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Former top cop Khomotso Phahlane and high-ranking officers in the Crime Intelligence (CI) division were arrested in a series of raids – the fruit of an Investigating Directorate (ID) probe into a R54-million procurement scandal which has spanned years.

Sources close to the investigation told News24 that swoops played out in Durban, Johannesburg, Pretoria, and Gqeberha on Monday night, with the operation stretching into the early hours of the morning.

According to impeccable sources, former national commissioner Phahlane was taken into custody at his home in the plush Sable Hills Estate on Tuesday morning.

Acting head of the Crime Intelligence secret fund, Major-General Obed Nemutanzhela, was arrested at the OR Tambo International Airport while attempting to board a flight to Cape Town.

Colonel Godfrey Mahwayi was arrested in Pretoria.

The last to be placed in handcuffs was Major General Agnes Makhele, head of CI in the Free State, who was arrested in Bloemfontein on Tuesday.

The investigation centres on a procurement scandal from the State capture era, in which the cop spook division manipulated procurement processes for a R54-million splurge on social media monitoring tools and telephone encryption software.

The R33-million purchase of a social media monitoring tool called RIPJAR began in December 2016, using emergency procurement prescripts, with the tool "urgently" needed to address "Fees Must Fall" university protests.

These prescripts are usually used when there is an urgent need – and in this matter – the urgency is undercut by the fact that the Fees Must Fall movement and the protest action around it began a year and a half earlier.

The note-so perfect source

To procure the software, Crime Intelligence obtained two quotations, one from a company named I-View owned by businessman Inbanathan Kistiah, and the second from a firm called Perfect Source Solutions. Perfect Source was a human resources and recruitment company. The sole director of Perfect Source was Gevani Naidoo. Her husband, Avendra, provided the other quote Kistiah needed.

The procurement was driven by Mahwayi, who in his role had no authority for procurement. He sourced the quotations and, within two days, R33-million landed in Kistiah’s bank account, with no contract or agreement in place.

According to investigators from the Independent Police Investigative Directorate (IPID), who first pursued the probe after they were alerted by a whistleblower, could find no evidence that the RIPJAR software was ever delivered.

Several months later, Crime Intelligence looked to I-View and Kistiah to provide phone encryption software called Deadelus for R21-million. Similarly, Mahwayi obtained two quotes from the same two companies, and I-View secured their second windfall.

Both deals bear the hallmarks of cover quoting, a collusive practice where the prices of counter-quotations are inflated to ensure that the deal goes to a predetermined recipient.

Sources within IPID, who could not be named, alleged that the Deadelus system was purchased in order to shield Phahlane from their investigators, who were hot on his heels over a mammoth blue light tender. Phahlane and other top cops face criminal charges for this scheme and are currently before court.

Criminal intelligence

Kistiah and Avendra Naidoo were arrested in Durban and Gqeberha respectively. The former was said to have been boarding a plane, the destination of which could not be independently confirmed.

Kistiah is central in a string of IPID investigations into high-level police corruption which have since been ceded to the ID.

Another dubious deal pushed Kistiah’s way was the purchase of a sophisticated spying device known as a grabber, which can intercept calls and infiltrate cellular phones. I-View was to provide such a device at R45-million, several times more than what it is worth, just days before the African National Congress’s 2017 Nasrec elective conference.

The deal was abandoned after pressure from IPID...

Democratic Alliance (DA) leader John Steenhuisen has proposed that President Cyril Ramaphosa immediately dissolve the National Energy Crisis Committee and appoint in its place an outside industry expert to oversee the implementation of the Energy Response Plan.

For a second time Ramaphosa has cut an overseas trip short to return to South Africa and attend to the energy crisis as the country saw Stage 6 power cuts on Sunday.

The DA said there was no sense of urgency from Ramaphosa, Mineral Resources and Energy Minister Gwede Mantashe and Public Enterprises Minister Pravin Gordhan while Eskom CEO Andre de Ruyter and COO Jan Oberholzer reflect the true severity of the situation by using words such as “catastrophe”.

