This article was edited after initial publication to take account of the following:
Before publication, EOH did not reply to the allegations we had put to it. Shortly after publication, it issued a statement (included at the end of the article) stating that its "track record, reputation and integrity have been impeccable".
Since then, amaBhungane, EOH and the latter's new chief executive, Zunaid Mayet, have had a series of engagements. EOH responded to our pre‐publication questions and showed us many documents. It also outlined specific concerns in a letter.
While the relationship between Social Development Minister Bathabile Dlamini’s close acquaintance and an EOH executive was corroborated during these interactions, we found no evidence that either EOH or the executive acted unlawfully. Our edits address EOH's concerns in light of the new information it provided.
A shadowy middleman who connects Social Development Minister Bathabile Dlamini to grants contractor Cash Paymaster Services (CPS) has been living in a R65‐million mansion owned by a director and an executive from JSE‐listed group EOH.
In recent years, EOH won at least R300‐million in social development IT contracts and was positioning itself to become a central player in a future social grants distribution system.
We have seen no evidence that EOH or its two officers acted unlawfully in winning these contracts.
The shadowy middleman is Lunga Ncwana, who once channelled late fraudster Brett Kebble’s millions to the ANC.
AmaBhungane previously revealed that Ncwana is in regular contact with minister Dlamini and is best friends with CPS’s BEE partner Brian Mosehla. CPS’s parent company, Net 1, handed Mosehla R83‐million in cash in 2014, apparently in return for nothing.
Now Ncwana’s links to the two EOH officers underline those concerns that he might have used his proximity to Dlamini to influence her decisions in favour of private businesses – although we have seen no evidence that Ncwana abused his proximity to the Minister to favour EOH in this way.
A number of officials have already claimed he whispers instructions into Dlamini’s ear. Recently, South African Social Security Agency (Sassa) CEO Thokozani Magwaza and former social development director‐general Zane Dangor said that Dlamini created a “parallel governance structure” by hiring outside consultants.
These so‐called “work streams” reported directly to her, bypassing Sassa officials.
Dangor, who resigned over the disagreement, and Magwaza submitted sworn affidavits to the Constitutional Court blaming Dlamini and her work streams for the grants payment crisis and disputing Dlamini’s version, which pointed the finger at Sassa officials.
While Dangor, national Treasury and others wanted future grants to be paid using commercial banks and the Post Office, Dlamini has pushed for a proprietary system, which would appear to favour private technology firms.
EOH was one of several bidders that made proposals to Sassa for a proprietary payment system which it has subsequently withdrawn.
None of EOH, Ncwana, Dlamini or Sassa responded to amaBhungane’s questions before publication.
EOH is an exciting IT firm. Of its peers, it has the highest broad‐based black economic empowerment rating and has grown exponentially over the past decade, mostly by gobbling up smaller companies. It earned R12.7‐billion last year.
One of the firms it bought was owned by father and son Danny and Jehan Mackay. Danny was given a seat on EOH’s board and Jehan was appointed as an EOH executive. They took a 5% stake in EOH.
Following publication of this article, Jehan was promoted to serve on the main board of EOH. Jehan Mackay’s job was to get EOH more public sector contracts.
One of his early successes was an R11‐million contract with Sassa, migrating it from one IT system to another. EOH also picked up numerous contracts with other state institutions.
By early 2016, Sassa had awarded EOH contracts worth R300‐million, Dlamini disclosed in Parliament in March 2017. According to one person, EOH employees who deliver IT services to SASSA, occupied most of a floor at Sassa’s Pretoria headquarters.
Early this year EOH responded to Sassa’s “request for information” from companies that wanted to play a part in distributing social grants for Sassa in future.
EOH company material suggested it hoped to be a key player in providing technology. It also bid for a Sassa biometric verification tender, although this was unsuccessful.
After amaBhungane published this article, EOH announced: “EOH has no intention of getting involved in the future, in the distribution and payment of social grants for SASSA.”
The Mackays, who started their IT business in 2000, appear to have made a lot of money. From 2014, they snapped up a handful of luxurious Atlantic seaboard and Sandhurst homes, each worth between R65‐million and R111‐million.
The most expensive of their properties is known as “The Pentagon”.
The designer mansion has unbeatable views of Cape Town’s Atlantic Ocean and the Twelve Apostles, and the Mackays have claimed that they can rent it out over the festive season for R150,000 a day.
One person who knows Jehan says he lets South African “leaders” stay at their houses. This might grease the wheels of doing business, the person suggested.
In June last year, Jehan married the popular South African fashionista and model Sarah Langa‐Heaton at a “traditional” wedding in Johannesburg. In December, they followed it with a “white” wedding.
A “who's‐who of Johannesburg's social scene” reportedly attended the ceremonies.
AmaBhungane identified two of them – Dlamini’s friend Ncwana and his best friend Brian Mosehla, CPS’s BEE partner.
They appear to be present in one wedding photograph, and a number of people who know them confirmed it was them:
In 2012, Sassa awarded CPS the first ever five‐year contract for one company to distribute social grants throughout the country.
But the tender has been dogged by allegations of corruption, and Sassa so badly botched it that, in 2013, the Constitutional Court ruled that CPS’s contract was invalid.
To ensure that grant payments were not interrupted, however, the court allowed CPS to keep its contract until it expired at the end of last month. Sassa promised the court it would take over the grant payments itself from April 1.
However, Sassa and Dlamini did very little and by late last year it was obvious they had no viable plan to pay grants without CPS.
Former social development director‐general Dangor and others have accused Dlamini of causing a “self‐created emergency” to ensure that CPS got to keep its contract.
