Three million litres of diesel would buy an extra nine hours of operating time.

Yet records suggest that both Severino and Lanele Resources, still had partially full tanks. Eskom had already paid for this diesel – two million litres in Severino’s tank and four million in Lanele’s – yet wanted permission to prepay Severino for another three million litres.

According to the SAP system, Eskom had “received” five million litres from Lanele on 13 January and paid for it. But by 30 January, Lanele had seemingly delivered less than one million litres to Ankerlig.

When we interviewed Lanele CEO Lwazi Mtshali in April, he told us that his company had gone above and beyond to make sure Ankerlig was supplied with fuel: “[W]e’ve had times when … by the time they’re telling you their demand they’re actually burning already. So, everything is happening at the same time – you are solving for product, you are getting it into tank and you’re already moving trucks to Ankerlig – all of this is happening pretty much within a space of 24 hours. Sometimes it’s even happening overnight.”

Why, we asked Mtshali now, had Lanele been so slow to deliver when the country was faced with loadshedding?

Mtshali declined to answer any further questions, saying: “We also have no objection to amaBhungane discussing this contract and our performance directly with Eskom.”

Loadshedding returns

On 31 January 2025, for the first time in just over 300 days, Eskom announced that it would have to impose loadshedding, at stage 3.

“This is a potentially temporary setback,” Eskom CEO Dan Marokane said in a statement. “Loadshedding is largely behind us due to the structural improvements in our generation fleet. However, over the past seven days, we have experienced several breakdowns that require extended repair times. This has necessitated the use of all our emergency reserves, which now need to be replenished.”

The following day – with loadshedding still in place and Ankerlig’s tanks dangerously low – Eskom switched off Ankerlig entirely, taking 1200 MW off the grid.

Eskom describes this as a strategic decision: “[W]eekends generally provide an opportunity to replenish emergency reserves such as diesel stocks at OCGT stations … ensuring these resources are available to support the system during the following business week,” it told us in an email last month.

In the week leading up to 2025’s first bout of loadshedding, the OCGTs had been running for up to eight hours a day. “As a result, diesel stocks … were depleted more rapidly than they could be replenished.”

But records suggest Eskom’s new diesel suppliers were also struggling to keep up with demand: when running hard, Ankerlig needs at least 100 trucks a day to keep its storage tanks full; records suggest that on average only 50 had arrived each day.

And worse was about to come.

Stage 6 loadshedding

By Sunday 23 February, Eskom’s Megawatt Park boardroom was on a knife edge. Several units at the coal-fired power stations had gone down overnight and Eskom had been forced to implement stage 6 out of the blue.

As Bheki Nxumalo, the head of generation warned, Eskom was now also running out of diesel at Ankerlig: “Chair … obviously we’re not happy,” Nxumalo said, addressing Monde Bala, the chair of Eskom’s Emergency Response Command Centre (ERCC), the high-level body that Eskom convened when loadshedding threatens to destabilise the grid.

The problem, Nxumalo explained, was that Eskom’s new diesel suppliers weren’t delivering diesel to Ankerlig fast enough: “[N]ormally we should be able to get just over 100 trucks … these companies that we’ve got, they are just not… although [we] are putting them under pressure, but they are not cutting [it].”

The exchange is captured in minutes from the ERCC’s board meeting, where Nxumalo is seemingly referred to by his clan name Zwide.

Records suggest that Eskom’s new suppliers had delivered, on average, 70 truckloads of diesel a day in the lead up to stage 6 loadshedding, well short of the 100 truckloads needed.

“[T]hese current contractors are just not performing at the levels that we want to see… It’s just too slow,” Nxumalo concluded.

Earlier that day, energy minister Kgosientsho Ramokgopa had held a press conference to apologise to the nation: “We suffered the setback on the 1st of February after over 300 days of consecutive supply of electricity in an uninterrupted fashion. And again, now, we’re coming back to you where we have another bout of loadshedding and now the intensity is much greater.

“The levels of agitation, the level of anger, the levels of disappointment are understood … we regret this setback in the same manner that we regretted the setback that was registered on the 1st of February,” he said.

When Marokane got up to speak, he had singled out the supply of diesel to Ankerlig: “[T]his week is very important – the first three days are quite crucial … As I said, it’s also important that as we recover units, we also build in margins for the recovery of the reserve, specifically the fuel at Ankerlig.”

That night, at the ERCC meeting, Bala had noted: “Just on the final side, you guys have pretty much depleted all the diesel.” It was less a question than a statement, and records we’ve seen suggest that Ankerlig’s tank levels were by then dangerously low.

On Monday 24 February – with stage 3 loadshedding still in place – Eskom switched off Ankerlig again. The diesel suppliers at Ankerlig hadn’t caused loadshedding, but in the middle of a crisis they had made it worse.

The money floodgates open

Records show that between February and April 2025, Eskom made 15 prepayments – collectively worth R2.97-billion. AmaBhungane understands that senior Eskom officials have defended the payments – recorded as “downpayments” on the SAP system – as necessary to keep the lights on.

During the ERCC meeting on 23 February, Eskom CFO Caleb Cassim had said: “The issue is not finances; it’s just the logistics. So [Nxumalo] knows what’s required. If he needs me to approve anything, I approve it immediately.”

Yet records suggest that the prepayments were ineffective: by the time stage 6 loadshedding hit on 23 February, Eskom had made three prepayments in a bid to secure an additional 20 million litres of diesel, yet Ankerlig had still been forced to go offline.

In the days that followed, Eskom made some of its most lavish prepayments: on Tuesday 25 February, Severino received a prepayment of R374-million (20 million litres) and two days later, it received another of R473-million (25 million litres).

Severino, an obscure company owned by a 25-year-old recent graduate, would ultimately receive eight prepayments totalling R1.37-billion.

[WATCH] Meet Minnie Mavuso

On 7 March 2025 – in a pattern that was now becoming predictable – loadshedding struck again, and as tank levels plunged, Ankerlig was switched off.

To Severino’s credit, it had delivered 340 truckloads of diesel (13.7 million litres) since receiving R815-million in prepayments. Yet this was still not enough to keep Ankerlig’s tanks full.

Did the diesel exist?

What Eskom will not explain is why it placed such massive orders – 45 million litres over two days – when it knew that Severino only had access to 10 million litres of storage.

When the tender was advertised it was explicit that Eskom would only pay suppliers after fuel had been delivered into their tanks. Bidders also had to show that they had rented the tank for the entire five years of the contract.

Yet, after the contract was awarded, Eskom had let this slide for some of the suppliers: Nutinox had received its first order without a dedicated tank (it later secured one at PetroSA’s Montague Gardens tank farm), while Lanele offered to provide Eskom with access to free storage through various agreements.

