Wednesday, April 21, 2021

South Africa: Ramaphosa shifts blame to Bosasa boss, Watson on money laundering saga


Embattled President Cyril Ramaphosa tried to shift the blame for the money laundering finding against him to controversial Bosasa boss Gavin Watson, saying the businessman was the one who routed the R500 000 donation through a third party.

In his 51-page response to Public Protector Busisiwe Mkhwebane’s office before the release of her final report, released by the Presidency on Friday, Ramaphosa denied any involvement in money-laundering.

The president claimed he neither knew of the donation itself nor the route by which the money ended up in the CR17 bank account, which was used to raise more than R200 million for his ANC presidential campaign in 2017.

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He said if there was anyone to blame for money laundering, it would be Watson because he was the one who transferred the funds from his personal account into the account of Miotto Trading, a company owned by Margaret Longworth, a sister of Bosasa’s former auditor Peet Venter, and then into the CR17 Attorneys Trust Account, managed by law firm Edelstein, Farber and Grobler (EFG) Attorneys.

“If there is any basis for the public protector’s suspicion, the suspects would be Mr Watson (who routed his donation through Miotto Trading), and Mr Venter (who in turn made the transfer to CR17). The public protector interviewed all three of them but does not disclose the explanation they gave for routing the donation via Miotto Trading.

“It means that she either did not ask them or that she asked them but chooses not to disclose their answers,” said Ramaphosa.

Read MoreSouth Africa’s Cyril Ramaphosa names special tribunal to recover corruption proceeds

“Either explanation is intriguing. If the public protector harboured any suspicion and interviewed the suspects it would be very odd for her not to ask them for an explanation.

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“If, on the other hand, she asked and they offered an explanation, it would be equally intriguing and inexplicable that she chooses not to disclose it.”

In the response, prepared by Peter Harris of Harris Nupen Molebatsi Inc, Ramaphosa maintained that neither he nor CR17 had any knowledge of the route by which Watson’s donation reached the bank account.

He insisted he “did not even know of the donation itself, least of all the route by which the money had ended up with CR17”.

In his affidavit submitted to Mkhwebane, Watson confirmed that Miotto was the company “of my erstwhile personal accountant and tax adviser Venter.

“In his aforementioned capacity, Venter would on occasion make payments on my behalf. The payment of R500 000 was made from my personal account and by my secretary in order to enable Venter to effect payment of the donation,” he said.

Watson said he “did not receive a tax benefit” and the “entitlement or otherwise to such benefit did not influence my decision”.

He also denied making a similar donation to the ANC presidential campaign of Ramaphosa’s rival at the time, Dr Nkosazana Dlamini-Zuma. “I have never made a donation to Ms Nkosazana Dlamini-Zuma”.

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However, Mkhwebane rejected Ramaphosa’s explanation and found him guilty of deliberately misleading Parliament and failing to declare Watson’s donation to his ANC campaign.

In her final report released on Thursday, Mkhwebane found the president guilty of violating the executive code of ethics and the Constitution.

Mkhwebane said the improper relationship between Ramaphosa and his family on the one side, and the company African Global Operations, formerly known as Bosasa on the other side, raised the suspicion of money laundering.

“I have taken into account the facts as well as prima facie evidence before me, I am therefore of the view that there is merit to the allegation relating to the suspicion of money laundering as alluded to in the complaint lodged with my office,” she said.

Interrogating the financial transactions that took place within the campaign and its donations, Mkhwebane found that the campaign team set up a trust account called EFG2 to receive donations which they said were around R200m.

However, the transactions that were scrutinised revealed that the money was between R800 and R900m.

Read MoreSouth Africa’s Cyril Ramaphosa names special tribunal to recover corruption proceeds

It was moved around between EFG2 and Ria Tenda Trust, Linked Environmental Services and Cyril Ramaphosa Foundation.

“From the evidence received by my office, an amount of more than one hundred and ninety-one million rand (R191 482 227, 43) was deposited into the EFG2 Absa trust account between 6 December, 2016 and 1 January, 2018 and just over one hundred and ninety-one million rand (R190 108 227) was transferred out of this account in the same period,” said Mkhwebane.

“Evidence from bank records reflect that an amount of over three hundred and eighty-eight million rand (R388 544 340, 34) was deposited into SBSA Ria Tenda Trust account between 1 January, 2017 and 20 February, 2019 whilst nearly the same amount (R388 518 464, 55) was transferred out of it in the same period.”

She said records also reflected that R441m was deposited into the FNB account of Linked Environmental Services between December 15, 2016, and February 13, 2019, and almost the same amount was transferred out of this account in the same period.

At least R335 738.42 was transferred from Linked Environmental Services FNB account into the Cyril Ramaphosa Foundation between July 20, 2017, and March 26, 2018.

She also questioned three separate donations of R30m, R39m and R51m from the same donor, between March and September 2017, asking what the person sought to gain in return.

“On the above revelations relating to exchanges of large sums of money, some of which received from private companies, I wish to express my preliminary view that such scenario, when looked at carefully, creates a situation of the risk of some sort of state capture by those donating these monies to the campaign,” Mkhwebane said.

In her remedial actions, she called on National Assembly Speaker Thandi Modise to refer Ramaphosa’s violation of the Code of Ethical Conduct and Disclosure of Members’ Interest for Assembly and Permanent Council members to the Joint Committee on Ethics and Members’ Interest, for consideration in terms of the provisions of Paragraph 10 of the Parliament Code of Ethics, within 30 days of receiving the report.

In addition, Modise had to demand publication of all donations received by Ramaphosa because, as deputy president at the time, he was bound to declare such financial interests into the Members’ registrable interests register in the spirit of accountability and transparency.

Mkhwebane also ordered National Director of Public Prosecutions, advocate Shamila Batohi, to further investigate the prima facie evidence of money laundering.

Ramaphosa’s spokesperson Khusela Diko said Ramaphosa would be studying the report but lamented Mkhwebane’s alleged failure to consider a substantial response to the Section 7 (9) notice dealing in detail with areas where the preliminary findings were deficient both factually and in law.

“It is unfortunate, however, that from a cursory reading of the final report, it seems that the president’s response to the Section 7 (9) notice has not been given due consideration. Nonetheless, the president will study the public protector’s report and make a decision on any further action,” she said.


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