Thursday, July 15, 2021


 Suspended ANC Secretary-General Ace Magashule. (Photo: Gallo Images / Frikkie Kapp) | Former president Jacob Zuma. (Photo: Leila Dougan) | Former special ops boss Thulani ‘Silence' Dlomo. (Photo:

South Africa suffered an insurrection attempt this week with two provinces, KwaZulu-Natal and Gauteng, disabled and national fuel and food supply lines disrupted. It is the first such campaign organised and orchestrated on social media and shows the potency of the medium. Just over 38 million South Africans are now on the internet and 25 million of us are on social media.

Ferial Haffajee

More than 70 people have died, at least 1,354 people have been arrested and 12 ringleaders are being investigated for a political campaign that has spiralled out of the control of its firestarters.

The first arson “protests” at the weekend, in which 35 trucks were torched on the N3, which links Gauteng to KwaZulu-Natal and is South Africa’s food and fuel route, started the darkest week of anarchy in the country’s recent history. Information has now emerged that this was planned by intelligence operatives and other cadres loyal to Jacob Zuma. The former president is jailed at the Estcourt Correctional Centre for contempt of court and his loyalists want him out.

 “These are people with experience of running operations,” said Deputy State Security Minister Zizi Kodwa at a briefing on Wednesday. News24 reported that Zuma’s leading spymaster and the former ambassador to Japan, Thulani Dlomo, is one of 12 ringleaders being investigated by the police’s Crime Intelligence and by state intelligence as being the architects of a political campaign of which they have lost control.

The SA National Defence Force contingent deployed to end the violence was on Wednesday increased to 25,000 soldiers as the government battled to bring the situation under control: overnight, 208 more incidents of looting were reported – 52 in Gauteng and 156 in KwaZulu-Natal.

While Gauteng appears to be coming under control, the looting in Durban is being live-streamed as police prove either unable or unwilling to control the mayhem, which Mayor Mxolisi Kaunda said had already cost the port city R15-billion in the week following Zuma’s jailing. 

The insurrection was organised on social media once the 12 masterminds had crafted the strategy of chaos, according to senior ANC and intelligence sources who were interviewed by Daily Maverick on condition of anonymity. The chat messages in the graphic below have been filtered off social media and reportedly come from groups on WhatsApp and Telegram where the insurrectionists organised.

The common theory now is that the truck burnings were relatively easy to organise because of the long tail of renegade MK groups (organised in new movements) active in the sector. They have been campaigning against foreign truck drivers and are regarded as being behind arson attacks on truckers for at least the past three years. Police have promised to clamp down but have not substantially dealt with the killings of more than 200 truckers since 2018.

In November 2020, two truckers died and 30 trucks were set alight in anti-foreign driver campaigns allegedly by the All Truck Drivers Forum.  

From the N3 campaign, the plan was to attack symbols of “White Monopoly Capital”, which explains the looting of warehouses and more than 200 malls. Specific chains were targeted.  






Wednesday, May 12, 2021

AGE OF ACCOUNTABILITY Judicial Conduct Committee to probe Zuma-era arms deal commission whitewash by judges By Marianne Thamm• 12 May 2021


In the aftermath of a North Gauteng High Court finding, judges Willie Seriti and Hendrick Musi will now have to explain why the Arms Procurement Commission overlooked crucial information prior to making findings in 2016 that the arms deal was clean as a whistle.

On 7 May, Sello Chiloane, secretary of the Judicial Conduct Committee, informed the NGOs, Shadow World Investigations and Open Secrets, that their complaint against Seriti and Musi had been referred by JCC Acting Chair, Deputy Chief Justice Raymond Zondo, for investigation.

Seriti, a Supreme Court of Appeal judge, and Musi, former Judge President of the Free State High Court, chaired the Arms Procurement Commission, known as the Seriti Commission, for four years at a cost of R130-million.

During that period two shipping containers left at the Hawks premises in Pretoria, containing an eye-watering 4.7 million computer pages and 460 boxes of evidence, remained untouched. 

Neither former president Jacob Zuma nor French arms company Thales – who are both, after almost two decades of legal stalling, about to face charges of fraud and corruption related to the arms deal – were called by Seriti.

The decision by the JSC to probe the judges is another victory for civil society, which has relentlessly demanded accountability in the “original sin” of the country’s democratic era – the 1999 arms deal.

The 2019 North Gauteng High Court ruling setting aside the 2016 findings of the Seriti Commission was a direct result of an application by Corruption Watch and Right2Know, which argued that the commission had misled the public in its findings.