“We … had an enterprise development partnership with Astron which … gave us access to Astron storage,” Mtshali, the Lanele CEO, told us when we interviewed him in April. “[W]e then started adding a second terminal which was Burgan Cape Terminal, under Vesquin, and it was primarily because we were getting a storage arrangement without having to incur costs.”

This arrangement would save Eskom money – it was paying Nutinox R1.2-million a month for five million litres of storage and Severino R2.3-million for 10 million litres – but it also gave Eskom less visibility over millions of litres of fuel it had paid for and recorded as “received” on its books.

By August 2025, records suggest that Eskom had “received” and paid for 299 million litres of diesel, but only 212 million had been delivered by truck to Ankerlig, leaving another 86 million litres of fuel – Eskom assets worth R1.6-billion – supposedly scattered across an unknown number of private storage tanks.

By the end of June 2026, roughly 40 million litres (currently worth R1-billion) was still outstanding, almost all of it from Lanele.

But was the fuel actually there?

Hunting for Eskom’s fuel

The reason that Eskom’s investigators ended up at the gates of the Burgan Terminal last month was that the numbers did not make sense. 

Eskom records are explicit that Lanele’s last two orders – both for 20 million litres of diesel – had been “received” at the Burgan Terminal on 3 and 15 July 2025. The terminal can store 125 million litres of fuel but it is also a major import hub for fuel for the Western Cape.

Mtshali had told us that Lanele had negotiated a deal to store fuel at Burgan free of charge: “So initially Burgan, they wanted to charge us for storage. The initial deal recap included a storage line in there. We pushed back … we were able to land a solution at least for one year which did not include us having to pay for storage.”

But was it realistic to imagine that Burgan’s owners, VTTI, had allowed Eskom to hog a third of its storage for a year completely free of charge, as Mtshali had implied?

VTTI is entitled to charge 34c per litre for Burgan’s storage – a tariff set by the National Energy Regulator of South Africa (Nersa). Over 12 months, 40 million litres of storage space could generate R164-million in revenue and there was no way VTTI – which is part-owned by Vitol – had given that away for free.

Why did Eskom prepay R721-million?

The emails we received from VTTI, Vitol and Vesquin make it clear that Lanele had negotiated a very different deal: Vesquin had agreed to keep five million litres of diesel in a comingled tank at Burgan Terminal, earmarked for Eskom.

“Lanele has contracted with Vesquin to supply its emergency diesel commitments to Eskom. Vesquin, which benefits from its shareholder Vitol’s robust supply network, will deliver the outstanding balance of diesel when it is required,” director Harvey Foster told us. “70% of the contracted diesel has already been supplied and, for the duration of the contract, 5 million litres or their remaining balance will remain in-tank at Burgan earmarked for ultimate supply to Eskom to ensure supply is immediately available.”

Lanele’s contract with Eskom could have accommodated this back-to-back supply agreement with Vesquin, although it raises questions about what the point of Lanele was, when Vesquin itself had the level 3 B-BBEE status that the tender required.

Instead, what makes the deal “unheard of” – as one industry source described it – is that Eskom seemingly agreed to prepay Lanele R721-million a year ago for fuel that is yet to materialise.

When we spoke to Mtshali in April, he denied that Lanele received any prepayments: “Lanele had to first secure fuel for Eskom in tank prior to Eskom payment,” he insisted.

In its press release at the end of July, Eskom had described the 40 million litres as “delivered or available”. Last week, Eskom clarified: “Available in this context means diesel that was procured and stored offsite and available on scheduled request.”

Both the tender and the contract had been clear that Eskom would only pay for diesel that had actually been delivered, not just promised.

If Eskom paid Lanele, believing that the full 40 million litres of diesel was sitting in storage tanks just down the road from Ankerlig, there is a word for that: fraud.

If Eskom officials knew they were buying nothing more than an IOU, then they will need to explain to investigators why it was necessary to prepay R721-million for diesel that, a year later, is yet to materialise.

The flood of prepayments we’ve described was supposedly authorised because of Eskom’s loadshedding crisis, yet what we’ve uncovered so far suggests that explanation does not entirely add up.

Where is the forensic report?

Eskom has spent an extraordinary amount of time investigating the diesel contracts it signed in December 2024.

In March last year, it appointed Itsamaya Holdings on an emergency contract to investigate wide-ranging “allegations of priority economic crimes” at Eskom.

“There is a threat of major consequential expense to Eskom. There is a threat of serious damage to Eskom’s reputation. Therefore, early delivery is critical,” Eskom had told National Treasury to explain why Itsamaya’s R37.7-million contract had been awarded without a tender.

In August last year, investigators were asked to look at the Eskom diesel tender as well.

But a year later, Eskom keeps pushing back the deadline to finalise the investigation: “On assessment of the findings of the investigation report, it became apparent that further document analysis and interpretation, supplementary interviews and consideration of identified legal aspects of the management of contracts were required to test the legal soundness,” it said at the end of July.

We asked energy minister Kgosientsho Ramokgopa if he had seen the report.

“The Minister has not yet received the final report,” his spokesperson, Tsakane Khambane, told us earlier this month. “Eskom has advised that the report remains subject to governance, legal review and quality assurance processes to ensure that any findings can support appropriate disciplinary, civil or criminal action. The Ministry is actively monitoring the matter and has requested a comprehensive briefing as soon as these processes are concluded.”

Wasn’t he concerned that Eskom was being allowed to review and potentially alter the findings of a report that could implicate senior people in Eskom, we asked, a bit like allowing Eskom to mark its own homework?

“The investigation was conducted by an independent forensic firm and there is no indication that Eskom is altering its findings,” Khambane told us. “The current legal and assurance review processes is undertaken by an external legal firm and Senior Counsel … As shareholder, I expect all findings to be acted upon and all implicated parties to be held accountable, regardless of seniority.”

The report, when it is finally released, is likely to be embarrassing for Eskom.

Since Dan Marokane took over as CEO in March 2024, Eskom has undergone a stunning turnaround: last month, the energy availability factor – a measure of how the power plants are performing – reached 82 percent.

More importantly, Eskom has not had loadshedding since May 2025. If it turns out that in the background, Eskom was making billions of rands in irregular prepayments, it’ll dim the light of that achievement.

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Six months down the line, the regulator told us that this transaction is “still under investigation” – despite the applicant (Bet777), as we will show, raising countless red flags around possible fraud and money laundering that should have made for an obvious rejection.

