Nako Energy claims it is owed R606-million for unleaded petrol it delivered in Mossel Bay in June 2024 – fuel that PetroSA accepted but failed to pay for. A year later, PetroSA signed an acknowledgement of debt, and when it failed to pay, Nako asked the court to put the troubled state-owned entity into liquidation.

But the story is not quite that simple, as PetroSA’s acting CEO Nombulelo Tyandela pointed out in an affidavit filed this week.

Yes, PetroSA owes Nako R606-million, but in return Nako owes PetroSA R833-million, after it bought a cargo of diesel in Durban and also failed to pay. And if the two debts are offset, Nako would have to put R227-million on the table.

“[PetroSA] disputes that it is indebted to [Nako] in any amount… [Nako] seeks the final winding up of a state-owned company on the basis of a debt acknowledged by [PetroSA] which was substantially exceeded by [Nako’s] own written acknowledged debt…” Tyandela told the court in an affidavit signed on Tuesday.

PetroSA also accuses Nako of trying to bully it into a settlement: “[Nako] has launched this liquidation application in terrorem” – by way of threat – “in an attempt … to compel [PetroSA] to make payment in circumstances where it is [Nako] rather than [PetroSA] that is owing monies … As these proceedings have been brought in terrorem, I respectfully submit that costs should be awarded against [Nako].”

PetroSA recently disclosed that it fought off another attempt to liquidate it after one of its fuel suppliers, Gunvor, threatened court action over PetroSA’s failure to pay a R796-million debt.

Yet the case brought by Nako is more personal: Nako’s CEO Nqobani Mkhwanazi was until recently considered by some to be a trusted advisor to PetroSA, and the papers filed this week suggest that PetroSA bent over backwards to push deals in Nako’s direction.

In December, even after receiving lawyer’s letters demanding it pay the Nako debt, PetroSA awarded Nako a three-month contract to supply it with diesel in Durban.

Now, however the gloves are off: “Now that [Nako] has initiated winding-up proceedings against [PetroSA], [we] will consider and take such steps as are necessary to recover the [R833-million] owing by [Nako] to [PetroSA],” Tyandela wrote.

Chemically-laced fuel

PetroSA’s R606-million debt stems from a controversial deal signed in 2023 to secure unleaded petrol to sell to the various petrol stations Garden Route.

Nako had offered to supply PetroSA with a new kind of unleaded petrol from a supplier in the United Arab Emirates at a generous discount, but failed to mention that the fuel contained a chemical additive – N-methylaniline (NMA) – which is banned in several countries.

After customers complained that the fuel left stains on the paintwork of their cars, Total, Caltex, Shell and Engen refused to buy any more fuel from PetroSA and the deal stalled.  

Publicly, PetroSA has maintained that there was nothing wrong with the fuel Nako supplied. In an April 2024 interview with SABC, then COO Sesakho Magadla said: “[T]here has been no concerns with regards to the quality itself in terms of the [fuel] but what we’ve seen is … a general concern on the staining.”

She added: “Even though we know that we are selling [fuel] that is compliant to the specification we have embarked … on an independent investigation … from the preliminary investigation there is no conclusive evidence that indicates that this concern that is raised by motorist could be isolated to the [fuel] that is sold by PetroSA.”

Yet in the papers PetroSA filed this week, Tyandela conceded that there were concerns about the quality of Nako’s fuel: “[PetroSA] experienced challenges to place this product in the market arising from complaints received disputed on the quality of the ULP95 gasoline that had been delivered by [Nako],” she wrote, crossing out the word “disputed”.

Tests on Nako’s fuel had found high levels of NMA – which likely caused the staining – and, in some cases, high levels of gum which can damage car engines.

In the court papers, Tyandela included a letter she wrote to Nako’s chair, Nkosinathi Ngwenya, in May last year, describing how the Nako deal had cost PetroSA its share of the unleaded petrol market in the Garden Route and damaged its reputation in the industry:

“Due to the numerous negotiations and challenges surrounding the quality of the ULP 95, PetroSA experienced significant challenges from [the] oil industry and commercial customers to sell the above-mentioned cargo. These include customer complaints from end users as well as [the] oil industry not [being] willing to accept the product.