In that instance, Gauteng Judge President Dunstan Mlambo excoriated Seriti for failing to hold those responsible for the arms deal accountable, labelling the entire process a “manifest failure”. 

Shadow World Investigations and Open Secrets lodged the complaint with the JSC in 2020 after the findings of the North Gauteng High Court. Chiloane informed both organisations that the tribunal would sit on Saturday, 12 June.

The complaint requested the JCC to consider whether certain actions by Seriti and Musi may constitute criminal misconduct, “and, if so, to refer these matters to the NPA for further action”.

“The organisations lodged this complaint to bolster public trust in the integrity of the Judiciary and send a strong signal that the kind of conduct that enabled a cover-up of serious crimes by the Seriti Commission should not be tolerated,” said Paul Holden of Shadow World Investigations and Hennie van Vuuren of Open Secrets in a joint statement.

The R142-billion (calculated in current value) arms deal had resulted in “enormous social damage in South Africa – resulting in the loss of up to one million jobs – and enriched a small group of powerful European corporations, politicians and middlemen”.

The decision by the JSC was, said both organisations, a “major step” in the process towards accountability in South Africa.

“This first step towards accountability is a further vindication of civil society’s efforts to expose cover-ups at the Seriti Commission – and the decision by civil society activists to withdraw as witnesses from the Commission,” said Shadow World Investigations and Open Secrets.

The JSC informed both organisations that at this stage it had taken into account “only your version”, which is in keeping with the JSC Act.

Seriti and Musi are only required to respond after the chairperson has made a decision to refer the complaint to the committee and these will be considered at a later stage.

At the meeting on 13 June the committee will consider whether the complaint, if established, would prove “incapacity, gross incompetence or gross misconduct” by the judges.

The judges will either face a Section 17 (2) inquiry or recommend to the commission that it should be investigated and reported on by a Tribunal. DM








How SAPS protects its members from being prosecuted for murder - Daily Maverick


Every year, police in South Africa kill hundreds of people and are accused of brutalising thousands more. A new investigation by Viewfinder has revealed that the killings and brutality are enabled by police management’s reluctance to discipline officers accused of wrongdoing in these cases. This is true even when watchdog investigations conclude that these officers should be disciplined. Given free rein to reoffend, problem officers may become emboldened. For their victims, the consequences can be dire. 

This article was first published on Viewfinder and GroundUp.

On 2 June 2014, 52-year-old Phindile Ramncwana lay dying at a neighbour’s house in Sada, a rural township in the former Ciskei region of the Eastern Cape. As Esther Kasam tended to him, she recoiled at the sight of blood and vomit in a five-litre container on the floor beside his bed. Ramncwana retched when he tried to eat. He complained of stabbing pains in his stomach, Kasam recalled during a recent interview.

“Phindile, what did you say when they were hitting you?” Kasam had asked.

“I was crying a lot. I asked what I had done to be beaten like this. I begged for forgiveness,” came his response.

People who said they witnessed the assault would later provide statements to an investigator from the Independent Police Investigative Directorate (IPID). They described how, on the night before, a police officer tackled Ramncwana to the ground in Whittlesea police station’s charge office when he apparently defied instructions “not to make a noise”. Ramncwana had been arrested earlier for being “drunk and disorderly”, according to police station records.

At least three other policemen, including a warrant officer who was on duty in a command role that night, joined in the assault, according to one witness statement. They slammed Ramncwana’s head first into the wall and then into the floor, they kicked him in the ribs as he lay shielding himself.

Phindile Ramncwana (photo: supplied)

The full extent of the assault is not apparent from these witness statements. Yet, when Ramncwana was released from custody early the next morning he could barely walk, according to a taxi driver who saw him. It was the middle of winter. Ramncwana had limped into the taxi rank, the driver said, barefoot, hunched over and holding his stomach, to ask for a lift home.

Later that day, as he lay in bed, Ramncwana’s condition worsened. Kasam recalls how she ran out to borrow a wheelbarrow. She covered Ramncwana in her best, new blanket and followed on foot as neighbours wheeled him to the Sada Clinic. 

There, a nurse also witnessed Ramncwana “crying” in pain and “vomiting blood”. When an ambulance failed to respond to his calls, the nurse drove Ramncwana to Hewu Hospital in his own car. Hospital records show that Ramcwana complained of stomach pains for the last time at 4.10am the following day. Then, these records show, he started “gasping” for air and hospital staff administered oxygen to him via a mask. 

