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News24
9 hours ago
- Business
- News24
Who went to Paris with Paul? Tenderpreneur joined Mashatile's France-SA business trip
Sibuyile Magingxa, Johannesburg's water tanker tenderpreneur, was part of the delegation that joined Deputy President Paul Mashatile in Paris. Also present was musician Lesedi Phala, who is Magingxa's romantic partner and allegedly the niece of SA's ambassador to France, Nathi Mthethwa. Attempts to obtain clear answers on who invited them resulted in a comical loop of referrals and evasions from Mashatile's office, the Department of International Relations, and the Department of Trade and Industry. In May, a South African delegation led by Deputy President Paul Mashatile travelled to Paris for the South Africa-France Investment Conference. The message was clear: South Africa was open for business and eager to attract foreign investment. But while ministers and diplomats delivered speeches about transparency and reform, social media told another story. Photos and videos revealed that two people, Sibuyile Magingxa and Lesedi Phala, were in attendance, despite not appearing on the published list of private sector delegates. Magingxa is one of the two tenderpreneurs at the centre of Johannesburg's R263-million water tanker contract, which is currently the subject of an internal investigation, while Phala - a former Miss South Africa contestant and musician - is his romantic partner. Our research suggests she is also the niece of South African Ambassador to France Nathi Mthethwa. Although Magingxa and Phala did not appear on the list of 80 delegates published by the French hosts, they were nevertheless present at key events and appear to have enjoyed unfettered access to South Africa's international charm offensive. A video Magingxa posted on Instagram seemingly shows him walking a few steps behind Mashatile when he was greeted by dignitaries and ministers at the Hôtel d'Évreux in Paris on 21 May. Photos posted by Phala on Instagram show her posing separately with both Mashatile and Mthethwa at an evening reception hosted at the South African Embassy a few days later. It's important to point out that taxpayers did NOT pay for Magingxa and Phala's trip - they covered their own flights and accommodation costs - but as delegates, they were invited to official dinners, receptions and events that were not open to the public. Their presence - and the efforts of different departments to avoid explaining it - offered a rare glimpse into how influence truly operates in the South African political ecosystem: quietly, and often without accountability. Fingerpointing When we first received a tipoff about Magingxa and Phala's Paris jaunt, we asked Mashatile's office and the Department of International Relations and Cooperation (Dirco) for an explanation. After days of Dirco ghosting us, Mashatile's spokesperson, Keith Khoza, forwarded us what he told us was the department's response: Dirco plays an integral role in reviewing, advising and endorsing government delegation compositions … [Magingxa and Phala's] participation and roles were aligned with the objectives of promoting private sector involvement in South Africa's economic diplomacy. The delegation included some heavy hitters: the CEOs of Eskom, Transnet, the Industrial Development Corporation, the Development Bank of South Africa, Sygnia, and Bigen, as well as senior executives from MTN and VW. So where, we asked, did a controversial tenderpreneur and a social media influencer fit in? But when we returned to Dirco with further questions, it disowned Khoza's response. Instead, spokesperson Clayson Monyela told us that Dirco was not involved in the decision on who to invite and referred us back to Mashatile's office, which then referred us to the Department of Trade, Industry, and Competition (DTIC) … which then referred us back to Dirco. At every stage, officials pointed elsewhere, and no single department accepted responsibility for answering our questions. This recursive loop of referrals did not clarify anything; it instead created a fog of unaccountability, where responsibilities were acknowledged in passing but never fully owned. It would be comical, if it were not so revealing. Invitations without records With no one willing to own the decision to invite Magingxa and Phala, we reached out to Mthethwa, who has been South Africa's ambassador to France since 2024 and, it is alleged, is also Phala's uncle. According to the embassy in Paris, most of the private sector delegates had been handpicked, but 10% - including Magingxa and Phala - reached out to the embassy directly to request invitations. 'Their participation stemmed from an open and inclusive invitation extended to entities in the private sector whose interests aligned with the investment and trade objectives of the SA-France Investment Conference,' the embassy told us in an official response from Mthethwa. The explanation might have held up had there been any official public call for South African businesses to participate in the first place. AmaBhungane searched for one. We asked for it. None was produced. There was no announcement from Dirco, no statement from the DTIC, and no trace of it on the embassy's platforms. In fact, the only public call we could find was a post from the French Chamber of Commerce in South Africa, inviting South African companies to attend the conference, which said it was an initiative of 'the South African Embassy in Paris, in collaboration with the Office of the Deputy President of South Africa, Mr Paul Mashatile'. In its initial response, the embassy told us that 'any qualifying entity that approached the embassy and met the criteria received an invitation to participate', adding that Magingxa and Phala's inclusion 'was not a result of any personal intervention or nomination by Ambassador Mthethwa'. The embassy said: Any suggestion to the contrary is unfortunate, demeaning and must be repudiated as it seeks to impugn the person of the ambassador. But if they had somehow missed the 'exiting news' on the French-South African Chamber LinkedIn post, South African small businesses had no such window. The only 'application' process, it appears, was knowing whom to call and when. It also seemed strange that neither Magingxa nor Phala's names appeared on the list of 80 private sector delegates published by the French hosts. But again, the embassy was ready with a response: 'It is important to clarify that neither Ms Phala nor Mr Magingxa confirmed their attendance on time, and as a result, they were not included in the final list of confirmed participants.' However, when asked for the final list of delegates, the embassy refused, claiming the list was 'proprietary and privileged'. No vetting The embassy told us any qualifying entity that asked to be included in the delegation for Mashatile's trip got the green light. So, we asked, who qualified? 