“These incidents have adversely affected PetroSA as [a] reliable and credible supplier of high-quality products such that PetroSA’s reputation amongst its peers is impaired. This has directly impacted the downstream value chain of the business materially with regards to the supply of ULP,” she added.

Internal PetroSA documents suggest that PetroSA has struggled to sell the last cargo of NMA-laced fuel that received from Nako with more than half the fuel still sitting in PetroSA’s tanks a year later. This, in turn, has left PetroSA short of cash to pay Nako.

Yet PetroSA’s legal team has not gone so far as to ask the court to invalidate Nako’s unleaded petrol deal and set aside the R606-million debt altogether.

Instead, Tyandela has asked the court to find that the two debts should be offset: “[PetroSA] has a liquidated counterclaim against [Nako] that far exceeds [Nako’s] claim against [PetroSA]. I respectfully submit that in such circumstances the court should exercise its discretion in declining to wind up [PetroSA].”

Bending over backwards for Nako

What emerges inadvertently from the court papers is how accommodating PetroSA has been towards a partner that, according to a 2025 internal PetroSA investigation, had contributed towards “financial losses, reputational damage and loss of customers” for PetroSA.

In May last year, after Tyandela’s “impaired reputation” letter, PetroSA negotiated a settlement with Nako.

At the time, Nako wanted to claim R904-million from PetroSA: R484-million for unpaid fuel, plus R81-million for interest, R167-million for finance costs, and R172-million for demurrage, which are the costs a ship incurs when it must wait offshore.

The final figures on the acknowledgement of debts (AODs), signed on 19 May 2025, was that PetroSA would pay Nako R606-million while Nako would pay PetroSA R833-million.

A line at the end of both AODs added: “The payment for the abovementioned amount will be subject to [a] payment plan that will be developed and agreed upon by both parties not later than 31^st May 2025.”

According to both Nako and PetroSA, that payment plan was never signed.

• Correction: in our original report, we said the payment plan was signed. We have updated the story to reflect this.

Instead, we have now established that a draft payment plan was negotiated whereby Nako would be allowed to fulfil the last 11 months of the unleaded petrol deal and use the profits to repay PetroSA.

The 11 shipments of fuel would cost PetroSA roughly R7.4-billon, and would be high risk considering that, according to Tyandela, the Nako deal had torpedoed its market share and left PetroSA’s customers weary of buying its product.

An email attached to the court papers, shows that Nako had lined up new suppliers: “[W]e would like to know when we can commence with ULP deliveries as part of the payment plan and serving out the balance of our contract,” Ngwenya, Nako’s chair, wrote in July 2025.

But before the payment plan could be finalised, Nako’s own creditors came knocking.

In August last year, lawyers acting for Plane Tree Capital – a Sandton-based trade finance company – informed Tyandela that Plane Tree now owned Nako’s debt book, including the R606-million acknowledgement of debt that she had recently signed.

Plane Tree had put up the cash for Nako to buy fuel from the suppliers in the UAE. When PetroSA failed to pay Nako, Nako failed to pay Plane Tree, and in terms of the loan agreement, Plane Tree inherited the claim.

“Our client hereby demands immediate payment… In the event that the demand is not complied with, we will refer to our client for instructions on the institution of appropriate proceedings,” the lawyers wrote in the August 2025 letter.

At this point, PetroSA was entitled to issue its own letter of demand to Nako, pointing out that if the negotiations were off, PetroSA was entitled to claim the R833-million it was owed.

Yet inexplicably, PetroSA chose to stay in business with Nako.

“Since the conclusion of the settlement in May 2025, [PetroSA] has engaged in good faith with [Nako] towards enabling a mechanism by which [Nako] can pay its indebtedness to [PetroSA],” Tyandela told the court.

PetroSA had even agreed to freeze any interest on Nako’s R833-million debt, whereas invoices show that Nako continued billing PetroSA between R5-million and R6-million a month for interest on the R606-million it owed.

In October 2025 – two months after receiving the letter from Plane Tree’s lawyers – PetroSA asked Nako to deliver 15,000 metric tonnes (approximately 20 million litres) of unleaded petrol to Mossel Bay, at an estimate price of R190-million, of which approximately R10-million would be set aside “towards the settlement of the Nako Energy debt,” it added. 

