How Bapo’s R616m was blown

Outgoing Public Protector Thuli Madonsela stunned the Bapo ba Mogale community yesterday by revealing how their mining royalties were plundered from over R617 million in 1995 to just over R700 000 today – with not much to show for it.

Madonsela said further investigation was needed to verify where and how millions were spent on a royal palace for the community’s chief in the platinum-rich area.

Kgosi Mogale’s palace, which was to initially cost R20 million, ended up costing about R80 million with approximately R68 million paid to consultants alone and R2.8 million spent on decor.

The community approached the Public Protector’s office in 2012 seeking answers about what happened to their bank balance in the past 20 years. The money was earned in royalties from mining giants, including Lonmin.

On her last visit to the area in July, Madonsela told community members they now had R721 000 to their name.

She explained the R617 million in their account in 1994 comprised R392 million in deposits and R224 million in interest. By 2014, she said, the balance had dropped to just over R495 000.

Madonsela said a team of experts would visit the palace to verify the actual work done against the amount reflected on the financial statements.

Madonsela was asked to investigate “allegations of systematic looting of the collective resources of the community, including funds held in the so-called
D-account [controlled by the North West government into which mining companies paid royalties for communities on whose land they operated]”.

The D-account has not been audited in 20 years.

Madonsela told residents that they were actually in debt after the Ba Mogale Investment Company borrowed R100 million from the Public Investment Commission. The community’s investment company received over R40 million in royalties since 2014, but most of it was spent “for administration purposes”.

The Public Protector’s office said that millions of the community’s money was spent paying administrators, consultants and suppliers for services such as catering.

“Other expenditure areas were allowances paid to tribal councillors and members of the royal family. In addition, funds were paid to universities and colleges as bursaries, and to book stores,” Madonsela said.

“The investigation will establish who the beneficiaries of these payments were, determine if procedures were followed and if there was value for money.”

Madonsela, whose term ends at the end of the week, urged the community to give her office until January to conclude the investigation and bring them all the answers.