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Johannesburg – There are plans to prosecute Victor Nkhwashu, attorney for ANC Secretary General Ace Magashule, after his law firm allegedly received double the amount of R 60,000 withheld by the Government Employees Pension Scheme (Gems) in 2016.
The Nkhwashu law firm is also charged with charging the system an additional R292 078.40, “with no fixed hours and hourly rate,” the report said.
The Sunday Independent believes that a few weeks ago the system submitted a report to the Economic Crime Division as evidence against Nkhwashu.
The report comes from an investigation by the Ligwa Advisory Service commissioned by the system in May 2017 and submitted in January 2018.
Director Jabu Mahlangu yesterday confirmed that Ligwa had been tasked with the investigation but refused to answer certain questions.
“I can confirm that we did such a research for the program, but they are the right people to talk about,” he said.
The program’s marketing director, Dr. Phumelela Dhlomo, berated this newspaper yesterday for trying to “revive an ancient story using leaked and unverified documents”.
“One wonders why this matter was brought into your paper as it is currently being dealt with by law enforcement agencies. Hence, we are confused about what your source’s intentions are.
“We can confirm that based on the results of the investigation, a case was opened at the Brooklyn Police Station with case number CAS 244/04/2018.
“This is also a sensitive case, as it is currently being processed by the law enforcement authorities and we do not want to jeopardize the investigation.”
Dhlomo said the system was transparent on the matter.
“All possible means are being investigated to get the perpetrators to book and recover funds belonging to members.”
The Ligwa report, seen by the Sunday Independent, shows that Victor Nkhwashu Attorneys were part of 23 law firms that responded to an open offer of the system in which it stated that it “wanted to contract with a number of law firms to form the legal body responsible for ensuring that the system has immediate access to a range of specified specialized legal services.
“For contracts with the above law firms, the system intends to have at least one small and one medium-sized law firm in addition to any large law firms that may be contracted with.”
A three-person panel on Gems’ Offer Evaluation Committee recommended Victor Nkhwashu Attorneys, who scored the second highest score after the law firm that scored higher was deemed unsuitable for serving the system’s best interest.
The report also found that in a meeting on February 25, 2016, the system’s board of trustees recommended “contract negotiations with Victor Nkhwashu Attorneys” and another law firm.
The agreement was signed with representatives of Victor Nkhwashu’s lawyers on March 8, 2016, and on March 10, 2016, Nkhwashu’s law firm was charged a monthly deductible of R 60,000 excluding VAT under the agreement.
Some red flags were raised in the report when it was discovered that Nkhwashu was a business partner of a separate entity owned by a partner of one of the members of the system’s bid evaluation committee.
According to the report, Victor Nkhwashu’s lawyers were paid a total of R1 1.7 million for all work performed between April 2016 and May 2017.
According to the report, a “substantial portion of the payments to Victor Nkhwashu Attorneys” were approved by the relevant member of the Offer Evaluation Committee and her other colleague for “services rendered or payments.”
However, the report adds that investigators picked up two bills which they consider “duplicate and therefore irregular payments”.
“We consider it irregular to approve the above-mentioned invoice without specifying the hours spent and the hourly rates on which it is based,” the report said.
The report concluded that action should be taken by the system to reclaim the R60,000 double payment from Victor Nkhwashu’s attorneys and to report the matter to law enforcement agencies because the bid evaluation member did not declare their conflict of interest.