Tellingly, whereas PetroSA’s original 2023 agreement with Nako simply said, “the quality shall meet the specifications of PetroSA Mogas 95 gasoline”, the new order explicitly said that the fuel “should not contain any Methylcyclopentadienyl Manganese Tricarbonyl (MMT/NMA) or any similar octane-enhancing additive or no intentional addition of metallic or AVSR additives”.

In December, despite allegedly a receiving a fresh letter of demand from Plane Tree’s lawyers, PetroSA tapped Nako again, this time to supply diesel to PetroSA through the Island View Terminal in Durban.

“On 31 December 2025, [PetroSA] appointed [Nako] as a fuel supplier for the Durban market, subject… to the finalisation and execution of all relevant commercial agreements… [PetroSA] continued to follow up with [Nako] over the months that followed…” Tyandela told the court, attaching a copy of the appointment letter that then interim CEO Sesakho Magadla had signed.

It was only after Nako approached the court in September to place PetroSA into liquidation, that the state-owned entity reassessed its relationship: “Now that [Nako] has initiated winding-up proceedings against [PetroSA], [we] will consider and take such steps as are necessary to recover the [R833-million],” Tyandela had written.

Although there’s still no indication that PetroSA has sent a letter to demand to Nako, Tyandela has asked the court to treat both claims equally.

“If, as [Nako] contends, [PetroSA’s] acknowledged indebtedness became due and payable in the absence of the contemplated payment plan referred to in the acknowledgement of debt, then the same must follow in respect of [Nako’s] large, acknowledged indebtedness to [PetroSA],” she wrote.

“If, on the other hand, the reciprocal debts were not payable until the contemplated payment plan was agreed, then no debt is presented due by [PetroSA] to [Nako] and the premise upon which [Nako] seeks to have [PetroSA] wound-up falls away. On either footing, the application cannot succeed.”

On the edge of liquidation

For 18-months, seemingly PetroSA did nothing to recover the R833-million that it was owed by Nako, even as PetroSA’s own creditors have been circling.

Last month, Tyandela told Parliament that PetroSA had narrowly avoided a liquidation application from Gunvor, the Swiss commodities giant, who was owed R796-million.

“Gunvor indicated its intention to institute liquidation proceedings against PetroSA in May 2026. The debt was settled in full in August 2026, excluding interest. R639 million of the settlement amount was funded through a shareholder loan. The remaining balance of R157 million was funded and paid by PetroSA from its available cash resources,” PetroSA’s presentation read.

An internal document suggests that PetroSA owes another R747-million to Addax Energy, one of the few fuel traders still willing to do business with them.

But the big behemoth is SARS: PetroSA owes the taxman R5.1-billion – R3.6-billion in unpaid taxes and R1.5-billion in penalties. In its presentation to Parliament, PetroSA revealed that it had asked SARS for a settlement: R200-million would be paid now and R1.3-billion would be paid in instalments over the next three years.

This had resulted in PetroSA being “formally assessed as facing ‘Financial Distress’ due to inability to pay debts as they fall due,” officials told MPs. There was, they added, “heightened legal and financial risk of involuntary liquidation”; “urgent support [is] required to allow the Company to pay debts”.

PetroSA has not said how much money it needs from government to keep its head above water. Our current estimate is that it owes R10-billion to creditors.

Nako’s debt – whether it’s R833-million or only the balance of R227-million – won’t plug that gap, but considering that Magadla once said, in response to an internal audit report, that PetroSA “was even battling to cut grass on the basis of financial strain”, it wouldn’t be a bad place to start.

The post Analysis: Gloves come off between PetroSA and ex-partner appeared first on AmaBhungane Centre for Investigative Journalism.

NICOC (the National Intelligence Coordinating Committee) is a body that integrates all the country’s intelligence structures, comprising Crime Intelligence, the State Security Agency, Defence Intelligence and the Intelligence Coordinator (Sifolo).

In a stand for open justice, amaBhungane, News24 and Daily Maverick opposed the blanket secrecy approach that  Sifolo presented to the commission, as outlined by the evidence leaders in their application for his evidence to be heard entirely in camera.

In August amaBhungane reported on NICOC’s alleged involvement in “permanently revoking” the security clearance of the country’s spy watchdog, Imtiaz Fazel.

NICOC advises the President and the Cabinet on national strategic intelligence to pre-empt threats and safeguard constitutional order.