“At the end of July, President Ramaphosa launched his latest plan to deal with load-shedding to much fanfare and nods of approval from the media and energy role-players. But two months later, almost every aspect of this plan has stalled,“ said Steenhuisen.

He said it was a great concern that there was no lack of urgency, with no measurable targets or clear timelines attached to any of the project deliverables.

The DA leader stressed that the Energy Crisis Committee must not be replaced by “another set of African National Congress (ANC) politicians”.

“We cannot repeat the same actions and hope for a different outcome,” he said.

The DA leader proposed that outside industry experts should be both apolitical and leading experts in the energy field.

Steenhuisen went on to say that the expert must be sufficiently empowered to do whatever it took to stabilise the current generation fleet and bring additional generation on board, without their hands tied by red tape that had held back recovery until now.

In addition, the party said their proposal required the executive authority to assemble a team of experts, to oversee the hiring of engineers and managers without having to answer to “racial bean counters in any ANC ministry”, and the power to make decisions on the procurement of additional electricity from independent producers, without stifling regulations imposed by Mantashe and Trade, Industry and Competition Minister Ebrahim Patel.

In addition to appointing this outside expert the DA proposed a ring-fenced State of Disaster around Eskom and the country’s electricity supply.

The party said this would allow for the circumvention of the current legislation that prevented the acquisition of additional power from independent power producers.

The party also wanted Ramaphosa to fire Mantashe for what it called "multiple failures".

“He is responsible for the dysfunctional regulatory framework that has prevented our energy sector’s recovery. He has repeatedly blocked renewable energy projects. He has allowed the Risk Mitigation [Independent] Power Producer Procurement Programme to stall in the middle of the crisis, and he cannot see beyond coal. He must go, and he must go now,” the party said.

Above and beyond the obligation to declare any personal or private financial or business interests, executive members will now have to disclose funds received for their internal party campaigns.

On Tuesday, the Constitutional Court upheld a Gauteng High Court judgment that found legislation in the Executive Ethics Code was unconstitutional and invalid as it did not require members of the executive to disclose "donations made to campaigns for their election to positions within political parties".

Handing down the unanimous judgment, Justice Steven Majiedt found the code "falls short of constitutional and statutory dictates of transparency, accountability, and openness".

He added the current legislation around disclosures of donations for internal party elections undermined the Ethics Act and the conflict of interests regime essential to promoting "transparency and [dealing] with the pervasive corruption bedevilling" the country.

Majiedt stressed that "the need for transparency in campaign donations must be understood against the backdrop of and the context of the pressing need to curb and strive towards eradicating corruption".

The case is likely to have a bearing on donations to the campaigns of politicians seeking positions in their parties, especially the African National Congress (ANC) leading up to its December elective conference.

The Constitutional Court judgment confirmed a ruling handed down by the Gauteng High Court in Pretoria in December last year.

It found the Executive Ethics Code, in its current state, was unconstitutional and invalid for not requiring members of the executive to disclose "donations made to campaigns for their election to positions within political parties".

The High Court gave President Cyril Ramaphosa a year to remedy the defects in the code, which the Constitutional Court also upheld on Tuesday.

The judgment is not retrospective, meaning donations made to Ramaphosa's "CR17" campaign for the ANC presidency will not have to be made public.

The case was brought by investigative journalism unit amaBhungane, as it sought confirmation of the High Court ruling.

The Constitutional Court heard amaBhungane's case in May.

The investigative news unit argued democracy "is diminished when unaccountable people and entities with unknowable resources bring extraordinary influence to bear on policy and the elected officials they have sponsored".

It also stressed when politicians knew they could operate without the scrutiny brought by an effective watchdog system, they might be more likely to take advantage of the spoils of public office at the expense of the public good.

amaBhungane took up the case after the High Court set aside Public Protector Busisiwe Mkhwebane's CR17 report in 2020.

Mkhwebane found Ramaphosa in breach of the Executive Ethics Code for not disclosing a R500 000 donation to his campaign for the ANC presidency in 2017 which was received from former Bosasa chief executive Gavin Watson.