“He Rest in Peace at 7:00 am,” the log book’s scribbles recorded. A doctor was called to certify Ramncwana’s death.

A week later, an autopsy report revealed the extent of his injuries: Abrasions and bruises all over his body, two fractured ribs, bruises to his heart and a ruptured small intestine. From this rupture, intestinal content had slowly seeped into the cavity holding Ramncwana’s abdominal organs. This caused the infection which killed him.

Whittlesea: A pattern of abuse

“This is a very, very serious case,” said Dr Steve Naidoo – one of South Africa’s leading forensic pathologists with decades of experience in conducting autopsies on people who have died in police custody – on studying the report’s findings. He added that Ramncwana’s injuries were typical of “extreme interpersonal violence” which probably comprised kicking and stomping.

In mid-2014, police management in Whittlesea knew there was a problem of brutality within its ranks. Over the two previous years the station had registered a slew of assault cases against its own officers. According to IPID’s data on the outcomes of these cases, SAPS management took very little action. This is not uncommon for a police station in a poor community in South Africa. 

Whittlesea police station (photo: Anton Scholtz)

Visit Sada today and stories from those years, of a task team from Whittlesea SAPS raiding taverns and prowling the unlit streets at night to arrest and beat up the fleeing patrons, still abound. The name of the warrant officer who reportedly led such operations, and who was accused in Ramncwana’s killing, is still steeped in notoriety. Viewfinder understands, from IPID’s records on the case, that he was acquitted in a disciplinary hearing and remained on duty at Whittlesea SAPS long after Ramncwana’s death. As of June 2020 he enjoys early retirement, according to a check of the government’s PERSAL system by a source.

The IPID Act, which came into force about two years before Ramncwana’s death, affirmed that station commanders should transfer such cases to the directorate’s relevant provincial office. In the Eastern Cape, IPID is in East London, about 200km from Whittlesea. Today, still, police commanders throughout South Africa would argue, as Police Minister Bheki Cele has done, that this means they must outsource the cases and wait for the outcomes of IPID’s investigation before suspending or disciplining officers.

So, officers accused in even the most serious violent crimes often remain on duty.

IPID is a fraught and overworked institution. Viewfinder has previously revealed that the directorate has a history of “completing” poorly investigated cases to inflate performance statistics, while obstructing justice for victims of police brutality. Even when investigations are thorough, the completion of these are often delayed for months, due to massive case backlogs, a dearth of manpower, delays in technical reports and long distances to crime scenes. Interviewed about the Whittlesea cases, IPID Eastern Cape head Bongiwe Tukela lamented that she has only 12 “foot soldiers” to cover the rural vastness of the province. 

In spite of these odds, some IPID cases do lead to criminal or disciplinary recommendations against accused officers. For instance, Tukela’s office recommended that police management discipline certain officers accused of assault and other crimes at Whittlesea in the years before and after Ramncwana’s alleged murder. But, the watchdog’s data show that hardly any were disciplined.

According to IPID data, four Whittlesea officers – the warrant officer, a constable and two police reservists whose identities are known to Viewfinder – had pending assault cases and disciplinary recommendations against them on the night that they were implicated in Ramncwana’s killing. People present in the station’s charge office on the night also accused two officers implicated in the Ramncwana case of separate assaults: With “fists” and an “iron rod” in one instance and with “open hands” and “police boots” in the other.

An upcoming short film by Viewfinder revisits Whittlesea in rural Eastern Cape and unpacks the circumstances surrounding Phindile Ramncwana’s death. (Video editor: Michael Minnie)

Nomandilakhe Gamana was the complainant in another, older assault case against a constable implicated in Ramncwana’s killing. She was left badly bruised and bleeding from her private parts, she recalled during a recent interview. When she reported her assault at the police station, she said, the officer taking her statement scoffed and assured her point-blank that the case “would go nowhere”.

“I thought that (he) was going to be arrested for what he did to me. I guess it never happened because he is a policeman,” Gamana shrugged.

Across South Africa, impunity reigns

As part of an investigation which has now spanned more than two years, Viewfinder has collated and analysed IPID’s raw data on thousands of alleged killings by police and tens of thousands of other brutality complaints. Taken across more than 1,000 police stations in South Africa, these data show that violence permeates police work in the country. These records also reveal that police management routinely fails to discipline officers accused of brutality. 