Sifolo’s testimony is central in understanding to what extent parts of our intelligence structures have been captured or infiltrated by criminal organisations.

It is also crucial to disclosing what the intelligence services knew and reported about it and what was done in response – in other words to what extent they did their job.

Arguing on behalf of the Commission’s evidence leaders, Adv Matthew Chaskalson said Sifolo’s evidence would cover sensitive intelligence matters, justifying why it would need to be heard in secret.

“This includes four National Intelligence Estimates issued from 2022 to 2025, 11 NICOC Intelligence Briefs [and a] a Special Report issued  January to July 2025, dealing with infiltration of the criminal justice system by organised crime syndicates.”

Chaskalson said Sifolo’s 25-page statement and 536-page exhibit bundle, as well as some additional documents had “been declassified for the limited purpose of their use by the Commission” and “not … for general publication or public dissemination”.

He argued that the Commission doesn’t have the power to override the classification regime imposed by Sifolo in order to make any of the evidence available for public consumption.

In an argument that appeared to find favour with the Commission chair, he said only a high court could vary the secrecy imposed by the classification of the documents. 

He said the only options were for the Commission or media to approach the High Court to make an application for this purpose.

But he suggested that this process could delay the commission, interfere with its scheduled witnesses and would see it regress from its core function.

The other option, according to Chaskalson, was for the Commission to refuse to hear Sifolo’s evidence in camera, which would mean that commissioners would not be able to question him at all about the classified information contained in his statement – which would be self-defeating.

Representing the media, Adv Ben Winks argued that in the democratic constitutional era secrecy must be justified, not assumed simply on the say so of an official.

Winks argued that, in effect, Sifolo was refusing to testify, except on his own terms – and that the mere classification of documents did not grant him immunity from having to justify that parts of the evidence should be heard in camera – as other witnesses have done. 

Crucially, Winks added that there is no Act or Law in the country that properly governs the classification/declassification of confidential documents, other than the Minimum Information Security Standards (MISS), which he said was effectively a rule book for government and not anchored in any statute.

Chaskalson disputed this.

With regard to approaching the High Court for declassification of the record of Sifolo’s evidence, Winks said it wasn’t realistic and could take up to four years for such a process to be finalized.

Justice Madlanga suggested that at the very least, Sifolo should explain himself and provide a more comprehensive view on the issue in which there might be a public affidavit and a confidential one. 

Winks made it clear that the media was not arguing for blanket openness, but for some more limited secrecy regime that allowed the public to have insight into what was a core subject of the Commission.

Winks presented following less restrictive alternatives:

• Sifolo’s evidence be heard in public, save for passages that cannot be given without disclosing the contents of material that the evidence leaders have specifically identified as security sensitive.

• Names of operatives and persons of interest, and dates and places of specific operations still relevant to ongoing matters, be redacted and replaced by codenames to be used in oral evidence.

Chaskalson on other hand argued the Commission was not empowered to dictate terms to Sifolo – and his evidence was so bound up with classified material that nothing useful could be separated for public consumption.

For now, Justice Madlanga will mull over the key points presented today before he delivers his ruling, which is expected to be done electronically.

The post Openness or secrecy: media and evidence leaders square off at Madlanga appeared first on AmaBhungane Centre for Investigative Journalism.

The case, which is geared to be one of the biggest underworld prosecutions in the province to date, is set to go on for months with dozens of witnesses expected to testify both for the State and, in defence, for the notorious couple.

The duo’s appearance before Judge Babalwa Mantame is as a result of a nearly four-year criminal investigation into the machinations of the couple’s alleged criminal empire, whose tentacles, amaBhungane has previously shown, have entangled both the private sector and government, and helped make the two both wealthy, powerful and popular.

The stakes in the fight against organised crime could not be higher.

Already several key state witnesses have been murdered and left seriously injured, with others reportedly intimidated into not testifying for the State.

In October 2022, Western Cape judge Daniel Thulare in a separate case relating to the 28s gang, delivered a scathing judgment on its power and reach, warning how “evidence suggests that senior management of the SAPS in the province has been penetrated to the extent that the 28 gang has access to the table where the provincial commissioner of the SAPS in the Western Cape sits with his senior managers … .”

His judgment highlights the pressure and difficulties both police and prosecutors have faced in getting this case ready for trial.