At the time, the court deemed that under the current prescripts of the code, Ramaphosa was not legally obligated to disclose the donations he received for internal party elections because he had not personally benefitted from them.

The outcome of the Ramaphosa case led to amaBhungane challenging the constitutionality of the Executive Ethics Code in a parallel process.

The African National Congress's (ANC's) December leadership contest is hotting up as branches name their preferred candidates and Nkosazana Dlamini-Zuma is among the first to be nominated as party leader.

Dlamini-Zuma was nominated at an event her eThekwini Ward 32 branch hosted in KwaZulu-Natal on Sunday night.

The Cooperative Governance and Traditional Affairs minister said last week that she was willing to contest for the ANC presidency for a second time if she was nominated.

ANC branch general meetings (BGMs), which started over the weekend, continue this week.

National executive members Lindiwe Sisulu and Zweli Mkhize were also eager for backing.

Sisulu was in the Amathole region in the Eastern Cape over the weekend, where an ANC branch promised her a nomination in Tamara, Ngqushwa.

The branch said it was time for a woman to lead the party after men had failed to do so for 28 years, branch chairperson Phumlani Mdolomba said, according to a Daily Dispatch report.

Mkhize launched his presidential bid last week with a speech criticising ANC president Cyril Ramaphosa and his supporters. He said they were using state resources to attack opponents.

News24 reported last week that Dlamini-Zuma's nomination had the backing of former president Jacob Zuma, who also told those aligned to the party's radical economic transformation faction to support her.

Paul Mashatile, Ronald Lamola and Mmamoloko Kubayi are vying for the deputy presidency and are expected to be nominated.

After a few months of uncertainty about who will meet the threshold for nominations, the picture will become clearer in coming weeks as branches - not the party's leaders - have their say.

As South Africans contend with power cuts on Monday owing to insufficient energy generation capacity by Eskom, the Democratic Alliance (DA) wants government to open up the market to allow the participation of small, medium-sized and microenterprises (SMMEs) in the renewable energy sector.

The party pointed out that South Africa was experiencing unprecedented levels of power cuts this year, with no sign of an immediate end to the supply challenges faced by Eskom, which was also seeking a 32% tariff increase from the National Energy Regulator of South Africa.

“Meanwhile, the damage to the economy, particularly small enterprises, has been immediate and enormous. Broad economic cost due to daily disruptions includes significant losses in production, investments, large scale de-industrialisation, greater unemployment and declining livelihoods. The country's unstable power supply further undermines the government's so-called plan of encouraging digital innovations among small and micro-entrepreneurs,” the DA said.

The party believed that SMMEs could play a significant role in solving South Africa’s power crisis by being allowed to take part in small-scale energy generation (SSEG) activities.

The DA added that the ongoing electricity crisis posed the single biggest existential threat to any business in the SMME sector.

“It is, therefore, unconscionable that the Minister of Small Business Development Stella Ndabeni-Abrahams is not actively working to promote increased SMME participation in the renewable energy sector,” it said.

The party explained that SSEG would provide the opportunity for traditional electricity consumers to be transformed into “prosumers”, by allowing small businesses to become active contributors to the supply of electricity while generating employment and economic output throughout the energy supply chain.

The DA blamed the African National Congress (ANC) for the power supply crisis, saying it was a direct consequence of the ANC’s “hostile State interventionist and race-based policy approach” to the energy solution, which it believed incentivised corruption on an industrial scale.

South Africa is teetering on the brink of its most severe power cuts yet, just two months after the government announced emergency measures to try and end intermittent outages, prompting President Cyril Ramaphosa to cut short an overseas trip to oversee the response to the crisis.

State power utility Eskom Holdings, which provides the bulk of the nation’s electricity, began cutting 6,000 megawatts from the national grid over the weekend -- equivalent to the most on record -- to prevent the collapse of the national grid and its executives warned there was a risk the situation could deteriorate further. The rand weakened to a two-year low against the dollar on Monday, while shares of mining and manufacturing companies slumped.