Things came to a head in March 2017 when the Constitutional Court ordered that, with no other choice, CPS’s invalid contract should be extended by a year and launched an inquiry as to whether Dlamini should be held personally responsible for the mess.
Late last year amaBhungane exposed how, in CPS’s bid for the 2012 Sassa contract, it tendered a BEE partnership that was little more than an empty front featuring two of Ncwana’s friends.
A number of officials, politicians and businesspeople have alleged that Ncwana often met and travelled with minister Dlamini and that he advised her on official Sassa decisions.
But CPS quietly shelved its initial BEE partnership and signed on Ncwana’s friend and business partner Mosehla as its new BEE partner. In the process, CPS’s parent Net 1 paid R83‐million into Mosehla’s personal bank account; the proceeds of a convoluted BEE deal. Dividends presumably still flow.
Mosehla was Ncwana’s best man when the latter also married a model. Like Jehan Mackay, Ncwana’s wedding attracted a “who’s‐who” crowd. This one included minister Dlamini and president Jacob Zuma’s lawyer Michael Hulley.
For his part, Hulley has also featured at numerous suspicious moments in Sassa’s tortured relationship with CPS.
Dlamini would not comment on her and Ncwana’s relationship when approached by amaBhungane late last year.
At the same time in late 2016, amaBhungane tracked down Ncwana to the exclusive suburb of Fresnaye, Cape Town, where he lived with his wife Rosette, nestled against the band of eucalyptus trees that skirts Signal Hill.
Marketing images online – the house was recently advertised to be sold for R75‐million – show huge west‐facing windows, wide open decks, what looks like a dance floor and a perfectly trimmed pitch of green grass flanked by a long L‐shaped pool. It all overlooks Sea Point, Green Point and Robben Island.
Asked to discuss his relationship with minister Dlamini, Ncwana told amaBhungane to “fuck off” and had two men escort the reporter to his car.
Deed records showed that the property was owned by Tactical Property Investments. Its directors are Danny and Jehan Mackay, the EOH officers.
A number of people told amaBhungane that Ncwana had boasted he “owned” the Fresnaye house, even though it was registered to the Mackays’ company, which bought it for R64.8‐million in 2014.
Before this article was originally published, amaBhungane e‐mailed Jehan Mackay detailed questions. He sent a text message later, saying: “Got it … this issue has been a thorn in my side.”
He inserted a see‐no‐evil monkey‐face emoji and continued: “Happy to chat later... will call soon as I'm available.” He ignored all further calls, e‐mails and text messages.
Since then, EOH and Jehan have responded in detail.
It emerged that Ncwana contracted to buy the house in November 2015. He moved in promptly, even before the contract was concluded, and he agreed to pay a monthly rental of R185,000 (ex VAT; the agreement was between two VAT‐registered companies) until he was ready to buy the place.
He duly paid his rent for ten months, but then he stopped – and his wife and he continued to live there for another eight months, without paying the rent.
In April 2017 the Mackays booted the Ncwanas from their palace and sold it to Sol Kerzner’s son.
AmaBhungane calculated that Ncwana saved himself R1.5‐million (ex VAT) while not paying rent. Meanwhile, the Mackays missed at least one opportunity to lease the house for R600,000 for just one month. This was according to emails the EOH showed amaBhungane.
Despite this enormous opportunity cost for the Mackays, they only had “oral discussions” with Ncwana about his arrears. And before they sold the house, they obtained Ncwana’s “blessing” through their agent, the emails showed.
Three months after this article was originally published, Mackay’s lawyers sent Ncwana a letter of demand for the outstanding rental.Since publication, EOH and Jehan have both insisted this was nothing more than an arms length relationship.
17 April 2017
EOH response to the article carried by amaBhungane on 13 April 2017
EOH has noted a media article carried by amaBhungane on 13 April 2017, making mention of false and unfounded insinuations relating to EOH.
We would like to place the following facts on record:
EOH is not and has never been involved, in any way whatsoever, in the social grant payment contract between the South African Social Security Agency (SASSA) and Cash Paymaster Services (CPS), a subsidiary of NET1.
EOH has no intention of getting involved in the future, in the distribution and payment of social grants for SASSA. All EOH’s current and previous services provided to SASSA have no relevance whatsoever, to the payment or distribution of social grants.
EOH has been a service provider to SASSA for 8 years, and proud of its track record and quality, depth of skills and expertise it provides; all services provided to SASSA were awarded on merit, after having undergone open and transparent tender processes in compliance with the Public Finance Management Act (PFMA).
EOH has no relationship, and has not had any relationship whatsoever with Mr Lunga
Ncwana, a person mentioned in the article, and he has never worked for EOH.
EOH is a proudly South African business and the largest technology services organization in Africa. The JSE‐listed group has strong empowerment credentials and with its 12,500‐strong workforce is characterised by excellent delivery capability, great people and a strong culture.
EOH is guided by its long‐stated purpose which is:
“To provide the technology, knowledge, skills and organisational ability critical to development and growth of the societies we operate in. We are an ethical, relevant force for good and we strive to play a positive role in our society, beyond normal business practise”.
EOH provides a broad range of technology solutions and innovation to clients in South Africa and internationally, covering many aspects of society and the economy, and geared towards supporting the developmental agenda our country.
EOH operates across a diversity of industry verticals with about eighty percent of its revenues coming from the private sector, and the rest from the public sector.
In keeping with its purpose, EOH launched the “EOH Youth Job Creation Initiative” five years ago, which to date, has resulted in the creation of over 20,000 jobs for our youth.
EOH’s track record, reputation and integrity have been impeccable since inception nineteen years ago.
EOH supports a free press as one of underpinning the tenets of an open democracy and similarly call on journalists to exercise due care when reporting.
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