Joburg Property Company CEO and CFO probed for ‘wasting millions’

31-08-2020
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Johannesburg - The chief executive of the Joburg Property Company (JPC), Helen Botes, and her chief financial officer, Imraan Bhamjee, are being investigated for allegedly wasting millions of rand by awarding highly inflated Covid-19 cleaning and sanitising contracts to four companies with no prior experience in cleaning.

Within days of the hard lockdown taking effect at the end of March, JPC had spent nearly R19 million on cleaning and sanitising various municipally-owned properties in Johannesburg under the pretext of trying to combat the spread of Covid-19. However, the amounts charged by the contractors per square metre appear staggering.

Triple SL Tech was paid R80 200 to sanitise just 200m2 - a space no larger than a suburban house - in Jeppestown. This works out to R401 per square metre.

When the Sunday Independent contacted professional cleaning companies in the private sector, prices for such services ranged from less than R2 per square metre to no more than R10.

Botes allegedly negotiated prices higher than the original quotes she was given by the companies in some cases.

A damning internal audit investigation by the City of Johannesburg released confidentially to staff on June 1, concluded that JPC’s management had allegedly contravened numerous procurement laws and regulations, and that the City had been grossly overcharged.

Among other things, Botes and Bhamjee allegedly only “negotiated” the prices after awarding the contracts to the companies. No open bidding nor normal tender procedures were followed, as Botes and Bhamjee opted to use a procurement regulation that ostensibly allowed them to negotiate directly with suppliers.

It is understood that the board of JPC was alerted to the concerns around the Covid-19 spending when it received an anonymous whistle-blower report in June. The board initially placed Botes and Bhamjee on special leave, but they were allowed to return to work in July once an external team of investigators was appointed to probe the allegations.

Among concerns raised by whistleblowers were allegations that none of the four companies awarded these multimillion-rand deals should have been considered in the first place.

Mizana Engineering, which received R5.5m for a few days’ work in March, allegedly had no prior experience or background in cleaning and no cleaning certifications.

The same is true of the other three companies.

KM Mashigo is a construction company. Whistle-blowers have questioned how it could be granted an essential services certificate by the Companies and Intellectual Property Commission to work during level 5 lockdown since all other construction companies were ordered to cease operations entirely.

This company had received R3.5m by the end of March alone.

KM Mashigo shares an address with Omphile Turnkey, which received R4.6m in the same period from JPC. By its own description, it normally offers design, space planning, civil engineering, project management, branding and architectural services.

Triple SL Tech, which operates from a home office, received nearly R4.7m for cleaning services despite previously only having experience primarily in the security industry, offering services such as CCTV solutions.

It is not known how many more millions may have been spent on these companies in April and May.

The JPC board ordered a halt to any further payments to these companies when they became aware of the allegations on June 2. It is understood the JPC board has been considering suspending Botes and Bhamjee to allow the forensic investigation to be concluded amid concerns it has been obstructed and frustrated. One senior manager wanted to sit in on investigators’ interviews with JPC staff.

Several senior management members at JPC are unionised, with Bhamjee, the CFO, described in correspondence from the SA Municipal Workers Union (Samwu) as “our member”. This is despite Bhamjee also being an executive board member at JPC.

Samwu members last week stormed the mayor’s office in an unexpected protest, which disrupted a mayoral committee meeting for nearly three hours. They demanded the forensic investigation of the CEO and CFO be halted. They accused the JPC board of “victimising” and “harassing” management.

The City’s Group Forensic Investigative Service department under General Shadrack Sibiya is conducting a preliminary investigation of the board to determine if they have acted in any improper way towards any of JPC’s managers.

Sibiya told the Sunday Independent that the investigation of the board would, however, not affect the investigation of the cleaning contracts.

“These are two separate investigations with different allegations and are being conducted independently of each other,” he said.

Well-placed sources at JPC said Botes - who has been in charge of JPC for more than a decade - has allegedly insulated herself through the unions and by buying favour of political leaders.

“She always brags she’s survived three mayors, including Herman Mashaba, and she intends to survive this one too. She controls politicians.”

Contacted for comment, board chairperson Caswell Rampheri reserved comment about whether Botes and Bhamjee might be suspended. “I would like this investigation to be concluded swiftly so we can all focus on the business of JPC.”

Botes and Bhamjee declined to comment, referring questions to the city manager and JPC chairperson.

The Sunday Independent previously reported that Botes and Bhamjee are facing allegations that their contracts of employment at JPC were entered into irregularly since Bhamjee was converted to being a permanent employee without any Mayoral Committee approval.

Botes was given a five-year contract despite the Mayoral Committee under then-mayor Mashaba only agreeing to a four-year extension for her. It’s understood that matter is due to be investigated by the City too.

Despite numerous efforts to gain comment from representatives at the four companies this week, none was forthcoming.

It is said that the Special Investigating Unit and the Hawks are investigating the Covid contracts at JPC, while AfriForum’s private prosecutions unit has taken an interest in the matter, along with the Organisation Undoing Tax Abuse.