'The conference brought together state-owned enterprises [SOEs], large corporates, medium-sized companies, black industrialists, small, medium and micro enterprises [SMMEs], women-owned businesses, and enterprises owned and managed by the youth,' the embassy told us. 'The entities linked to Ms Phala and Mr Maxingxa meet the criteria mentioned above and operate across the key sectors of the South African economy.' But do they? Phala is listed as a director of four companies - Novo Shi, Law and Life, Letha Ukuthula Holdings, and Luxxo Enterprises - but none of them seem to have any public profile or operational footprint. Instead, her public profile is linked to her work as a model, influencer and musician. AmaBhungane sent detailed questions to Phala about the Paris invitation, her company roles, and ties to Mthethwa. She did not respond to questions sent to her. Magingxa is more active in business, but he is no ordinary entrepreneur. He is a director of Nutinox, a company awarded half of a R263-million contract by Joburg Water in 2024 to provide water tankers to the City. After amaBhungane raised questions about potential collusion in the tender, Joburg Water told us it had launched a formal investigation. A familiar face One name on the official delegate list that did catch our attention was Xolisile Guqaza, a businessman from the Eastern Cape who, in 2013, was one of four people accused of defrauding the Department of Arts and Culture of R2.5 million by claiming to have booked singer R Kelly for a fake performance. According to reports, money flowed through shell companies, and Guqaza was seen ducking photographers in court by hiding under a paper bag. The case was withdrawn in 2016 at which point Guqaza had established a new business, Zoliset, that rents equipment to mines and water tankers to municipalities. When we investigated the R263-million water tanker contract, we found signs of possible collusion between the bidders: the two winning bidders, Magingxa's Nutinox and Builtpro, run by 27-year-old Emmanuel Sserufusa, who previously shared an address in Johannesburg. But Builtpro had also appeared to share an address with another unsuccessful bidder: Zoliset. When we contacted Guqaza in November 2024, he denied having any business ties to Nutinox or Builtpro. He described the address his company shared with Builtpro as a multi-tenant office park and said he was unaware of the other companies operating from the location. Yet photos from Magingxa's Instagram account show that the trio are well-acquainted: both Magingxa and Sserufusa were photographed at his homecoming event in December 2024, and after Mashatile's official trip ended, Magingxa posted photos of himself, Phala and Guqaza at the Monaco Grand Prix. 'This time around, I would like to respond to these questions in person,' Guqaza wrote to amaBhungane in response to the questions sent to him. 'Call me so we can confirm the time and venue for our meeting.' We offered to set up a Zoom meeting, but Guqaza declined and did not take us up on the offer to extend the deadline for a written response. Supplied. The R263-million tender As far as we know, the R263-million Joburg Water tender remains under formal investigation. In February 2025, Mayor Dada Morero announced a probe into the deal following amaBhungane's reporting. But since then, efforts to obtain updates from the City or MMC Jack Sekwaila have led nowhere. AmaBhungane has since uncovered that Magingxa and Sserufusa jointly operate a third company, M and S Traffic Services. According to the company profile, Magingxa is listed as chief executive officer and Sserufusa as chief operations officer - concrete evidence that the two winning bidders did not just share an address but have been in business together. In February 2025, we wrote to Joburg Water describing the document we found, which pointed to possible collusion in the tender. It responded that once it became aware of the media allegations, its internal audit department was tasked with investigating the matter, and the investigation is ongoing. AmaBhungane sent detailed questions to Magingxa and Sserufusa about their business dealings and potential links to the R263-million water tanker contract. Neither responded to the questions. Free pass? If the embassy had Googled Magingxa, our December 2024 investigation would likely have been the first result that came up. And the images we found show Magingxa and Phala were not just casual observers. They were moving in spaces reserved for South Africa's official face to the world. But this cuts no ice with the embassy. 'The embassy administration does not have the capacity to conduct probity checks of companies that requested participation,' it told us. When we asked whether any other arm of government had vetted the delegates who would have direct access to the deputy president and the other ministers on the trip, the embassy got defensive: 'Please explain why any vetting was required?' it wrote. It added: We are not aware of any delegate who has been found guilty of any wrongdoing. But considering that the whole point of the trip was to sell South Africa as a place where French companies could do business, was this the face of South African business that we wanted to show? 'There is no delegate who was crowned as the face or representative of South African business. This is your creation entirely,' the embassy told us in a follow-up response, adding: 'Please accept that your subjects of interest were not the focus of the conference.'
