All eyes on ANC bigwigs after NPA bags a witness in Gaston Savoi

By Greg Ardé and Sam Sole for amaBhungane

22 Sep 2024

The corruption plea agreement reached with Uruguayan businessman Gaston Savoi piles pressure on key ANC provincial heavyweights, but also harks back to the shadow of the National Prosecuting Authority’s (NPA) own capture.

In the South African State Capture league, Gaston Savoi is a bit player.

The smooth, moustachioed swindler from South America is nowhere near as big as the Gupta brothers. Dirty contracts with his company, Intaka, cost the state a paltry R100-million.

But in a way, Savoi was a trailblazer — from his early insertion into ANC patronage networks that exchanged overpriced state contracts for bribe payments to the party and its minions, to his adoption of a legal delay strategy similar to Jacob Zuma’s Stalingrad approach.

As with Zuma, attempts to protect the ANC heavyweights he allegedly suborned led to the hollowing out of the NPA, from which it has still not recovered.

(To underscore this history, you can read amaBhungane’s tracking of the allegations involving Savoi here, here, here and also here.)

So it was significant when, earlier this month, Savoi made a surprise appearance in the Pietermaritzburg High Court, where he pleaded guilty to fraud and corruption.

People close to the case say Savoi was quickly in and out of court, and few knew details of what was later described as a “secret” plea agreement.

Now amaBhungane has obtained access to the agreement — and it makes clear that at least some of his erstwhile ANC chums have reason to be nervous, most notably former KwaZulu-Natal finance MEC Peggy Nkonyeni, former ANC Northern Cape leader John Block, who was released on parole last year, after serving time for another unrelated corruption case and, potentially, former KZN MEC Mike Mabuyakhulu.

Nkonyeni, who currently sits on the ANC national working committee, has been MEC for various KZN portfolios, including health, transport, education, and, between 2022 and 2024, finance.

In July 2011, Nkonyeni, Savoi and Mabuyakhulu, a former ANC treasurer in KZN, were among 23 accused brought before the Pietermaritzburg High Court to face a raft of charges, including fraud, corruption and money laundering.

‘Amigos’ case

The trial against Nkonyeni and others became known as the “amigos” case because evidence emerged that some accused addressed one another in text messages as amigos.

The case all but fizzled out amid claims of capture of the NPA, including interference by Advocate Lawrence Mrwebi, then head of the specialised commercial crimes unit, first reported by amaBhungane here.

The Northern Cape case where Block and other officials faced charges over the provision by Savoi of dialysis machines and, as in KZN, “Oxyntaka” Self-Generating Oxygen Plants and “Wataka” water purification units, also ground to a halt.

As PwC forensic accountant Trevor White later told the Zondo Commission, an application by Savoi for a permanent stay of prosecution “effectively sterilised” the case for all the accused, while the NPA allowed postponement after postponement.

But the dogged efforts of a few police detectives, White’s evidence before the Zondo Commission, and most especially Savo’'s plea — which also commits him to cooperating with the prosecution — may revive the cases.

So now the critical amigo in the mariachi band is singing, what will become of his compadres, especially Nkonyeni?

When news of Savoi’s plea emerged, she said she would have to get a lawyer. She did not respond to messages from amaBhungane. Mabuyakhulu did not respond to an invitation to comment.

To recap: Savoi in SA

But let’s take a step back in time to the mid-1990s, when Uruguayan Savoi left home to extend his fortune in South Africa.

He bought a share in Shamwari Private Game Reserve and started hobnobbing with politicians and influence peddlers. His business in South Africa was part of a more extensive play in Africa.

In South Africa (SA), things warmed up for him at Thabo Mbeki’s presidential investment council meeting in 2003. There, he pressed the flesh with a host of dignitaries.

A key encounter was with trade and industry minister Alec Erwin, who played golf with Savoi and learned that his hustle extended beyond tourism businesses to flogging water purification systems and oxygen machines in hospitals.

“Savoi specifically discussed the Watakas and Oxygentakas with Minister Erwin and explained the benefits to South Africa of getting these systems,” his plea notes.