This is often true when allegations are registered at police stations – because station commanders outsource the dossiers to IPID. Yet, it is also usually true when IPID completes its investigations and expressly recommends that police management discipline officers via departmental hearings. SAPS converts fewer than one in four IPID recommendations into disciplinary convictions, according to the watchdog’s case data.


Few police brutality cases result in disciplinary recommendations against accused officers, but when they do, convictions and proper sanctions are rare. For an interactive version of this bar graph, which allows you to explore police accountability in different provinces and for different classes of crimes registered by IPID, check out this article as it appears at (Data visualisation: Viewfinder)

If they were meted out properly, SAPS departmental sanctions could be effective in taking problem officers off the street. For SAPS management, the burden of proof for securing a disciplinary conviction is much lower than for a prosecutor pursuing a criminal conviction in court. So too is the likelihood of delays. Criminal proceedings against police officers can drag on for years – the National Prosecuting Authority (NPA) in the Eastern Cape is yet to decide whether to institute murder charges against the officers accused in Ramncwana’s 2014 killing.

The ultimate power of police management over these internal disciplinary processes explodes the notion that IPID is able to provide external or “independent” police oversight in South Africa – the purpose for which it exists. And, the reluctance of police management to properly enforce disciplinary recommendations leaves IPID’s officials in the provinces cynical and demoralised. Police officers, like those accused of terrorising Sada’s residents and murdering Ramncwana, are often left unpunished.

Killings by police in KwaZulu-Natal

Police management’s failure to discipline officers for killing people is most frequent where it is probably needed most, IPID data show. Between early 2012 and early 2020, police in KwaZulu-Natal killed 1,057 people in 849 separate incidents – more than in any other province, in absolute numbers and per capita.

Between early 2012 and early 2020, case data show that KwaZulu-Natal police management only convicted nine officers following IPID investigations into these killings. This meant that police in the province had the country’s lowest rate for converting IPID negative recommendations against officers accused of misconduct in such killings into disciplinary convictions.

Asked about SAPS in KwaZulu-Natal’s interpretation of the high body count and the low disciplinary outcomes, spokesperson Captain Nqobile Gwala refused to comment.

“Kindly contact IPID for details and comment as we cannot comment on their reports and findings,” she said. Versions of this response – a refusal to comment and a referral to IPID – are common from police spokespeople in South Africa when queried about such killings and alleged brutality.

Police in KwaZulu-Natal have killed more people in recent years than in any other province. Umlazi, south of Durban, is a hotspot for killings by police, according to IPID data. (footage: Jimmy Reynolds)

Across all provinces and all classes of crimes that IPID investigates, the data show that the problem of SAPS failing to discipline officers with recommendations against them has got worse in recent years.

Police ‘can do no wrong’

Police management have ample opportunity to scupper IPID disciplinary recommendations to protect their colleagues.

 “They stand with their members, always. They don’t believe that police officers can do any wrong,” said one former senior IPID official, quoted on condition of anonymity.

Police officers in charge of enforcing discipline may exploit a confluence of loopholes and ambiguity in law and SAPS discipline regulations to nullify IPID recommendations. 

Sometimes, says Thabo Leholo, the long-serving head of IPID in the Western Cape, police refuse to discipline an officer because an alleged offence happened “a long time ago”. Viewfinder understands that such an excuse may be rooted in SAPS’s interpretation of a regulatory clause which prescribes an “expeditious process” for serious allegations of misconduct such as murder, serious assault and rape.

“(Police management) ignore the merits of the case and start holding on to a technicality that does not exist, or is the result of a wrong interpretation,” says Leholo.

Viewfinder has seen a sample of disciplinary outcome reports by SAPS in the Western Cape which show that the “time delay” between an alleged offence and a disciplinary hearing was cited by SAPS as the reason for an acquittal.

SAPS Western Cape spokesperson Lieutenant Colonel André Traut did not respond to a question about the interpretation of the “expeditious process” clause in the police’s discipline regulations and whether it could be used to acquit officers accused of violence.

“Any process in consideration of disciplinary steps against any member is based on legal principles. Therefore, each case is dealt with on its own merits,” he said.

In other instances, throughout South Africa, police management interpret their legal obligation to “initiate” IPID recommendations as cause to appoint their own investigator to reinvestigate an IPID case from scratch. At best this is duplication. At worst, according to an IPID source, these SAPS disciplinary investigators spook witnesses into silence, retraumitise victims and deliberately throw doubt on the findings of the original investigation.

As far back as 2014, the directorate’s compliance monitoring head, Mariaan Geerdts, complained to Parliament that this custom “defeated the entire exercise” for which IPID exists. 