If nothing else, what follows shows us that South Africa’s burgeoning online gambling industry can very likely be a honeypot for bad actors.

The regulator has been dishing out licenses despite mounting concerns about the social and economic impact of the country’s snowballing gambling epidemic.

It is hard to gauge the full extent of this because that regulator refuses to even tell us who it has given licenses to.

But with this application authorities risk doing more than paving the way for yet another gaudy online casino exploiting people’s hopes and desperation.

This time the applicant appears to have links to an alleged international syndicate of scamsters who would need one thing in particular: cover for a constant torrent of small payments that may otherwise raise all sorts of flags.

Which is to say, just the kind of thing an online casino is good for.

We know this because the owner of Bet777 is listed as Israeli-South African Maor Yehudai, a man whose 2022 legal battle with banking group Firstrand seemingly inadvertently exposed how he was a cog in an international cryptocurrency trading scam.

In this role, two of his other companies secretly provided a payment system for the crypto and forex “trading” that victims believed they were doing.

But this is just the first layer of the onion.

As it turns out, the Yehudai company secretly supporting the crypto scheme is also part of a multinational network allegedly doing a similar thing. 

In other words, it was part of a network of companies seemingly offering “legitimate” online services that were also allegedly involved in providing infrastructure and payment-processing services to fraudulent investment operations.

(In fact, the system strongly resembles another, also Israel-based, syndicate which amaBhungane, alongside a number of peers around the world, exposed last year and dubbed Scam Empire.)

And although details are scant, Yehudai’s has other odd connections that raise further questions and red flags.

Earlier this year Yehudai emerged as a “consultant” to the attorneys of Joseph Willah Mudolo, an alleged accomplice to the infamous self-proclaimed prophet Sheperd Bushiri.

Bushiri has fled the country but Mudolo remains in South Africa while fighting a running battle for a relaxation of his bail conditions that would allow him to travel to his native Zambia, despite the obvious flight risk.

Mudolo has tried to get the judge presiding over his case to recuse himself. It was in these proceedings that Yehudai emerged as an advisor whose expertise served an unknown function.

The law firm in question, Matojane Malungana Inc, told us it could not divulge any details but confirmed that one of Mudolo’s “erstwhile” attorneys at the firm consulted with Yehudai.

Various attempts to reach Yehudai to put all these allegations to him were unsuccessful.

To understand why Yeduhai running an online casino is a worrying prospect that one would have wanted regulators to block straightaway, we have to start with the way, back in 2022, his banking legal battle revealed his connection to a fraudulent crypto scheme.

The chargebacks

Yehudai used to run at least two South African emigration support websites – GoodAdvise.co.za and express-canada.co.za – that, via a call centre, in the main promised to help people get North American visas.

In court papers Yehudai described the operation as a subsidiary of an unnamed group in Israel which set up in South Africa due to high demand for emigration to the US.

The part about an Israeli parent company was at least true.

As we will see, his websites were part of a conglomerate of similar visa schemes soliciting money from aspirant emigrants to the US all over the world.

This conglomerate has recently come under scrutiny by investigative journalists at Swedish digital rights organization, Qurium, as well as the Australian ABC Story Lab.

Let’s shelve that for now.

The underlying company providing the visa service in South Africa was called MSG Marketing – and it and a sister company both banked with First National Bank (FNB).

In early 2021 FNB raised concerns about “excessive chargebacks” on the local companies’ accounts. A chargeback is when someone who paid money into a recipient account via their own bank requests a refund. This can be for all sorts of reasons, from accidentally paying the wrong person through to suspected fraud.

At Yehudai’s operation these came thick and fast with 117 chargebacks worth R3.8-million racked up in less than a year.

But the real clincher was a single client in Hong Kong called Yos Sae Ma who seemingly made gratuitous use of Yehudai’s company and then followed through with multiple chargeback requests via her Chinese bank.

In May 2021 FNB received an email from transaction processor, Paygate, flagging this client’s worrying use of MSG Marketings “immigration services” – R1.5-million in less than two months using one card and R285 900 using another.

The next day FNB froze Yuhudai’s company’s account and set in motion a court case that would only reach finality last year. The case revolved around the technicalities of when and for what reason a bank can suspend an account based on excessive chargebacks.

Far more interesting is the evidence FNB ended up putting in the court record showing how Yehudai’s business was not what it seemed at all.

The mysterious “evidence”

First off, before the case got off the ground, Yehudai tried to justify Yos’s massive payments and subsequent chargeback requests.

He managed to come up with “proof” that her payments were both legitimate and were in fact for immigration-related services.

Said proof: a photo of a woman holding up a handwritten letter reading:

“I Yos Sae Ma hereby declare that the transactions that I’ve made with card that end [Sic] with 6065 and 9107 were done as part of the Visa process, the large number of the transactions was due to cards limitations”

The letter included an ID card and Yos’s signature.

Later on this “proof” however suffered a severe blow.

FNB was clearly not convinced. A few months later, with a dispute in full swing, it came up with an actual complaint from Yos requesting chargebacks through her bank, China CITIC Bank.

Spoiler alert: it did not involve Visa applications.

Instead, Yos said that her chargeback requests were related to her use of a cryptocurrency trading platform called Gloffix  which, she said, wouldn’t let her withdraw the funds she had deposited unless she would “keep trading”.

This already bears an unmistakable resemblance to schemes we uncovered last year in our Scam Empire reporting.

The information coming to FNB from Hong Kong was very detailed, including transaction records, written statements from Yos as well as an “expert opinion” she seemingly commissioned.

When presented with some of Yos’s information in court Yehudai pivoted somewhat.

“While acknowledging that GLOFFIX is a Turkish company which is associated with [MSG and its associate] and trades in cryptocurrency … [MSG and its associate] confirm that they have never traded in cryptocurrency. However, [MSG and its associate] did assist GLOFFIX to facilitate payments from their clients by the use of [MSG and its associate’s] facilities”.

This would in itself be enough to land Yehudai in serious trouble since MSG Marketing had never applied for a transactional account for the purposes of trading financial products – not a trivial requirement considering the extensive surveillance requirements in the banking industry.

In the court case FNB invoked the rules imposed by bank card behemoth Visa around the declaration of the purpose of accounts.

For the purposes of the FNB case Yehudai conceded that he has been “advised that the applicants ought not have permitted their nominated banking accounts to assist GLOFFIX, but in any event, [reiterated], as stated above, this issue is irrelevant to the issue to be determined in this application”.

That argument turned around the narrow issue of whether FNB was entitled to hold onto his money until the chargeback disputes were settled.

Suffice to say the original case and a subsequent appeal went against Yehudai.

But back to revelations from Hong Kong.