The State is now entering a decisive stage in its efforts to finally put Stanfield and Johnson behind bars and to deal a crippling blow to their alleged criminal empire.

History however shows that when it comes to the successful prosecution of Stanfield, whose self-given moniker is “the Baron”, the odds are not on prosecutors’ side.

The odds

This week will be the umpteenth time that couple appear in court to face a litany of criminal charges, which the State has to date failed to make stick.

By 2007, Stanfield had already been acquitted of committing five murders, including of three children, one of whom was aged two, and arson.

Since 2014, when he and Johnson were first arrested in the wider dragnet of the now-infamous guns-to-gangs case, the couple has continued to slip from the clutches of the law.

In that, now defunct, case they were charged with fraud and corruption under the Prevention and Combating of Corrupt Activities Act and the Firearms Control Act for allegedly illegally obtaining firearm licences and firearm competency certificates from officers at the SAPS central firearms registry in Pretoria.

Charges were initially laid against them in 2014 only to be withdrawn in 2016, then reinstated in 2018, before they were finally withdrawn in 2024.

In 2017 Stanfield was again acquitted, this time of an alleged assault on a police officer who had raided his mother’s house in Beacon Valley in 2015 while looking for suspects.

In 2025, prosecutors provisionally withdrew fraud and corruption charges against Stanfield and Johnson, along with nine co-accused, including former City of Cape Town member of the mayoral committee for human settlements, Malusi Booi.

They had been arrested in 2024 for fraud and corruption relating to a R1-billion city housing tender scam for the construction of homes in some of the city’s most impoverished areas. The NPA withdrew the charges pending the finalisation of an additional investigation into newfound evidence.

A credible source claims that each failed prosecution has made Stanfield even more powerful.

The current sprawling case had its genesis when Stanfield and Johnson were arrested in September 2023 at their Constantia home for fraud, robbery and car theft.

These charges related to their allegedly stealing of their former driver’s BMW, who they claim skimmed large amounts of cash from Stanfield. The driver, a key witness, was shot in June 2024, while his pregnant wife was shot and seriously injured in July 2025.

That case however quickly morphed into a far more sophisticated and technically difficult racketeering prosecution with the couple and their co-accused now facing 41 charges under the Prevention of Organised Crimes Act (POCA).

The charges include, among others: murder, attempted murder, fraud, money laundering, robbery, possession of unlicensed firearms and ammunition and theft.

Key to the case is a racketeering charge which the State will use to show how Stanfield and Johnson allegedly lead a criminal empire dubbed the Stanfield-Johnson Enterprise, which, through its enforcement grouping known as The Firm, is alleged to have terrorised vast areas of Cape Town.

Racketeering is defined in POCA as planned, ongoing, continuous, or repeated participation in at least two related serious crimes (known as predicate offenses) including murder, fraud, corruption, extortion, theft and money laundering.

Under POCA, it is an offense to receive, manage, or use property derived from a pattern of racketeering activity, or to knowingly participate in or be associated with an enterprise engaging in such a pattern.

To prove their case, prosecutors will have to show how between 2019 and 2023, and disguised within a sprawling network of businesses, Stanfield and Johnson used violence, extortion, corruption and questionable benevolence to build their power and buy loyalty from both government officials and communities.

In a 2023 report, the international think tank the Global Initiative Against Transitional Organised Crime (GI-TOC), sounded a warning that the anti-gang provisions of POCA, which was designed to specifically address criminal gang activity, money laundering and racketeering and help prosecutors gain convictions for gang-related crimes, were “severely underutilised” for [countering] these self-same crimes.

“Over 20 years later, very few gang-related cases have been prosecuted under this legislation [POCA] … The act doesn’t have [special] provisions for gang leaders (bosses or high-ranking members) which results in gang leaders receiving low sentences.”

In the Stanfield-Johnson case the prosecutors’ task will be even more difficult given that the couple have worked hard over the years to portray themselves as victims of malicious persecution, whose only crimes have been their benevolence and use of their community organisations to help the poor find much needed work.

A Valhalla Park resident, speaking on condition of strict anonymity because of security concerns stemming from previous encounters with Stanfield and his family, said while they should be brought to justice, Stanfield’s arrest had led to “mayhem on the [Cape] Flats”.