Parliament of South Africa (photo: Ashraf Hendricks / GroundUp)

The loophole was not closed. Instead, it was re-entrenched by SAPS’s new discipline regulations published in 2016. Today, still, the police watchdog can do very little if these internal police investigations whitewash the case against an accused officer. In such instances, exculpatory findings by a police disciplinary investigator – or an ad hoc decision by police management not to initiate disciplinary proceedings – will supersede the findings of probable wrongdoing by an “independent” watchdog investigation.

“If I’m the commander and my member that I want, that I’m buddy-buddy with, has done something, I’m not going to take steps against him. I’m going to do everything to stop steps from being taken,” said one current IPID official, quoted on condition of anonymity.

In instances where disciplinary hearings actually proceed, police officers deputised as “employer representatives” are tasked with leading evidence. If they are listless or selective in this task, this invariably results in the acquittal of their accused colleague. In such instances, the IPID investigators who originally gathered the evidence can do nothing if their case is misconstrued by incompetence or design. Often these investigators do not even know of the hearing’s date and outcome until after the fact. Police management are not obliged to invite IPID investigators or independent observers to ensure the integrity of such hearings. These happen behind closed doors. 

In these hearings the accused person, SAPS’s representative (tasked with leading evidence against the accused), and the chairperson (who must decide on guilt or innocence and hand down a sanction) are all police officers.

“We’ve asked many times in the past, ‘please involve us, invite us to these disciplinary hearings’. (SAPS management) made it clear that they prefer for us not to be involved,” Geerdts said during a recent interview.

All but one of the six officers who faced a departmental hearing for Ramncwana’s arrest and alleged killing were acquitted, according to IPID in the Eastern Cape. But, the outcome report, seen by Viewfinder, was short on detail and reasons. When queried on the case, SAPS in the Eastern Cape refused to comment. “Internal disciplinary measures taken against any employees are a matter between the employer and the employees,” said police spokesperson Sibongile Soci.

Last week, Viewfinder provided SAPS in the Eastern Cape with a list of 36 case numbers registered between 2012 and 2016. These included assault and other allegations against the officers implicated in Ramncwana’s killing and against Whittlesea police officers, in general. The SAPS Eastern Cape media centre acknowledged receipt, but it did not respond to a query about whether any officers had been disciplined for any of these cases. According to IPID data, only 2 of these cases had led to disciplinary convictions by the end of March 2020.

Low sanctions

“It’s so demoralising,” said Leholo, reflecting on the lack of transparency in SAPS disciplinary hearings and outcomes.

“IPID investigators put a lot of effort into these investigations. And, you’ve got a strong or prima facie case against the (police) member. And there is no justification for the brutalisation of the victim. Then you find out down the line a matter is thrown out on the basis of technicality – a technicality, I emphasise, that does not exist… I do not think it is fair to the victims.”

Annelizé van Wyk, former chair of Parliament’s Portfolio Committee on Police (PCP), was instrumental in drafting the IPID Act of 2011. She agrees that regulatory technicalities cannot reasonably supersede the intention of the law. The intention of this law, she says, was that IPID recommendations would be binding, and that SAPS would enforce swift discipline against officers found on the wrong end of these.

Former chair of Parliament’s Portfolio Committee on Police, Annelizé van Wyk (photo: Ashraf Hendricks / GroundUp)

Yet, even a disciplinary conviction is no guarantee of proper accountability. In the fraction of IPID cases which result in disciplinary convictions, the sanctions handed down are often light: Small fines, suspended sentences or warnings which are struck from a convicted officer’s personnel file within a matter of months.

Because SAPS’s departmental processes are so opaque, even to IPID, it is difficult to know exactly why this is. One explanation, Geerdts believes, is that though officers may be accused of very serious transgressions, departmental hearings only find them guilty of lesser charges of misconduct.

IPID has confirmed that one of the officers accused of misconduct in the killing of Phindile Ramncwana was convicted in a hearing. He was suspended for two months without pay, but kept his job. He is still on duty at Whittlesea police station today, according to a check of the government’s PERSAL system by a Viewfinder source.

A slow collapse of police discipline

Research by the Dullah Omar Institute has found that the reluctance of police management to enforce IPID recommendations occurs against a backdrop of a slow decline in SAPS management’s ability to enforce discipline. Even though there has been no significant decline in the number of killings and alleged brutality reported to IPID in recent years, SAPS Annual Reports statistics show that there has been a marked decline in the number of officers brought before disciplinary hearings and convicted (across all categories of alleged misconduct, not just ones related to the use of force).