Gloffix

As mentioned, Yos in Hong Kong was in fact not paying for visa services. She was paying money into a cryptocurrency scheme called Gloffix about which little was said at this point except that it was, according to Yehudai, a Turkish company.

Even that wasn’t entirely true, as we’ll see.

Yos’s experience however mirrored the plethora of desperate complaints of victims of the Scam Empire scheme we covered elsewhere.

Apparently she had clicked on a Facebook ad and before long was called up by an operator guiding her into opening a Gloffix account to ostensibly trade financial products. Like many before (and after) her she ended up paying large amounts of money into what seemed like a legitimate trading platform.

She ultimately claimed that the whole thing was a fraud with the interface being essentially a game with no actual trading taking place. Whatever the case, the main issue was that she was not allowed to withdraw her “deposits” hence her attempts to do so via chargebacks instead.

A closer look at her bank statements however revealed that the payments were being processed by a number of obscure merchants – MSG Marketing among them – that had no obvious connection to Gloffix.

After FNB shut down MSG’s accounts in South Africa, Gloffix switched to a handful of alternative payment facilitators.

Notably, Yehudai’s company MSG here already finds itself in august company.

One alternative facilitator Yos’s payment got directed through was the Slovakian Global DLT Exchange which has been identified many times as the payment processor for more than one of the world’s mushrooming “online trading” scams.

Back to Gloffix.

The trading platform had no license to operate in any jurisdiction and has been subject to regulatory alerts in the UK and Spain. The internet is full of review sites where “traders” give accounts of their losses more or less identical to Yos’s.

The platform’s site has now been scrubbed off the internet. The Internet Archive’s Wayback machine however captured the site when it still existed and it provides a crucial clue about who we are dealing with.

Gloffix was, according to its abandoned website, operated by a company in the Marshall Islands called Advantiq.

On the money trail: MSG –> Gloffix –> Advantiq

To sum up, Advantiq was the mystery operator of the alleged scam website Yehudai’s South African “immigration service” was secretly providing transaction services to.

Advantiq may very well be registered in the Marshall Islands but its address was listed in London.

And at that address, an apartment in a desirable part of the city, public records show 25 different companies registered – including some very interesting ones.

For instance, one of them is Sipay Ltd (not to be confused with the Turkish payments company of the same name). This is one of the other merchants used by Gloffix to accept payments alongside MSG Marketing.

Other roommates in the London apartment include a list of unsavoury global operations.

First there is Gloffix itself – or rather the actual underlying company called Gloffix Global Ltd (which has been renamed Neosava International Ltd.)

There are also a number of other online scams that have been flagged and shut down including ones called BalFX, CIO Markets, Hadef Capital, International Fidelity, Kuveyt  (Kuwait)Trader, Money Trade FX, Omnia Markets, Optimum Global Markets, Omnia Markets and Skyline Ecommerce LTD, which was flagged in Austria as a fraudulent “debt collector”.

This collection of companies seems to represent the tip of the iceberg for a whole different scam syndicate with a strong Turkish slant.

So while the corporate entity Gloffix was not registered in Türkiye, Yehudai seems to have been truthful insofar as he was providing back-end transactional support for a network of companies targeting that country.

That’s not very unusual. Our experience with the Scam Empire investigation is that service providers, like payment processors and the providers of telephonic services to the “boiler room” call centres that contact victims, often have more than one master.

Which brings us to the second layer in the onion in which Yehudai operates – or at the very least has operated in.

Welcome to America!

As mentioned, the payment services secretly provided to the crypto scam Gloffix were ostensibly for a visa consulting service consisting of at least two websites targeting South Africans.

Included in the court papers is a letter from Yehudai’s lawyers to FNB in which they claim that the near R4-million in chargebacks FNB had flagged “equate to a fraction of the revenue generated” the immigration service.

Yehudai also makes mention of the “sheer number” of transactions the now-defunct business processed.

It does not look great that his website Goodadvise has been heavily lambasted as a scam in online consumer review forums and subsequently taken down.

But who was Yehudai ultimately working for?

In the court papers he says that MSG had a parent company in Israel, which he did not name, but which provides the same kind of visa services internationally.

Also in the court file is correspondence where Yehudai uses an email address indicating that this Israeli company is in fact Go-Be Marketing, a company co-founded by an Israeli, Shefi Goldberg.

Among Goldberg’s previous ventures was a proposed “immigration” cryptocurrency called Immi-coin. The business plan for this is still available on the internet and gives a sense of the group’s larger footprint.

According to the business plan the Go-Be group has 100 people manning call centres in not only South Africa but also Israel, the Philippines, Cyprus and Spain with access to “a database of over 1 million potential immigration clients”.

Investigative journalists in Sweden and Australia have been on the Israeli company’s trail for a while and enlisted amaBhungane’s help with the South African leg of the larger drama.

In Australia, ABC found the initial indication that Goldberg has a wider involvement in the payment system for online scams. A victim of a fraudulent platform saw their sign-up payment running through a company called Trigo XO.

When ABC’s journalist pursued the putative owner of this company they ended up on a video call where Goldberg joined and said all questions should come to him.

Goldberg later told ABC, “I have no knowledge whatsoever of who this group is or who its clients are.”

On the central allegation that the Goldberg network was involved in processing fraudulent payments for a major scam network, Goldberg said he was “never involved in processing any of such payments” and denied any unlawful conduct.

In a way the kind of business Yehudai allegedly legitimately ran, a call centre giving visa advice, is a great cover for this kind of trading scam because it involves essentially the same back-end infrastructure.

Alternatively, the two “services” overlap and co-exist.

Either way, this brings us back to where we started: Maor Yehudai’s entry into the regulated South African gambling industry via a brand-new licence applicant called Bet777.

Hiding in plain sight

The resemblance between online gambling and, for instance, something like MSG is obvious.

A legitimate business constantly processing a torrent of small payments would arguably be the perfect hiding place for something like the fraudulent trading platform Gloffix, which had transactions hidden in MSG’s bank accounts.

As South Africa mulls new ways to curb the runaway growth of the online gambling industry the question arises: how are people with Yehudai’s history even getting a foot in the door?

What kind of due diligence actually gets done?

The relevant regulator is the Western Cape Gambling and Racing Board – the single most prolific issuer of licenses in South Africa’s system of provincial gambling regulation.

As mentioned at the outset, the Board has refused to provide amaBhungane with information about who even has been given licenses, indicating a severe lack of transparency.

The WCGRB also told us that Yehudai had in fact declared his court case against FNB although this has clearly not led to his Bet777 being outright denied a license.