Savoi claims Erwin expressed a keen interest in getting these systems and recommended they be piloted in KZN. Savoi says Erwin introduced him to his “right-hand man” Rafique Bagus, who also featured in one of the early Gupta deals.

The plea suggests Erwin tasked Bagus to engage relevant officials in KZN, and Bagus introduced Savoi to Nkonyeni, then MEC for health, Dr Busisiwe Nyembezi, then health HoD, and provincial treasury boss Sipho Shabalala.

In 2011 Erwin told amaBhungane that he was not involved in these arrangements: “I had no role to play whatsoever. Any advice I gave was public information. I know Rafique would not have asked me to do anything unethical. I have no knowledge of what Rafique or anyone else did with him.”

KZN treasury’s Shabalala was to become a key fixer for Savoi, setting his wife Beatrice up in business with the Uruguayan and facilitating a R1-million “donation” from Savoi.

Government millions on Wataka plants

To cut a long story short, the provincial government paid more than R44-million for 20 Wataka plants.

The money was diverted from the province's poverty alleviation fund. There was no needs analysis or feasibility study for the machines, the market was never tested for comparable products, and Shabalala and Savoi conspired to close the deal.

Savoi engineered cover quotes and then supplied the equipment, making a R30-million profit. More than two years after the province paid for the machines, only half were installed.

The deal was signed in 2006, and in 2007 Savoi was paid.

A week later, Savoi's company Intaka paid R1,053,000 to the Durban law firm Kuboni Shezi, which had allegedly issued a false invoice for legal fees.

The firm, in turn, channelled the money to Shabalala, who used it for tractors, fertiliser and other items, on his farm outside Pietermaritzburg.

The racket and the police investigation into the shenanigans was exposed in October 2009, and by July 2011 the state squared up against Savoi, Shabalala, Nkonyeni, Mabuyakhulu, Kuboni and the other 18 accused, including Nyembezi and other officials.

In the meantime, it had emerged that the KZN Department of Health had also bought oxygenators; Mabuyakhulu’s KZN Department of Cooperative Government and Traditional Affairs had also bought water purification plants; and R1-million was paid by Intaka to an entity that was owned by a Lindelihle Mkhwanazi, the boyfriend of Nkonyeni at the time.

But, in 2012 the charges against Nkonyeni and Mabuyakhulu were controversially dropped, and Shabalala’s trial was separated from the other amigos at his request.

In January 2020, the issue came before the Zondo Commission when PwC’s White testified about his investigations into Savoi — and the blatant interference by the NPA.

NPA ‘capture’

The state had tasked White with assisting investigations since 2009.

He told Zondo that in March 2012, the NPA asked him to attend a meeting with Advocate Mrwebi, who abruptly informed him that charges against Mabuyakhulu would be withdrawn and that the NPA was considering withdrawing the charges against Nkonyeni.

White said he and investigating officer Colonel Piet du Plooy protested, saying they were given less than an hour to present forensic reports that would take three days to explain. White said Mrwebi wasn't interested.

Du Plooy told Mrwebi he had clearly already made up his mind and the consultation was a formality.

Afterwards, White wrote to the national treasury and complained about Mrwebi.

In August 2012, charges were withdrawn against Nkonyeni, Mabuyakhulu, Nkonyeni’s boyfriend Mkhwanazi, and three more of the original accused.

This followed staff changes at the NPA, including the removal of Acting Provincial Director of Public Prosecutions Simphiwe Mlotshwa, who had approved the prosecution and refused to withdraw the charges without a formal review process by then acting National Director of Public Prosecutions Nomgcobo Jiba.

Mlotshwa was removed and replaced by Advocate Moipone Noko as KZN Director of Public Prosecutions, who promptly withdrew the charges.

Prosecutors told White that Noko did not even request to see the forensic reports or the case docket before dropping the charges.

Signing off racketeering charges

Noko also played a key role in signing off racketeering charges against former Hawks KZN boss Johann Booysen, which Mlotshwa had also rejected and which were later overturned.