Reported killings and brutality by police have remained relatively consistent in recent years, while the number of disciplinary hearings and convictions across all categories of misconduct have been declining steadily. (Data visualisation: Viewfinder)

For an officer fairly accused of one-off assault, management’s increasing apathy towards discipline amounts to a big let-off. For vigilantes, sadists or repeat offenders, it gives virtual free rein. They may commit and recommit abuses in the knowledge that they will probably never be fired by their employers. As repeat offenders go unchecked, the severity of their crimes often escalates, concludes Leholo.

IPID case data show that Ramncwana’s alleged killing was probably the culmination of a pattern of brutality at Whittlesea police station (in general) and by a group of police officers (in specific). And, six of the officers accused of misconduct for his arrest and killing were implicated in violent crimes in the months to follow. In each instance IPID investigated and recommended that the officers be disciplined. Its records show that this routinely did not happen. 

A pattern of brutality left unchecked? IPID complaints data show that officers accused of misconduct for Ramncwana’s arrest and killing had pending assault cases against their names or would reportedly go on to reoffend. (Animation produced by Viewfinder).

Viewfinder has established that two of the officers accused in the Ramncwana case were eventually discharged from the police and one has also resigned from the service. Yet, SAPS Eastern Cape’s failure to respond to queries meant that Viewfinder could not verify whether these dismissals and resignation were as a result of disciplinary action for known cases against these officers. 

Last week, Viewfinder submitted a query detailing many of the facts, findings and concerns from IPID officials contained in this article to SAPS national management. SAPS spokesperson Colonel Athlenda Mathe confirmed receipt and said that the query had been sent to SAPS “personnel management” for response. SAPS had not responded at time of publication.

A loss of faith

Sada is the product of successive forced removals. The first families were trucked here by the apartheid government from their homes on white-owned farms around Queenstown in the 1960s. Then families were brought from further afield – from Tarkastad and Adelaide, from Molteno and Port Alfred and eventually from the Western Cape and what was then the Transvaal.

Forced removals at Kammaskraal, near Peddie in the former Ciskei, in 1982 (photo: Ben Maclennan / Surplus People Project/UCT Libraries Special Collections)

Repressed for decades and still desperately poor, Sada is the type of community that policymakers had in mind when drafting a human-rights-centred mission for the post-apartheid police service.

For Esther Kasam, the failure of that mission is personal, not a datapoint. She loved Phindile Ramncwana like a son, she says. In a community where even food is scarce, she cooked for him and he built a kitchen sink for her to say thank you. Her husband and this younger man were best friends.

Kasam is 85 years old. In the late 1960s her family and her husband’s were taken from their homes on a farm outside Tarkastad, loaded onto trucks, and brought to Sada under police guard. For her, the police were a scourge then. They still are today.

Esther Kasam (photo: Anton Scholtz)

“My heart is broken,” she says, remembering how she and her neighbours followed in a procession behind the wheelbarrow taking Ramncwana to Sada Clinic. “I have never recovered. I cannot stand to interact with the police. I don’t want their greetings.” DM/MC

This article was first published on Viewfinder and GroundUp.

This investigation was funded by the Henry Nxumalo Fund for Investigative Reporting, Luminate, Millennium Trust and GroundUp. This article was edited by GroundUp.

Header poster design by Alex Noble, with photos by Alaister Russell for The Citizen and Ashraf Hendricks for GroundUp.


With a Mafia styled Minister of Police it speaks for itself.