News24
15-05-2025
- Business
- News24
More than R4 billion flowed to dodgy water contracts, SIU probe finds
Two companies, Blackhead Consulting and LTE Consulting, are at the centre of a Limpopo water contract that paid out R4.1 billion from an initial budget of R90 million. Blackhead was also involved in the Rooiwal wastewater treatment works upgrade project in Pretoria, the failure of which contributed to the Hammanskraal cholera outbreak in 2023. These are just two of 14 investigations into the sector by the Special Investigating Unit since 2008. Four criminal cases have been referred for prosecution by the Special Investigating Unit (SIU) after a probe into the failed Rooiwal wastewater treatment works upgrade in Tshwane, GroundUp reports. The four cases involve Blackhead Consulting, which was part of a joint venture company contracted by the City of Tshwane for the Rooiwal upgrade. Blackhead is owned by Edwin Sodi, who is one of 17 accused in the ongoing Free State asbestos trial. Blackhead Consulting has also been at the centre of another SIU investigation into the raising of the Tzaneen Dam wall. Together with LTE Consulting, Blackhead is fingered in irregular contracts amounting to more than R4 billion. In the Rooiwal upgrade, Blackhead was in a joint venture with CMS Water Engineering and NJR Projects, but the urgent refurbishment was not completed as the contractors abandoned the site, resulting in the municipality terminating the contract in July 2022. At that point, R147 million had been paid to the joint venture. The total contract amount was R291 million. The failure to upgrade Rooiwal, which is not properly treating sewage before releasing almost 300 million litres of effluent into the Apies River per day, contributed to the deadly 2023 cholera outbreak in Hammanskraal, which killed 29 people. Blacklist But, the SIU revealed in its report to Parliament's Water and Sanitation Portfolio Committee, Blackhead has still not been placed on the National Treasury's blacklist of companies that may no longer do business with the state. This is in spite of a request by the City of Tshwane to the Treasury in February last year. Blackhead was also embroiled in the Free State asbestos corruption scandal involving former Free State premier Ace Magashule. When GroundUp reported on this last year, the Treasury stated that the City of Tshwane had not followed the process necessary to prevent Sodi's company from doing business with the state. Treasury's 'media unit' stated Treasury had communicated this to Tshwane, but had received no response. GroundUp has sent questions to the City of Tshwane on this matter, but has received no response. Questioned by MPs on the portfolio committee, SIU head Andy Mothibi said the SIU had referred the companies involved in the Rooiwal debacle to the Department of Water and Sanitation (DWS) so that the department could get them blacklisted by Treasury. Mothibi said the DWS was responsible for this 'administrative action', but the SIU had engaged with Treasury to 'find out how far these blacklistings are'. 'Some have [been blacklisted], some not. We will continue to engage to ensure they are blacklisted,' he said. Water and Sanitation Minister Pemmy Majodina said the department could not get the company blacklisted while it was still under investigation. An investigation did not exclude a company from procurement, she said. This was one of a number of 'gaps in law', she said. MP Visvin Reddy (MK) said this was 'the crux of the problem'. 'These companies, like LTE and Blackhead, it's not something they did yesterday. They've been under investigation for quite some time.' Reddy bemoaned the fact that investigations went on 'for years' while the companies continued doing business with government. Procurement for pals Blackhead Consulting was also part of an SIU investigation into the contract awarded by Lepelle Northern Water for the raising of the Tzaneen Dam Wall. The SIU found Lepelle Northern Water, which is a public water utility, made it impossible for competitors to quote on the job. In its presentation, the SIU said the water utility gave professional service providers just eight hours to respond to a request for quotations for raising the dam wall. Further, the quotations had to be handed in at the water utility's offices in Polokwane, but all the service providers who received the documents were based outside of Limpopo. ALSO READ | SIU freezes pensions, assets of 2 key players in botched R3bn Limpopo water tender This was despite the fact it was not an emergency project, having been part of DWS planning since 2012. The SIU found that although the project was awarded to LTE Consulting, it was later passed on to Blackhead, and that 'there is a relationship between the directors of the two companies'. Blackhead was not on the DWS panel of preferred service providers. Between March 2016 and September 2017, Blackhead invoiced the water utility for R93 million, but the SIU is instituting civil litigation to set aside the contract and recover the money. In 2022, when this photo of containers lined up at a communal tap in Ga-Abele village was taken, villagers said there had been no water in the tap for up to three weeks at a time. The situation has not changed, and the SIU is seeking to have the contract declared Kekana/GroundUp The general manager of operations at Lepelle Northern Water was