A report on a forensic investigation has revealed that the biggest single share of the money mining firm Lonmin paid to the community around its Marikana mine went towards a new palace for Kgosi Bob Edward Mogale, chief of the Bapo Ba Mogale community.
The report was obtained from researchers last week ahead of a planned report-back today by Public Protector Thuli Madonsela on her five-year investigation into the missing millions.
Madonsela, whose nonrenewable term ends in October, postponed the long-awaited community briefing on Friday.
Her spokesperson, Oupa Segalwe, said the briefing was postponed “because we have struggled to get any person of authority from the Traditional Council to advise the chief of our planned visit.”
But a community organiser, who asked not to be named as he fears for his safety, said that the chief’s adviser, Rangwane Emius Mogale, had been contacted twice in the past week about arrangements for the event.
As the community prepared for Madonsela’s visit, about 150 supporters of the chief, including several members of the Bapo Traditional Council, barricaded the Madibeng FM community radio station in Brits on Thursday and forced the owners to agree to stop reporting on the community’s financial affairs.
Station manager Nick Motloung said he had been running a series of debates about the management of the community and its funds. He said he had twice received death threats by callers during live broadcasts.
On Friday, three busloads of Mogale supporters besieged the station again, demanding that Motloung sign an undertaking not to broadcast about Bapo management or finances without the approval of the Traditional Council.
Members of the community complained to the Public Protector in January 2012 that the so-called D-account into which all community revenues should be paid was being looted. After a year of internal investigation, the Public Protector commissioned a forensic report in January 2013.
The forensic report handed to Madonsela in June 2014 said available records going back to 1994 showed that R388.8 million had been paid into the account, with a further R219.6 million earned in interest.
Records showed that R500.2 million had been withdrawn, though it was not clear why or to whom it was paid.
Two sources quoted in the report said separately there was either R35 million or R108 million left in the account at the end of March 2013.
Madonsela asked Treasury in 2014 for extra funds to probe the management and use of an estimated 800 accounts held by premiers on behalf of traditional communities.
Her request was denied, a government source said.
The Auditor-General’s office confirmed in a meeting with researchers last year that not one of more than 100 active community D-accounts in North West had been audited in the past 20 years.
Though national and provincial legislation requires that they should be audited annually, the provincial government had serially failed to produce books of account.
Government sources, including a senior Treasury official, have confirmed to researchers of the Land and Accountability Research Centre at the University of Cape Town that the so-called D-account had indeed been looted, with millions spent without approval and more taken into private accounts abroad.
The forensic report seen last week confirms:
- Financial records in 300 to 400 files were scattered among offices of the Bapo Traditional Council without being indexed or organised;
- R80 million had been paid by March 2013 towards Mogale’s still-unfinished palace outside Bapong;
- R13 million had been allocated and paid for a community hall that was never built;
- An administrator government appointed to manage the Bapo’s finances was paid R18 million in one year;
- R10 million was paid to a named construction company with no record of what it was for or who had authorised the payment; and
- Royalties owed to the community by Lonmin were reflected in the account, but there was no record of revenue being received from other mines operating on Bapo land, including Pandora, Skychrome, International Ferro Chrome Metal or the Bapong Mining Company.
The forensic report was completed a month before Lonmin concluded a controversial deal with the Bapo Traditional Council, swapping access to community land, its 7.5% share of the Pandora Joint Venture, and its right to 12% of the pretax profit from platinum mined in its territory for R650 million in cash and shares.
Boyle is a senior researcher with the Land and Accountability Research Centre in the department of public law at the University of Cape Town