Monday, February 15, 2021

Surprising twist in former Sharemax auditors’ disciplinary hearing

Surprising twist in former Sharemax auditors’ disciplinary hearing Legal team is to bring an application for the recusal of members of Irba’s disciplinary committee. By Roy Cokayne 15 Feb 2021  00:01 The Independent Regulatory Board for Auditors (Irba) disciplinary hearing against the former auditors of the failed Sharemax property syndication scheme has taken a surprising twist. Advocate Mike Maritz, appearing for the three auditors, indicated on Friday that he will be filing an application for the recusal of one or more of the members of the disciplinary committee on the grounds of an actual bias relevant to these proceedings or a perceived bias. This led to the adjournment of the hearing until Monday for the submission of this application. The former auditors – Jacques Andre van der Merwe, Danie Dreyer and Petrus Johannes Jacobus Bekker – are facing 340, 40 and 33 charges respectively. They were all directors of ACT Audit Solutions Incorporated at the time they allegedly committed the offences while Van der Merwe was also the managing partner of the firm. All three previously pleaded not guilty to all the charges against them. Read: Three former Sharemax auditors, 413 improper conduct charges Sharemax was not a Ponzi or pyramid scheme – attorney The planned filing of the recusal application follows Maritz last week expressing concern about some of the questions and statements that had emanated from the committee members, particularly Sorenzo Sooklal. Maritz said they are under the impression that these proceedings are to be conducted neutrally, fairly and that the committee members will have an open mind, be independent and reserve their judgment until after conclusion of all the evidence and after hearing all the arguments. ‘Bias’ However, Maritz said it seemed to them that they are labouring under a misapprehension as far as this is concerned because Sooklal had made pronouncements which are clearly indicative of wholehearted support of certain opinions expressed by Brian Smith, the expert witness for Irba in the hearing. Maritz earlier in the hearing also questioned Smith’s independence after it emerged that Smith was chair of Irba’s investigation committee from 2004 until 2016 and chairman of this committee from 2011 until 2016. Read: Independence of Irba’s expert witness at Sharemax hearing questioned Smith further admitted that during the time he was chair, this committee concluded the investigations into the conduct of the three audit practitioners, reached an opinion on their conduct and passed this on to Irba’s disciplinary advisory committee with a recommendation. “It seems to me on any objective view of your involvement there, that you are … a cog in the Irba machinery. You are disqualified as an expert because of your obvious lack of objectivity,” Maritz said. In regard to Sooklal, Maritz questioned if the defence team is to be confronted with a situation where mid-stream and long before the conclusion of the evidence, there is a committee member indicating acceptance of a particular witness’s evidence and rejection of any other witness’s opinion in conflict with it. “How can that be? Then the proceedings would become farcical. And it would amount to this ‘going through the motions’ in the form of window dressing. “It would mean that the result is a forgone conclusion and I am wasting my time here,” he said. “This is not how court proceedings or disciplinary proceedings and particular proceedings as important as the present are to be conducted.” Maritz said Sooklal was dismissive of many of the expert opinions expressed by Professor Harvey Wainer, a visiting Professor at the Faculty of Commerce at the University of Witwatersrand. Wainer was appearing as an expert witness for the three auditors. “It is most certainly at this stage our view that Mr Sooklal has disqualified himself completely from further participation in these proceedings,” Maritz said. ‘Full disclosure’ wanted Maritz said on Friday it had now become of vital importance to demand full disclosure by each member of the disciplinary committee of any or all interactions or contact with Smith, at any stage historically, preceding, leading up to or during these proceedings and full disclosure of any committee or committees any of the present committee members in these proceedings ever sat on with Smith. In response, disciplinary committee member Horton Griffiths confirmed that between 2007 and 1995 he was a member of the Irba investigating committee, initially as a member but subsequently as chair, and that Smith succeeded him as chair of this committee. ---------------------------------------------------------------------------------------- Sharemax chronicles continue: ‘Old people die, the fat cats laugh! Phillip De Wet 2 Dec 2016 Empty promises: Glynnis Morris has not seen any return from her investment. Every few months 70-year-old Glynnis Morris receives a letter from Frontier Asset Management. In broad strokes the letter tells her how well everything is going with Frontier’s sibling company, Nova Property, into which her entire R300 000 pension was forcibly invested. She no longer reads the letters. She goes straight back to figuring out how to get by on her R1 500-a-month government old-age grant. “It’s always the same letter, only the dates change,” she says. She has not seen a single cent from her investment for many years now, Morris says, no hint of the R3 125 monthly income — plus maybe some capital growth if the property market did well — she thought she was buying when she invested in the ill-fated Sharemax property syndication scheme in 2009. Instead she has seen many promises from the directors of Nova, which stepped in as the rescuers when Sharemax collapsed and took over Sharemax’s assets. In return for delivering that service to Morris and others, the directors of Nova each paid themselves an average of R4.9‑million in the past financial year. Morris has it better than most. She lives in a granny flat attached to the home of one of her daughters, and her two other daughters help her out with food “when I run out, which is often”. When