“The situation will almost definitely get worse,” with no immediate signs of substantial new capacity being added to the grid, said Hilton Trollip, an energy research consultant at the University of Cape Town.

Eskom is struggling to meet electricity demand because its old and poorly maintained power stations continually break down, and the nation has been subjected to rolling blackouts since 2008. There have been blackouts for eight straight months this year.

Ramaphosa, who is in the UK attending Queen Elizabeth II’s funeral, decided to skip a planned address to the United Nations General Assembly and head home instead after holding a virtual briefing with cabinet ministers and officials, according to his spokesman Vincent Magwenya. It’s the second time he’s had to curtail an overseas visit to respond to the energy crisis -- he cut short a visit to Egypt in late 2019, just five months after he was elected president.

While Ramaphosa announced plans two months ago to increase Eskom’s maintenance budget to improve its plants’ reliability and enable it to buy more surplus power from private producers, those measures largely focused on longer-term solutions and haven’t made a tangible difference so far. An earlier plan to buy emergency power from producers has faced ongoing delays, with only 150 megawatts of capacity from private projects by developer Scatec ASA forging ahead.

The latest power cuts have “come at the worst possible time” as financing conditions are tightening significantly across the globe, economists at Rand Merchant Bank said in a note to clients.

MINING LOSSES

The rand weakened as much as 1.1% to 17.7975 to the dollar on Monday, the weakest level since May 2020. The FTSE/JSE Africa All Share Index dropped for a fifth straight day in Johannesburg, declining as much as 1.6%.

“We are sending people underground and working, but there are implications” for production, with energy-intensive units and processes being managed to reduce power demand, platinum-group metals giant Sibanye Stillwater Ltd. said in response to questions.

The power cuts contributed to the economy’s 0.7% contraction in the second quarter. BNP Paribas analysts estimate that it would cost the South African economy R5.1-billion ($288 million) a day should the situation worsen to the point where 8,000 megawatts of capacity were removed from the grid.

Ongoing outages could affect water and sanitation services because pump stations may not be able to operate properly, according to the municipality of Cape Town, the country’s main tourist hub. While permanent generators have been installed at all wastewater treatment plants, there is limited availability for mobile plants and some sites could overflow if outages last more than a couple of hours, it said.

CRISIS PERSISTS

On Sunday, Eskom said it plans to buy about 1 000 MW of electricity from private producers, but didn’t spell out where it will access that capacity or where the money will come from. The utility has already spent R7.7-billion this year on diesel to run turbines used at times of peak demand, and is in talks with the World Bank to borrow an equivalent amount to build additional renewable generation capacity and procure batteries.

Gwede Mantashe, the energy minister,...

South Africa will require R500-billion in private investment to end power cuts that are stalling economic growth by the start of 2025, said Peter Attard Montalto, Intellidex’s head of capital markets research.

The money is needed to construct 15 gigawatts of generation capacity and five gigawatts of battery storage, he said, adding that the requirement is unlikely to be met within such a tight time-frame.

South Africa is facing its worst-year yet of power cuts as Eskom imposes rolling blackouts, known locally as load-shedding, because its poorly maintained, coal-fired plants keep breaking down. The country has been plagued by outages since 2008.

“Ending load-shedding by end-2024 is possible, but a stretch,” Montalto said in a response to questions. It would require that all efforts to end the crisis and introduce energy reforms “would have to go like clockwork,” he said.

The country will need to invest an additional R175-billion in expanding its power grid over the next decade, Montalto said in a presentation to the Presidential Climate Change Coordinating Commission on Thursday.

Stellenbosch University (SU) has welcomed a Western Cape High Court judgment which declared that the university did not violate its language policy.

The Western Cape High Court dismissed an application by the Democratic Alliance (DA) and the university's student organisation StudentePlein (SP) to have the changes in the language implementation plans in the four semesters of 2020 and 2021 declared unconstitutional, unlawful, and in violation of the policy.

The DA and SP accused the university of using the Covid-19 pandemic as an excuse to do away with providing learning material in Afrikaans during this period. They also argued that students were not sufficiently involved in the process of introducing these adjustments in the policy.