The Western Cape Gambling and Racing Act prescribes a “fit and proper person” hurdle which requires that the Board determine that a licensee’s “character, integrity, honesty, prior conduct, regard for the law, reputation, habits and associations do not pose a threat to the health, safety, morals, good order and general welfare of the inhabitants of the Province”.

The Board also says that it has in the past rejected applications but did not say how many or for what specific reasons.

Given the internationally acknowledged association between gambling and financial crime a severe level of interrogation is arguably imperative before someone is allowed to wield a gambling license.

The post Online gambling: Look who’s knocking at the door appeared first on AmaBhungane Centre for Investigative Journalism.

On 20 July Papadopulo, who is now operating from Italy, launched a legal challenge to the search and seizures carried out on 5 May this year at his then-place of work, PRASA’s Umjantshi House in Johannesburg, and at his then-residence in Pretoria.

He has strongly denied any wrongdoing.

The preliminary urgent hearing was set down in the Pretoria High Court yesterday (Thursday) but was postponed by agreement for the full challenge to the searches to be heard on 2 November.

In filing the legal action Papadopulo has disclosed the South African Police Service (SAPS) affidavit used to obtain warrants from two separate magistrates – an affidavit that, in his own words, “places me within a larger organised crime and corruption investigation, whose central figures are said to be Mr Malusi Bool; Mr Ralph Stanfield and Ms Nicole Johnson”.

Booi is the former City of Cape Town mayoral committee member for human settlements and allegations of his corrupt relationship with Stanfield and his wife Johnson are what sparked the current investigation.

Papadopulo’s urgent application sought to seal the evidence seized, which included the contents of his computer and cellphone, pending his main challenge to the legality of the warrants.

Yesterday the urgent application was abandoned following an agreement that the contents are not shared with any third parties.

However Papadopulo’s challenge forced the SAPS investigators to elaborate on their suspicions of his key role in facilitating the inclusion of Stanfield in subcontracting arrangements on PRASA’s multi-billion-rand Cape Town Central Line railway reconstruction project.

In an affidavit opposing Papadopulo’s application, lead investigator Colonel Carel “Callie” Lourens, sketched out the SAPS investigation of the process through which companies associated with Stanfield and Johnson are alleged to have secured contracts through PRASA worth an estimated R60-million.

Lourens stated, “The source of this information, which I will not divulge due to the sensitivity of the information and for the purposes of safety, alleged that Mr. Stanfield’s connection with PRASA is through [Papadopulo] …

“The investigative team and I subsequently investigated these allegations, and the investigation revealed that [Papadopulo] allegedly acted as an intermediary through whom PRASA tenders were obtained by facilitating subcontracting arrangements.”

Lourens reveals that investigators have evidence of at least one direct private meeting between Papadopulo and Stanfield – and that they have a witness who states that Papadopulo personally introduced Johnson as the “social facilitator” responsible for security on the central railway lines in Cape Town.

The evidence bolsters allegations first set out in an amaBhungane exposé in March this year – and throws a critical light on an independent investigation commissioned by PRASA and disclosed to Parliament this week that could not establish “any veracity in the claims made in the article” and concluded they were “speculative and unsubstantiated”.

In his application, Papadopulo stated, “I deny the allegations of wrongdoing made against me, but I do not seek in this application to have this Court decide the merits of those allegations. This is a challenge to the lawfulness of the warrant, not a defence to the criminal charges that may follow.”

Nevertheless, he outlines his defence, arguing he was just carrying out his lawful duties in terms of a signed protocol to rehabilitate the Central Line and relocate communities that had taken up residence on the railway.

“The conduct that the warrant sweeps up – meetings with community leaders, the sharing of contact details, the facilitation of lists of small enterprises and labour, and the pressing for security variation orders – was the mandated operation of the signed, parliamentary-overseen programme I have described …

“The warrant inexplicably captures the whole of that lawful working record as presumptively criminal. It is therefore not properly anchored and reaches far beyond anything the suspected offences could justify.

“Glomix and Yibaninati [Stanfield linked companies mentioned in the warrant] only performed cleaning services and vegetation control sub-contracts via the main PSIRA- registered [the Private Security Industry Regulatory Authority] security contractor being Mzansi Securifire, and not core security work.

“SMME [Small, Medium, and Micro Enterprises] and labour lists were provided by community representatives and ward Councillors after formal briefings and in accordance with the Social Compact and National Development Plan requirements. I at no stage forced and/or allocated any sub-contractors.”

On the search warrant, Papadopulo argues that it was “procured on a fact that was untrue”.

Here he is referring to a claim that he owned the house where he was living, whereas he says it is owned by his aunt.

In addition he claims the warrant is “overbroad and lacking in particularity to the point of operating as a general warrant”.

In its counter, SAPS stands by the search warrants as justified and sufficiently precise.

At the hearing in November both sides will have the opportunity to deal in more detail with the evidence used to obtain the Johannesburg and Pretoria warrants, but it is worth sketching the outlines of what it clearly a sprawling investigation based on many of the same red flags highlighted in the amaBhungane exposé.  

In his opposing affidavit, Lourens sets out the genesis of what led to the SAPS investigation into Papadopulo.

“In February 2023, a CAS case number 1101/03/2023 was registered in Cape Town. Our office received a complaint alleging irregular and corrupt activities purportedly committed by the City of Cape Town’s Mayoral Committee Member (MYCO) of Human Settlements, Malusi Booi.

“The complaint alleged that Mr. Booi received gratification in the form of cash to influence his decisions as a MAYCO member for Human Settlements, with the aim of ensuring that Glomix and other companies associated with Ralph Stanfield and Nicole Johnson were awarded tenders from the City or local government authorities.

“In furtherance of the investigation, the investigation team obtained sworn statements from witnesses, conducted bank statement analysis, and examined seized digital and hard-copy evidence, all of which confirm the unlawful relationship between Malusi Booi, Ralph Stanfield, and his associates. These materials provided prima facie evidence of unlawful relationships involving City and Provincial government officials, as well as other individuals and businesses associated with Mr. Ralph Stanfield.”

Lourens alleges the purpose of the network was to obtain tenders from the Cape Town Human Settlements directorate but also, crucially, from PRASA, the latter targeting security contracts and various subcontracts.

He alleges further investigation revealed that Glomix, whose sole director is Johnson, had a service level agreement (SLA) with one of the main contractors selected to reinstall high-voltage lines and other overhead track equipment, Mpande Business Holdings.

Lourens notes, “According to the information obtained, the SLA stipulates that labourers employed by Mpande are sourced through Glomix, while Glomix supplies the security services responsible for safeguarding Mpande’s work on the railway lines.