“After he was jailed all hell broke loose. There are now shootings every day. Gangs are fighting for control of the 28s’ territory. Every day people are dying. Unfortunately, he is the only one who can bring jobs and now peace.”

She warned that the longer Stanfield stayed in prison the more people would die.

“Ralph being free means those who want control [of] our areas will no longer be able to get what they want. At least if he is out it will bring us some sort of peace.”

Some community leaders begrudgingly agree.

“Unfortunately he is the only one who is seen to be able to provide jobs and food,” said a Bishop Lavis CPF member.

“He gives to people what government can’t.”

Stanfield and Johnson’s perceived benevolence is however not without a steep cost itself, with other community leaders fearing what will happen if he and Johnson win their case.

“It will be a lot worse. Him getting out will not stop the violence. Already people who have been helping police have been killed. Their whole aim is to make witnesses too scared to talk.

“They claim they are giving people jobs, but their community organisations are not. All they actually do is use them to get onto tenders, and when there is resistance people get hurt.”

Benevolence or organised crime

The State’s case against Stanfield and Johnson is that they have built their empire on a bedrock of crime and violence, or the threat of violence.

Through their community organisations and businesses they are accused of hijacking and capturing chunks of lucrative government and private sector construction and infrastructure development projects using shakedowns, corruption and murder, crimes which the State believes is the backbone of their enterprise’s operations.

It is this violence which has claimed the lives of people like City of Cape Town housing official Wendy Kloppers, who was shot dead in February 2023 at the city’s Delft Symphony Way housing project site.

She was allegedly murdered by one of Stanfield’s current co-accused, after the city refused to give in to extortion demands from 28s gang members that businesses allegedly linked to the Stanfield-Johnson Enterprise be cut in on the project.

Just a week before Klopper’s murder three construction workers were shot and wounded at the same site.

As with the Delft Symphony Way project, similar incidents of violence occurred during Atterbury Property and Old Mutual Property’s construction of Cape Town’s King Air Industria and during the Passenger Rail Agency of South Africa’s (Prasa) reconstruction of the City of Cape Town’s Central Line – until Stanfield and Johnson associated businesses and community organisations became involved.

On its Central Line project, Prasa, in a presentation to the Parliament’s Standing Committee on Public Accounts, revealed that 1,654 jobs were created through setting aside some protection services for small and micro enterprises as well as via formal community involvement opportunities, with 300 community members involved in clean-ups.

With Stanfield and Johnson seen by many as a stepping stone out of poverty, and their support base strong, the risk from another failed prosecution is deeply worrying.

Now, more than ever, prosecutors must ensure that they deal a final and crippling blow to the Enterprise’s operations.

If they don’t, as Gi-TOC has previously told us, Stanfield’s power will be solidified as he increases his foothold on the ladders of corporate and political access and bounty.

The post Analysis: Cape Town ‘gang boss’ Ralph Stanfield’s courtroom showdown looms  appeared first on AmaBhungane Centre for Investigative Journalism.

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. 

After publication, lawyers for Nicole Johnson reached out to amaBhungane. Their letter stated, “Our clients expressly deny that they knowingly sold petrol or diesel directly to SAPS, or that they personally entered into any contract with SAPS for the supply of fuel in the manner conveyed by the article.

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 risky 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, a new deal 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 AODs 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 31st May 2025.”

This was problematic for PetroSA: it had already signed an “irrevocable and unconditional” undertaking to pay Nako for the shipment of fuel, back in April 2024, which it had attempted to cancel. In return, it would get its money but only through a yet-to-be-negotiated repayment plan.

That proposed deal – which was drafted but never signed – 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, PetroSA’s proposal to get its money back from Nako, involved it first finding R7.4-billion to buy 11 cargoes of fuel, then selling 505 million litres of petrol that likely no one would want to buy.

That deal was never concluded, but PetroSA has nonetheless made no visible attempt to get its money back from Nako. And because Plane Tree now 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 PetroSA finally makes a claim, 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.

[Note: This story was updated after publication to reflect the fact that the repayment plan – involving the 11 cargoes of fuel – was not signed but formed part of a draft settlement agreement.]

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.

The post Eskom paid hundreds of millions for diesel that ‘didn’t exist’ appeared first on AmaBhungane Centre for Investigative Journalism.

The post Daniélle Schaafsma appeared first on AmaBhungane Centre for Investigative Journalism.

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.