In papers filed at the High Court in October last year, they argued that the university violated its 2016 language policy by making learning material available only in English, and not Afrikaans.

"The ruling. confirms SU's ongoing point of view that there was no deviation from the Language Policy, but rather consulted and approved changes to certain language arrangements of certain faculties. SU's Language Policy made full provision for this," said Professor Deresh Ramjugernath, deputy vice-chancellor of learning and teaching.

News24 reported that the university's senate had accepted a recommendation from its academic planning committee (APC) that lectures provide new learning material in English only and not in Afrikaans, as its policy required.

The recommendation was in response to demands for converting learning material to English and Afrikaans to accommodate online teaching and learning during the pandemic.

The senate said old learning material in the language would be made available to students requiring it.

In its court papers, the DA and SP argued that the "deviation from Afrikaans" was imposed on university faculties by the APC, which influenced the senate to approve it.

They argued that this violated the policy, which stipulated that faculties should make changes and that it should not be "imposed" by the senate.

In its judgment, the court said that although promoting multilingualism was among the core pillars of the policy, it made provisions for changes under unprecedented circumstances like the pandemic.

The court stated that before the government introduced the hard lockdown in March 2020, faculties had – in 2019 – made submissions for the 2020 academic year.

These plans were, however, scrapped when universities had to introduce alternatives to adhere to the regulations.

The court ruled that these changes, including in the language policy, were detailed in the university's documents on its plan for the pandemic.

"The documents also stated that faculties' planning was likely to include changes in module outcomes, assessment schemes, and language policy implementation to adapt the academic offering to what was reasonably practicable in light of the then-Covid-19 measures," the ruling stated.

The ruling also detailed other changes implemented by the university to ensure adherence to the government-imposed regulations. These included shortening holidays, evacuating students from campus, and facilitating effective online teaching and learning.

The ruling also cited a February 2021 communiqué sent to students by the university, in which it said online learning would continue despite the relaxation of some regulations.

It indicated that changes in the language policy would continue.

The court ruled that SP failed to indicate in its argument that students who preferred to learn in Afrikaans could understand English, which meant there was no violation of their constitutional right to an education.

It also found that the university sufficiently informed students of the changes in the policy and that these were not "imposed" on faculties.

The court ruled, "I am persuaded that its explanation of involvement of faculties, some level of student representation in that involvement, and the decisio...

Auditor-General (AG) Tsakani Maluleke said her office would pursue a strategy to tighten internal controls on appointments and compensation-related transactions. This after a Bowmans report cleared her of eight allegations made by the AG's head of human resources, Mlungisi Mabaso, but raised these matters as internal shortcomings.

Maluleke was briefing Parliament's Standing Committee on the Auditor General (SCOAG) on Friday morning on the report into the now-refuted allegations.

After clashing with Maluleke over his performance and the low number of recruited trainees to work at the institution that successfully obtained a Certificate of Theory in Accountancy (CTA), Mabaso proceeded to accuse Maluleke of clearing irregular transactions and making irregular appointments.

In the Bowmans report, Advocate Werner Krull clears Maluleke of any wrongdoing and refutes Mabaso's claims that she authorised a string of unlawful payments as the incumbent and deputy AG to benefit the late former AG Kimi Makwetu.

Krull found that while he had 22 years' experience in public relations, the appointment of Harold Maloka as head of communications did not meet the legal requirement, after the waiver of the recruitment process.

Mabaso had also accused Maluleke of paying interest on the deferred compensation package to Makwetu's widow, without the authorisation of SCOAG.

Krull found that while the interest was payable on the package "the calculation of and the dates in respect of which interest was paid was incorrect". The report recommended that the calculation be revisited and, if necessary, be recouped from his estate.

Deputy AG Vonani Chauke told the committee that while the Bowmans investigation cleared Maluleke of wrongdoing, the document-keeping standards at the institution where it related to appointments needed to be improved.

"In cases where the executives responsible did not do their jobs, we will take action. We take the legal opinion of the report seriously and we will work to tighten control weaknesses with a time-bound strategy," said Chauke.