“Further, one of the security companies involved is Subtiguard Protection Services, owned by Sedick Petersen, Ms. Johnson’s brother.

“It is alleged that this company initially lacked the required PSIRA [the Private Security Industry Regulatory Authority] accreditation. The PSIRA accreditation was allegedly obtained after the contract had already been awarded.”

Lourens says this contract was “purportedly” facilitated through Papadopulo.

The Lourens affidavit also shows that investigators were able to get human sources to back up some of the claims.

He appears to have testimony from an unnamed person responsible for transporting Papadopulo from the airport to the Pepperclub Hotel on Loop Street in Cape Town.

“The source indicated that… following the instruction of Mr. Ralph Stanfield, he drove [Papadopulo] to the MBT garage-private business premises located in Bishop Lavis where Mr. Stanfield conducts his business. [Papadopulo] attended a private meeting with Mr. Stanfield at this location.”

Lourens states that this information was subsequently corroborated through a subpoena served on the hotel.

The Lourens affidavit also underlines the crucial role of the so-called “three black books” seized in a 2024 raid on Stanfield’s business premises, which appeared to consist of notes of Stanfield’s business dealings and communications – including many references to “Alex” or “the Greek”.

Lourens states that SAPS experts verified the handwriting was Stanfield’s.

He says, “Although not all entries in the black books have been verified, the transactions that have been investigated and confirmed as accurate give rise to a reasonable suspicion and belief that the entries relating to [Papadopulo] are likewise accurate.”

Lourens also reveals that a witness, in a sworn statement, states that he was present at private meetings between Stanfield and Papadopulo during which security contracts for Stanfield-associated companies were discussed.

In addition, Lourens alleges Papadopulo was directly involved in putting forward Johnson as an appropriate facilitator.

“One of the witnesses confirms that they were instructed by Mr. Stanfield in or around September 2022 to attend a meeting with [Papadopulo] and Ms. Johnson at PRASA’s offices in Salt River.

“Additionally, the witness states that [Papadopulo] introduced Ms. Johnson as the Social Facilitator responsible for security on the Central railway lines in Cape Town

“Furthermore, the witness confirms that Mr. Stanfield told him he would not be in attendance, as he and [Papadopulo] had already met privately, during which [Papadopulo] had promised him security contracts on the Central lines of the railway lines in Cape Town and said the meeting would be only a formality.

“This information corroborated the initial witness’s account of the private meetings between Mr. Stanfield and [Papadopulo], as well as the statements obtained from the project managers of PRASA and Transnet RNC [Rail Network Construction] responsible for the project referred to. These statements indicated that the appointment of Ms. Johnson and the security contracts were executed without following a proper procurement process and without their input or consultation as the duly appointed project managers.

“A PRASA employee submitted a sworn statement indicating that [Papadopulo], as head of security, exceeded his authority by attempting to push for the onboarding of a social facilitator, Ms. Johnson, and by forcing the entry into subcontractor contracts to address security aspects on the Central corridor line.”

Elsewhere Lourens alleges that according to “information received” multiple payments were made for Papadopulo’s benefit during 2022 and that access to his devices was necessary to obtain “corroboratory evidence to prove and/or disprove the allegations”.

“So far, the investigation has uncovered that Mzansi Securefire as the main [security] contractor was to go on open market for the submission of quotations for … sub-contracts, yet [Papadopulo] already at this stage had engaged Ralph Stanfield and promised him the contracts for which Mzansi Securefire paid approximately R60-million to Glomix and Yibaninati, both companies being associated with Ralph Stanfield and … Nicole Johnson.”

In his application, Papadopulo accuses SAPS of trying to get the Court to determine the ultimate criminal merits: “That is not the issue in Part A. I do not ask this Court to decide whether I committed any offence, or whether evidence will ultimately be admissible. I seek a narrow, evidence-neutral holding arrangement pending judicial review of the warrants in Part B.”

He also argues that the extensive narrative involving PRASA, City of Cape Town procurement, third parties, alleged associations, hotel and transport arrangements, notebooks, emails and confidential witnesses is impermissibly vague.

“I deny any allegation that I acted unlawfully or corruptly. Much of the narrative is hearsay, conclusion or undisclosed-source material. I cannot meaningfully answer unidentified witnesses or documents not produced. The State respondents deliberately withhold identities and portions of the record while asking the Court to accept the conclusions as established fact.”

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Eleven years later CBM has delivered not one of the seven buses.

Approached for comment, lawyers acting for the company told amaBhungane, “Kindly take note that there is pending litigation between CBM and [DALRRD]… The issues raised in your correspondence form part of the subject matter of the litigation and are therefore sub judice.”

Investigations by the Auditor General of South Africa (AGSA) and by amaBhungane show the bid award process was suspicious, and the execution of the contract, signed on 10 July 2015, was riddled with delays and irregularities.  

Between September 2015 and April 2016, the Department paid out about R26-million of the contract value, despite the fact that the CBM did not adhere to the contractual terms by providing proof of contract insurance.

According to information obtained by amaBhungane it appears that one senior official, Mooketsa Ramasodi, played a central role in the awarding of the contract – and had responsibility for implementing the remedial steps ordered by the AGSA in 2019.

Ramasodi was then the Department’s Deputy Director General for Agricultural Production, Health and Food Safety and now has risen to become Director General.

Ramasodi chaired both the bid specification committee and the bid evaluation committee (BEC), and, an internal report suggests, sat as an ordinary member of the bid adjudication committee too.

The Department disputes this last point.

DoA confirmed his leading role on the bid specification and bid evaluation committees but argued there was “no provision that prohibits participation at both levels”.

However, the Department denied that Ramasodi sat on the final bid adjudication committee.

This claim is contradicted by an internal document in amaBhungane’s possession that the deputy director of internal control signed on 9 July 2024, listing Ramasodi’s name on all three committees.

This is backed up by the Department’s own earlier bid committee memorandum.

One person chairing both the specification and evaluation committees while also sitting on adjudication lets that individual shape requirements, judge bids against those requirements, and then help approve the award.

AmaBhungane has noted that the chair of the bid adjudication committee was named as a Mr JB Hlatshwayo.

Jacob Basil Hlatshwayo, the former chief financial officer of the Department, was sentenced to four years in prison in February 2025 in relation to a R10.8-million abalone corruption case dating back to 2017.

But, in fact, the bid adjudication committee was left with little choice by the evaluation committee that Ramasodi chaired: they disqualified all seven other bidders, leaving only CBM still standing.

Collusion?

As early as 2016, the AGSA had raised its own concern about the bid process.