dismissed in December 2023 following a disciplinary hearing, and the outcome of a disciplinary hearing against the supply chain management manager is awaited. Another member of the bid evaluation committee was dismissed following a disciplinary hearing on an unrelated matter. Ballooning budgets LTE Consulting was also found to have been irregularly appointed by Lepelle Northern Water for the refurbishment of the Giyani water and wastewater scheme, and the Mopani water and wastewater scheme. LTE was initially appointed in August 2014 for the Giyani project at an amount of R90 million. A month later, the investigation found, Lepelle Northern Water issued LTE with another appointment letter for the Giyani project, now with a total estimated cost of R2.2 billion. A month after that, in October 2014, Lepelle Northern Water issued another letter to LTE, this time folding the Mopani project into the deal. The initial appointment in August 2014 was through a deviation from normal procurement processes, and the later project cost increase of more than R2.1 billion was without an approved budget plan, and contrary to directives from the minister. READ MORE | Ramaphosa sets SIU on eThekwini again - this time to probe fraud relating to water and sanitation The SIU further found that Lepelle Northern Water paid an additional R1.9 billion to LTE. Beyond the lack of budget and ministerial approval, the contract with LTE was irregular and unlawful as the company was not registered with the Construction Industry Development Board, as required, and thus could also not appoint contractors for what was a turnkey project. The SIU 'identified a corrupt relationship' between the Lepelle Northern Water officials, service provider and department officials, in a deal in which Lepelle Northern Water paid 'approximately R4.1 billion to the service provider, which far exceeds the original contract value of R2.2 billion', stated the report to Parliament. Among the findings by an independent quantity surveyor appointed by the SIU, was that LTE charged more than R7 million to drill five sample boreholes, and charged R2.5 million for water purification plants that did not work. The full assessment found costs had been inflated by just under R900 million. The resulting civil litigation to declare the contract unconstitutional and reclaim the money paid, was filed in the High Court in 2018. It is due to be heard in the Limpopo High Court in Polokwane at the end of July this year. Billions for Zuma's War on Leaks In its presentation to Parliament, the SIU provided details of nine investigations into water and sanitation projects that had been concluded, emerging from proclamations from 2008 to 2023. Information on a further five ongoing investigations under proclamations from 2022 to 2025 was also provided. Another investigation involving R2.2 billion, under proclamation R164 of 2024, involves three programmes initiated by the DWS. One of the programmes, the 'War on Leaks', launched by former president Jacob Zuma in 2015, in which thousands of young people were to be trained by Rand Water and the Energy and Water Sector Training Authority to combat water leaks, ballooned from a R2.2billion budget to expenditure of R4.7 billion. READ | SIU fails to get interim interdict to stop Lepelle Northern Water employee from drawing pension The SIU reported that R40 million of R1.7 billion paid to Rand Water was in 'unexplained and unsubstantiated contingency fees'. Additionally, 29 'roleplayers' (including officials, private individuals and entities) have been identified for investigation. The most recent investigation, into the eThekwini municipality, following a proclamation in February this year, is related to allegations of serious maladministration in the provision of water and sanitation services to schools and homes. The allegations stretch back to 2015. Cleaning house The DWS told Parliament it supported the SIU's investigations and welcomed the establishment of the Water Sector Anti-Corruption Forum to be launched on 14 May. Majodina said the department didn't 'leave any stone unturned on issues and matters that have been referred to the department' by the SIU. Deputy Director-General Nthabiseng Fundakubi told Parliament there had been no unauthorised expenditure by the department since the 2018/19 financial year. Irregular, fruitless and wasteful expenditure had been drastically reduced. In 2018/19, irregular expenditure was at its highest, at R2.5 billion. Fruitless and wasteful expenditure in that year was at R60 million. ALSO READ | Lepelle responds to allegations of unfinished water project for which R9m was paid Fundakubi said internal forensic audits since 2019/20 had led to 446 allegations of financial misconduct being investigated, and 326 of them were found to be valid. She said an additional 73 cases were under investigation and seven cases that had been received recently were yet to be investigated. She said the resulting disciplinary processes had led to various sanctions. These included dismissal, demotion, suspension without pay, and written warnings. The cases had resulted in R1.3 million being recovered so far, and a judgment of R27.5 million in favour of the department. Additionally, SIU investigations had led to R459 million being returned to the department from companies involved in irregular contracts, with R77 million of this yet to be paid.