Chauke said after interrogating the legal opinion, the audit committee noted weaknesses in two out of the nine allegations against the AG, namely the calculation of interest paid to the deceased estate of the late AG Mr Makwetu and the appointment of the head of communications.

"These isolated matters of procedure will be considered in the broader context of the AGSA's organisational risk assessment. The executive leadership committed to including the procedural weaknesses in a plan for the committee's monitoring at its scheduled meetings," Chauke said.

Maluleke said she met with Mabaso in June after he had complained that the manner in which she held him accountable for the low uptake of accredited recruits amounted to humiliation.

She said Mabaso asserted that if his claims against her went public, they would hurt his reputation, and he then proceeded to request a financial settlement. She said she refused to entertain a financial settlement to facilitate Mabaso's exit, asking him to either continue working or resign.

"I cannot allow myself to be intimidated or threatened from doing my job. It is against this background that I had these allegations subjected to a swipe and transparent review. We have been transparent with staff and oversight institutions about this matter from the beginning," she said.

A statement from the office of the AG said Mabaso is expected to appear before the disciplinary committee before the end of September.

Former Corruption Watch executive director and member of the National Anti-Corruption Advisory Council David Lewis stressed on Thursday that while South Africa is in need of a new anti-corruption agency, it must not include law enforcement as he believes it will enormously restrict the public access to the agency.

One of Zondo Commission report recommendations is the establishment of a new anti-corruption agency.

Lewis was speaking during the State capture conference hosted by the Public Affairs Research Institute and the Council for the Advancement of the Constitution.

Lewis pointed out that the State’s agency that normally coordinates anti-corruption activities, the anti-corruption task team, is currently led by law enforcement.

He noted that the confidentiality requirements in law enforcement for agencies such as the Financial Intelligence Centre, the prosecutorial authority and the Hawks, are very strong and that the decision making process cannot be interfered with.

“If they are incorporated into the new Council, the Council will have to be effective, other anti-corruption activities will have to be subordinated to the law enforcement requirements for confidentiality. So public campaigns, media statements, all the staff that allows the public to develop a sense of confidence, sense of engagements with anti-corruption activities, will be changed because law enforcement requirements for confidentiality would have to be respected,” he explained.

Added to that, he noted that to set up a new chapter nine institution, it would require at least two constitutional amendments with an elaborate legislative structure and a statutory basis.

He said one of the reasons why the anti-corruption strategy has failed is because it has no form of statutory basis.

“I do not know if a chapter nine institution is necessary,” he stated.

He said a new agency should be involved in advocacy, research and public campaigns.

He suggested that it would be an interesting and important task for the agency to look at why the State agency has been a “total failure”. Lewis believes one of the reasons it has been unsuccessful is because it includes both law enforcement and non-law enforcement bodies.

He said while there were some good reasons for decentralisation, he believes it has become fragmented and impossible for National Treasury and other entities to exercise oversight.

He said one of the things that will need to be worked out in the new agency, if is to be established, is a clear outline of what will be centralised and what will be decentralised. Also needing clarification is the investigation of irregularities, corruption, mismanagement, which he said is part of a centralised function.

APPOINTMENT PROCESSES

Lewis made the point that a key element in the State capture project was the appointment process for boards and executives of State-owned entities, as well as the appointments of director generals of government departments such as mining, minerals and energy, which were of interest to Gupta targets.

He said the appointments were made in such a way to facilitate the State capture saga, and he thinks it will be a good idea to place appointments in the hands of a “blue ribbon panel” – a pool of people with unimpeachable integrity and some degree of human resource experience.

“Obviously from time to time if you are appointing somebody to do a contact to build a nuclear power station, you don’t appoint people who are experts in procuring stationary. So there have to be technical expertise on these committees as well,” he stressed.

He also suggested a high level government representative on each of panel as government was entitled to require that appointees generally support the strategies and approach of the government of the day.

He suggested that it was a bad idea for one body to appoint an employee who is accountable to another person, explaining that if the CFO of a State enterprise reports to the CEO, it should be the State enterprise that ma...