There were eight bids that responded to the invitation by the Department.

Micheal Vermeulen, the director of CBM, submitted one bid on behalf of the company, and interestingly, submitted a second through a joint venture with Phetolo Health Consortium.

The bid evaluation committee, chaired by Ramasodi, was meant to catch that kind of overlap.

But it didn’t.

A July 2019 AGSA report on the bus debacle, which amaBhungane has seen, found Ramasodi and his committee wanting.

“BEC officials did not apply proper due diligence when examining/evaluating bid proposals. Furthermore, the BEC members did not identify instances of possible collusive tendering practices,” the AGSA found.

In the 2019 report the AGSA reproduced a portion of its 2016 report which flagged the fact that Vermeulen submitted two bids: one on behalf of CBM and the other as a joint venture.

The AGSA was of the view that this was “in contravention of paragraph 4 of the Competition Act No. 89 of 1998, which prohibits horizontal practices” – in other words: collusive tendering.

Both bids had carried signed declarations stating that each had been reached independently and without consultation with a competitor.

For this suspected breach, the AGSA recommended that “management should report the possible collusive tendering to the Competition Commission for investigation”.

In 2016, the Department disagreed with the finding, saying “there was nothing wrong” with the parallel bids.

It noted that no Treasury Instruction or Regulation provided guidance to departments on the process to be followed where possible bid collusion might be detected.

Nevertheless, it promised to report the matter to the Competition Commission.

In the 2019 report the AGSA noted that the matter was indeed reported by the Department in 2016, however no response was received: “Evidence could not be provided [by DoA] with regard to follow-ups being made with the Competition Commission.”

Seven years later, amaBhungane checked with the Competition Commission directly.

It told us it had no record of any such complaint.

Eventually, the tender went to CBM alone.

The seven specially outfitted buses, weighing between 28 and 32 tonnes, were supposed to be delivered to seven provinces.

However, more than a decade later, there is nothing to show for it – and the department has limited recourse because it did not ensure compliance with one of the most basic terms of the contract.

No valid insurance

Because the contract covered specialist goods, the Department could pay CBM in parts before delivery, provided one of three conditions was met:

●  A 50 percent upfront payment backed by a bank guarantee; or

●  Part payment against invoices backed by valid comprehensive insurance covering the full bid value, or;

●  Payment once functional trucks were delivered.

These conditions were inserted so that the public money could be safeguarded in case CBM went rogue or any unforeseeable delays emerged. CBM met none of the three conditions.

No bank guarantee.

No insurance.

No functional trucks.

The Department paid upfront anyway. It appears as if the infringement, at least from the side of the Department, was quite deliberate. They did not pay once, but five times over.

The first infringement was an R8-million payment on 25 September 2015, followed by two tranches of R3-million, paid on 5 October and 25 November 2015, respectively.

From what we could deduce from the R8-million payment, CBM bought seven trucks from Mercedes Benz.

Mercedes-Benz South Africa no longer owns the commercial vehicle business. We were referred to Daimler Truck Southern Africa Limited.

Daimler Truck did not respond to amaBhungane’s questions about whether it received the R8-million payment for the trucks.

The other two tranches were earmarked for the mobile clinic body and for the chassis extension, wheelbase, and rear overhang.

The Department did not stop there. They went on to pay another R8-million invoiced for scientific medical equipment in February 2016 and R3-million for body panels that April.

In total, the Department paid CBM a total of R26 854 411, without ever confirming the roughly R31-million valid insurance the deal required.

Meanwhile, in the words of the 2024 internal report, “The project faced significant delays and extensions, culminating in legal action and repeated failures to deliver the trucks. Despite court orders and extensions, the supplier struggled with cash flow issues, leading to further delays.

“The contract’s extensions and performance monitoring lacked proper oversight. The supplier’s non-performance and contract breaches should have resulted in penalties or contract termination. However, these measures were not invoked.”

The Department simply went through the motions. In 2016 it instituted a high court action to compel the supplier to perform, but the summons was never delivered.

The excuse? The supplier had moved and could not be found at the address known to the Department.

The AGSA noted dryly: “The new premises… were known to some employees of the department. It is unclear why the summons was therefore not sent to the new premises of the service provider.”

2019: The AGSA draws a line

On 10 July 2019, the AGSA and two Department officials met with CBM to understand why the company repeatedly failed to deliver on its promises, despite the half-built vehicles and equipment sitting at their premises.

The company told them that it had struggled with cashflow almost from the start of the contract and had failed to secure finance from local banks.

“The service provider (CBM) is due to travel to China over the weekend in a bid to persuade a Chinese foreign investor to inject finance into the business in order to rescue the company,” the AGSA added.

Asked when the trucks would be delivered, the company said that depended on whether the finance came through (it never did).

The AGSA warned about what could follow: “There is a high risk of the service provider being liquidated resulting in the trucks and the medical equipment being attached to settle creditors and the department suffering losses for the payments made.”

The AGSA made clear findings and recommendations.

“We are of the opinion that payments to the service provider amounting to R26 854 411 paid to the service provider is expenditure that was made in vain and could have been avoided had reasonable care been taken,” the AGSA found.

“The daily and monthly controls in certifying invoices received for payment were inadequate,” the AGSA found, adding that officials “were either negligent or unintentionally approved the payment to the service provider despite the conditions of the contract being met.”

The AGSA told the Department that consequence management should be implemented where payments were inappropriately approved and that it should ensure legal action against the supplier was reinstated.

The official named in the AGSA report as being responsible for implementing corrective action? Ramasodi.

The Department told amaBhungane the project manager who signed off on the payments passed away in May 2016. It also said it has not taken any disciplinary action over how officials processed the payments.

The Department did however institute a new claim against CBM, but as we’ll see, that case has gone nowhere slowly.

No trial date

The Department gave formal warning to CBM in January 2020 and filed a fresh summons that August, finally served on CBM in October 2020.

Interestingly, the company argued in court that it did not deliver the buses because the Department owed about R1.76-million for a maintenance plan invoiced back in August 2016. But this is a stark contradiction as they told AGSA they had financial challenges and had been waiting for a potential investor in China.

The buses should have been delivered by 30 April 2016, and because CBM failed to deliver, it is unclear why they blame the Department for their noncompliance with the contract terms, or even invoiced for maintenance plans of buses the Department had not received.

The State Attorney only applied for a trial date in September 2024, four years after summons was served.

According to the Department’s response to amaBhungane’s questions, a directive from the Judge President had required the parties to first attempt mediation before the case can proceed.

Two years later, there is still no trial date.

