Mhlathuze Water (MW) is a state-owned entity established in 1980. It reports to the Department of Human Settlements, Water and Sanitation. It is based in Richards Bay and operates in the Province of KwaZulu Natal. The entity predominantly operates in the uMkhanyakude, King Cetshwayo and Zululand District Municipalities but has plans to expand beyond these geographies.
Mhlathuze Water is supplied by three dominant water sources namely: Mhlathuze River, Lake Mzingazi and Lake Nsezi. The organization’s business activities include raw (untreated), clarified (partially treated) and purified water supply; disposal of industrial and domestic waste water; and scientific services The organisation provides these bulk water services in a sustainable and cost-effective manner. The organisation’s major clients include: Foskor, Richards Bay Minerals, City of uMhlathuze and Mondi.
VARIOUS PAYMENTS WERE MADE INTO VARIOUS FRONT COMPANIES DURING THEIR RELATIONSHIP
The state capture commission heard on Monday how former Mhlathuze Water board chairperson Dudu Myeni was close to a “Mr X”, whose company was allegedly used as the bridge of a looting scheme to siphon money from the water authority.
One such payment was R2.39m paid to Isibonelo in 2015.
17 February 2020 – State Capture
Looting MW board – SAA – RDP housing projects in Free State Corporation
The Zondo commission is expected to hear testimony related to allegations of corruption at Mhlathuze Water in Richards Bay on Monday, when Thalente Myeni takes the stand. 17 February 2020
It was explained that the key witness referred to only as ‘Mr X’ has testified in an undisclosed location about corruption allegations involving the Richards Bay based state-owned water supply company, Mhlathuze Water. The witness was referred to as Mr X because he fears for his life and had asked the commission to protect him.
The commission heard how Dudu Myeni, then a former board chairperson of Mhlathuze Water board, threatened Mr X’s daughter after she heard that he had been cooperating with the commission. Mr X is the owner of Isibonelo Construction a construction company that operated in Richards Bay, KwaZulu-Natal. Earlier, the commission had heard that Isibonelo Construction had received a total of R3 million payments from Premier Attractions 1016 – a company owned by Thalenthe Myeni, Dudu Myeni’s son.
The payments took place between October 2015 and February 2016. The amounts varied from R1 million each. Faced with questions regarding the payments, Myeni Junior had earlier said the transactions had been part of a usual business transaction. “In respect to Isibonelo, the transactions were business transactions. I have no record of the nature of the transactions. I have no record of the business (transactions) made with the said company due to the passage of time,” he said
However, the commission’s witness, Mr X will dispute this account in his submissions. Mr X explained to the commission on that Isibonelo had done various work in KZN and that it had provided JoJo Tanks to an area in KZN in 2014. He said he had obtained the contract after contacting Myeni. He explained that he and Myeni had had a long standing relationship over the years. Mr X explained his friend, a Mboniseni Majola, had approached him in early 2015 asking that he provide his banking facilities of Isibonelo so that he and his “boss” could transfer funds through the company’s account. Majola was a project manager at Mhlathuze Water.
“A friend of mine had asked me for help with regards to funds that they wanted to access with his boss. Boniseni Majola is the friend’s name. I did not ask him (Majola) how the scheme would work because he is more educated than me. He said he would give me the account number that I must pay the money to,” Mr X explained. Mr X explained that Majola had used Isibonelo’s banking facilities as a payment area for construction engineering companies. The engineering companies who provide false employment letters to Isibonelo and would then transfer various amounts of money. He told the commission that he then was instructed to make payments to various banking accounts, which had never done business with Isibonelo.
Mr X explained that Majola had worked with a colleague to draw up fake invoices that would make it seem like Isibonelo was being paid for funds it did not render. This was to disguise the transactions which took place between 2013 to 2016.
He made payments to other companies from funds provided by the engineering companies. He wanted to be seen as a person who can be trusted and would look at the money and everything was done with secretary and would not touch that money.