the Mail & Guardian this week traced two other former Sharemax and now Nova investors, we found that one had died in March and the other had recently slipped into a coma. “This is what happens all the time,” said a relative of the latter. “These old people had their money taken. Now they don’t eat properly, then they get ill and they die, while the fat cats are laughing all the way.” The Nova directors — Dominique Haese, Rudi Badenhorst, Dirk Koekemoer and Connie Myburgh — deny they are anything other than businesspeople who work hard to manage the assets in which Sharemax participants had invested. But the difference between their rewards and those of the original investors is stark. This week, specialist financial website Moneyweb calculated that the four Nova directors’ combined R15.1‑million cash salaries in the past financial year were more than double the average earned by executives at most property management companies. Those cash salaries, Moneyweb said, represented 17% of Nova’s total cash receipts for the financial year. The four directors have near total control over how the company spends its money. After a legal battle stretching over several years to obtain the technically public register of Nova shareholders, Moneyweb last week revealed that the directors own 87.1% of the company, and have even greater voting rights thanks to a structure that reduces debenture holders to recipients of money and information as and when the four directors see fit. The directors value their shareholding, which in effect they received for free, at more than R1‑billion. Nova chief executive Haese played a pivotal role at Sharemax before it collapsed, and fellow director Koekemoer was also a director of Sharemax for several years. It is clear that directors pay themselves first from the company’s proceeds before any payments to the debenture holders they are responsible for, Moneyweb said. As a result, averaged over the past two financial years, Nova directors paid themselves out R3.6‑million each a year. The 31 000 debenture holders whose money they manage were paid an average of just less than R400 each. Average payments to debenture holders are a poor metric, because often the Nova directors do not see fit to provide. In the last communication Morris received, Nova was self-congratulatory about a 2013 decision “to reduce and/or cease projected monthly return payments” to debenture holders in favour of using the cash to refurbish shopping centres. Morris did not get any real say in the decision to pay her no interest, just as she was never really consulted when Sharemax morphed into Nova, or even on how her pension would be invested in the first place. In fact, she did not understand the mechanism of the investment. But then, nor did her investment adviser. Morris thought she was putting her money into The Villa, a large shopping centre to be built east of Pretoria. That sort of bricks-and-mortar investment suited her risk appetite — extremely low — as it did many pensioners, which seems to be the main reason Sharemax drew so many of their ilk. What her savings were actually buying, later perusal of a prospectus would reveal, was “an unsecured subordinated interest rate acknowledgment of debt linked to a share”. In the rush to get her money invested, that went over Morris’s head. Her investment adviser had been “hounding” her about when she would receive her pension lump sum, she recalls. The very morning it landed in her bank account he accompanied her to the bank, explained to the teller what she wanted, took the resulting cheque from the teller and had Morris sign some forms. Interrogation of the mechanism of the investment was limited. “I said to him: ‘Are you absolutely positive that I’m not being conned here?’ and he said: ‘No,’” she recounts of the 20-minute transaction. Investment advisers were notoriously keen on Sharemax, which paid very large upfront commissions: like the current Nova directors, advisers got paid regardless of whether the risk their clients were taking paid off. And some, like Morris’s adviser, had no understanding of that risk, the office of the ombud for financial services providers, known as the FAIS ombud, has consistently ruled. “It is apparent from [Morris’s advisor’s] version that he had no idea just what the investment was about and, as such, could not appreciate that the complainant was lending money to an entity, which entity would in turn lend the funds to a developer, leaving investors with no form of security whatsoever,” ombud Noluntu Bam ruled in Morris’s case this August. There was also the small detail that the shopping centre Morris was supposedly investing in had not yet been built and could therefore not generate rental income to pay her 12.5% interest — the promised payments could only come from the investments of other people. Although Sharemax has never been found by a court to have been one, that is the common structure of all Ponzi schemes. The FAIS ombud ordered Morris’s adviser to repay her investment in full, under rules that make advisers liable for losses incurred because of their negligence. For a short while it looked as if she would get back her savings. Then she was notified that her adviser had appealed against the ruling. That leaves only the chance that the four well-paid directors of Nova will see fit to direct some money her way. But she is not overly optimistic, and she is not alone. “The investors who complain to this office have received no credible information as to the steps that are being taken to repay their investment,” Bam wrote in May about another Sharemax-related complaint. “Most investors see incomplete and ghost buildings all around, with no suggestion that they will ever recover their money.” But in a June letter the Nova board told Morris that the various hurdles to cashing in on her partially built shopping centre were “constantly being addressed by the board” — just as it has been telling her since at least 2014. Nova did not answer detailed questions. Earlier this week, chief executive Haese told Moneyweb she would no longer provide information because it “will be twisted and used out of context for the purpose of further negative reporting”.