The Department told amaBhungane, “It must be noted that the State Attorney attempted to obtain a trial date from the court, however, she was informed that the court directives require that the parties engage in mediation in terms of Rule 41A of the uniform rules of the court before the matter can be set down for hearing.”

The State Attorney then proposed mediation formally. The company agreed in principle. But it asked for broader terms than the State Attorney first offered.

The Department says the State Attorney is now working through its own procurement process to appoint a mediator.

It is clear that if these vehicles ever actually get on the road, they will be more than a decade old before they have travelled a single useful kilometer.

The post Eleven years on, the Department of Agriculture’s R26m mobile vet clinics remain undelivered – and accountability has stalled appeared first on AmaBhungane Centre for Investigative Journalism.

The article originated from AmaBhungane.

I write to place on record my objections to the article, which contains material inaccuracies and mischaracterisations that are prejudicial to my integrity and reputation. My concerns are set out below.

For context, I have been in possession of the Inspector-General of Intelligence’s (IGI) report since April 2025 and considered its contents in July of the same year.

I obtained and reviewed the IGI’s affidavit on the day the article was published.

I subsequently contacted Mr Sam Sole, one of the authors, to draw his attention to certain inaccuracies. I now set out those concerns formally, as discussed during our telephonic exchange.

The misleading title

The title of the article is misleading. It is not substantiated by the content of the affidavit upon which the article purports to rely.

In particular, the use of the word “drew” carries the implication that I directed the IGI towards some improper or ulterior purpose. It suggests that I involved the IGI in so-called “Crime Intelligence wars.”

I have no knowledge of any such conflicts, and this characterisation is not supported by any fact contained in the IGI’s report or his affidavit. I reject it without qualification.

I note that the Daily Maverick published the same article under a different title, namely: “Intelligence trap: Explosive affidavit exposes how former Police Minister Mchunu neutralised Inspector-General Fogel,” which was subsequently amended to: “Intelligence trap: Explosive affidavit exposes how Inspector General was sidelined.” The substance of the article remained materially unchanged across both publications.

Newsroom Africa thereafter conducted an interview with Mr Orrin Singh, in which he repeated substantially the same claims. This served to disseminate the same inaccuracies to a wider audience.

The alleged link between the IGI investigation and GCI OPS

The article attempts to connect the IGI investigation with the operations of GCI OPS and the disbandment of the PKTT.

This is directly contradicted by the IGI’s own affidavit. At paragraph 78, the IGI elaborates: “On 18 February 2025, I met with General Masemola. I assured him that my investigation was not aimed at probing operational details. I told him that it was limited to evaluating compliance with procurement regulations and verifying the existence of an approved project that required a building to be procured.”

The affidavit therefore makes clear, in the IGI’s own words, that the investigation had no connection to GCI OPS or any other operational matter. It arose from specific allegations of procurement irregularity that surfaced in January 2025, and its scope was confined to that subject.

Any suggestion that the investigation formed part of “Crime Intelligence wars” is a fabrication unsupported by the very affidavit upon which the article relies.

The statutory basis for the referral and what the affidavit actually states

The characterisation of my conduct as having “drawn” or directed the IGI into so-called “wars” deliberately avoids the correct statutory terminology.

The applicable legislation provides that the President or a Minister may refer matters to the IGI for investigation. That is precisely what occurred.

Critically, the IGI’s own affidavit confirms this. At paragraph 75, the IGI states: “My investigation into Crime Intelligence’s procurement of propertieswas initiated by the referral to me by then Minister of Police, Senzo

Mchunu, in terms of section 7(7)(c) of the Oversight Act. Section 7(7)(c) provides that the Inspector General may perform all functions designated to him by the President or any Minister responsible for an intelligence service.”

The IGI therefore characterises the referral as a lawful exercise of statutory authority. He did not view the referral as him being “drawn” into any conflict.

The facts are accordingly straightforward. Allegations of irregularity surfaced and I referred them to the IGI for investigation in terms of section 7(7)(c) of the Oversight Act.

The IGI conducted the investigation and he submitted his report to the Minister of Police on 2 May 2025.

There is no basis for the suggestion by Mr Singh that the IGI was “hoodwinked.” The IGI makes no such suggestion in his affidavit.

Any insinuation that the referral was connected to extraneous matters is without foundation. It is prejudicial to both my reputation and that of the IGI, and it mischaracterises lawful and legitimate work as impropriety.

Contradictions with prior reporting

The article under complaint is inconsistent with the Daily Maverick’s own prior reporting.

On 19 October 2025, the Daily Maverick published an article under the title “Intelligence chief Imtiaz Fazel’s sudden suspension – between the brown stuff and the fan.”

The following passages from that earlier article are instructive:

“Mchunu admitted earlier to the committee that he had requested Fazel to investigate whistle-blower and former SAPS clerk Patricia Mashale, who deployed social media to make claims of corruption against the SAPS.

“Now only the Investigating Directorate Against Corruption remains standing as the last Praetorian guard capable of moving through the quagmire of police criminality and corruption and taking action…

“On Wednesday, [MP Dianne] Kohler-Barnard noted with regard to the suspension of the Inspector General of Intelligence, that ‘when those who are meant to root out corruption become the targets of complaints and suspensions, it is clear there is far more to this situation than meets the eye.”

There is absolutely no link whatsoever. The investigation was strictly based on allegations as they surfaced in January 2025 around the purchase of property by CI in the SAPS, and that’s exactly what it is.

The claim that no criminal recommendations were made

The article further asserts that the IGI’s report contained no recommendations: “Contrary to what was later reported, it does not appear that the IGI recommended criminal charges against Khumalo and Masemola.”

This is contradicted by the Daily Maverick’s own publication of 19 October 2025, which stated:

“Previously, the ad hoc committee heard that Fazel had recommended the disciplining and criminal charging of National Commissioner Fannie Masemola and Crime Intelligence head, Lieutenant General Dumisani Khumalo, over the use of R120-million from the Crime Intelligence slush fund to buy property.”

The Daily Maverick was therefore aware of these recommendations, and its present article is irreconcilable with its own prior reporting.

Conclusion

The foregoing demonstrates that the article contains material inaccuracies which are not supported by the very affidavit upon which it purports to rely.

On the contrary, a proper reading of the IGI’s affidavit confirms that the referral was a lawful exercise of statutory authority under section 7(7)(c) of the Oversight Act and the IGI accepted and conducted the investigation.

The article’s characterisation of events is accordingly irreconcilable with the source material it cites. The article is further contradicted by the Daily Maverick’s own prior publications, as demonstrated above.

I reserve all my rights, including the right to supplement this complaint and to take such further steps as may be necessary to protect my integrity and reputation.

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