Daily Maverick also reported about Mr X as key witness, that was an in-camera witness, continued his testimony on how the Mhlathuze Water Board was allegedly looted by a senior executive. On Tuesday he claimed his company laundered cash for alleged delinquent director Dudu Myeni.
“I would go to the houses and hide the money without telling the domestic worker and then I would call her (Dudu Myeni) and tell her. I would hide the cash in the office with the files. Sometimes, I would change the spot,” the in-camera witness, Mr X, testified at the Zondo Commission. He also revealed how he cashed allegedly laundered money for Dudu Myeni and paid it over to her either in cash or in different spots in two of her Richards Bay, KwaZulu-Natal homes.
The money also came from contracts that Myeni subcontracted to Mr X whom she has known since 1997 when she first facilitated a contract for him to supply Jojo Water Tanks to the Mhlatuze Water Board for the Nkandla municipality.
Myeni was chairperson of the Mhlatuze Water Board where her reign was more chequered even than her time at the helm of SAA, for which she is facing delinquent director charges in a case brought by OUTA and the SAA Pilots Union. That case is also continuing this week.
For two days, Mr X has revealed how his company laundered cash out of the MW board in a system allegedly masterminded by Myeni and by Mboniseni Majola, a former executive and engineer at the board.
Under cross-examination by Advocate Kate Hofmeyr, Mr X has revealed at the State Capture Commission of Inquiry how the accounts of his company, Isibonelo Construction, were used to launder millions of rand in transactions into and out of his account into four construction and engineering companies, the most well-known of which is Stefanutti Stocks.
Stefanutti Stocks has refused to provide an affidavit stating its version of events to the State Capture commission, said Hofmeyr on 17 February 2020.
In hours of testimony on February 18 2020, Mr X revealed how Majola had created fictitious invoices for his company which he would dictate to Mr X’s secretary. He would then take the invoices, get them authorised at the Water Board and cash would pour into Isibonelo’s accounts.
Majola would then tell Mr X who to pay the money out to in a classic example of money laundering. The amounts totalled roughly R10-million. South Africa’s water boards provide the infrastructure for water supply and also oversee the country’s dams.
Mr X on February 17 2020 made an application for his evidence to be heard in camera because Myeni had twice called his daughter to ask why he was making trouble. In a first call, Myeni had said, “Why is your father selling us out?” and in a different call, she had asked why the woman’s father was “telling everyone” how the “facilitated funds” had been paid.
On 17 February 2020, Myeni’s son Thalente Myeni appeared before the State Capture commission under subpoena and testified that his company Premier Attraction 1016 had received contract payments for work he could not recall.
Funds had been paid from Premier Attraction into Mr X’s accounts and were then diverted into payments to the Jacob G Zuma Foundation where Dudu Myeni remains chairperson.
She had also requested cash payments from those funds, testified Mr X. On Tuesday (February 18 2020), Mr X said he had made cash such payments to Myeni on different dates and in different amounts. These requests did not surprise him as she would often use his business to carry out work on the contracts she won or she would use his business as a front. She would phone him to let him know when deposits would be made.
On one occasion, Myeni had requested he withdraw R1-million in cash but he could not as his bank did not allow big cash withdrawals.
The pair became close friends from 1997 when she first assisted him with a contract. “We got very close to the extent where we became kind of related,” said Mr X through an interpreter.
“Our friendship grew very strong.” He did not explain why he was blowing the whistle now. Asked by the commission chairperson Judge Raymond Zondo if he was comfortable playing the role of an intermediary (to money laundering), Mr X said he decided to let it continue happening because he felt that complaining would play into the stereotype of black people being jealous of each other. “I am a man who is able to keep secrets,” Mr X told Judge Zondo and added that Myeni did not tell him why she needed so much cash and neither did he ever ask her for reasons.
5 FEBRUARY 2017
It was previously stated in February 2017 that City Press has obtained travel invoices and itineraries that detail 23 trips SAA chairperson Dudu Myeni took that were booked and paid for by the Mhlathuze Water Board, of which she was chairperson.