Noko resigned in February 2021, three days after being informed that President Cyril Ramaphosa had decided to appoint an inquiry into her fitness to hold office.

In 2019, both Jiba and Mrwebi were removed from office, following damning findings against them by the Mokgoro inquiry into their fitness.

In the Mokgoro hearings, it was revealed that “the Booysen matter, the Savoi matter and the John Block matters were all handled with utmost confidentiality or secrecy” by Jiba’s office, and the case files were held in a highly fortified safe.

Part of White’s evidence before Zondo was an affidavit by Mabuyakhulu that says Shabalala gave him R1-million in cash, which was used to cover the costs of the ANC’s June 2008 KZN conference.

This was supposedly done more than a year after Shabalala had received the R1,053,000 from Savoi via the law firm.

White told the commission there appeared to be no receipt for the money, so either the party didn’t actually receive it, or it was kept outside of the ANC’s accounting, but various people, including then KZN ANC chair Zweli Mkhize, knew about the original Savoi donation.

Mabuyakhulu and R1-million cash

“In [Mabuyakhulu’s] version there is not a single person that corroborates his version. No one else ever saw this one million rand, no one else counted this million rand. Are we saying the provincial treasurer would count it himself when it was brought to the office? Nobody has ever seen this money,” said White.

Mabuyakhulu challenged White’s evidence before Zondo saying it was pure speculation to suggest that R1-million in cash he later received from Shabalala was the donation from Intaka linked to the Wataka deals.

Zondo’s findings

In June 2022, Zondo recommended that Mabuyakhulu and Nkonyeni be re-charged.

Zondo said there was no evidence of Mabuyakhulu’s role in the Intaka deal.

However with regards to the Savoi “donation” to the ANC, Zondo said, “Despite his professed ignorance [of where the money came from], the probabilities are that Mabuyakhulu knew it was a donation from Dr Savoi… Further, his conduct in dealing with the money after receiving it is not consistent with that of a person who did not know its source and that it was tainted by potential illegality… he went to great lengths to conceal it… he did not record it in the ANC’s books.”

The report said that in his evidence, Mabuyakhulu had claimed he had put the cash in a safe, not in the bank account, and used it to pay for various items for the ANC. He did not keep receipts.

His version could not be true, Zondo found, “and consequently whether he has committed an offence may be determined in a criminal trial”.

On Nkonyeni, Zondo noted that while it did not appear that Nkonyeni influenced the award of contracts to Intaka, “there is proof of an arrangement that she and her romantic partner would benefit financially as a result of those contracts”.

Zondo said the decision to prefer criminal charges against Nkonyeni and Mabuyakulu was correct, and the subsequent withdrawal of those charges was wrong: “Both of them must stand trial for their involvement in the respective matters.”

Afterwards, KZN Director of Public Prosecutions Elaine Zungu told TimesLive she noted the Zondo Commission findings: “We are looking at the findings and will revisit the evidence but at this stage the matter continues as it stands.”

And there it stood — until the Savoi plea deal.

Shabalala awaiting outcome of appeal

In September 2022, Shabalala was sentenced to 15 years in prison, after a stinging judgment by Judge Dhaya Pillay.

Shabalala, a family friend of Mkhize, briefly went to the slammer, but is now out of jail, awaiting the outcome of an appeal against his sentence.

Sentencing him, Pillay said Savoi was given a free hand to manipulate the terms of his deals with the province. She said the former treasury head and ANC member acted on the orders of “his principals” in his fraud, corruption and money laundering.

She said he hung on to the Savoi donation for more than a year, tried to rescue his private business and then paid it to Mabuyakhulu.

Pillay said the Intaka deal was started under the “political stewardship” of Mkhize. Shabalala’s failure to testify in his trial was “tragic… he takes the fall while the real villains go free”.

Pillay said Mkhize’s testimony that communities wanted Savoi’s Watakas was “patently false” and that the “probabilities are that Mkhize supported doing business with Savoi, even before he received” a proposal from Shabalala.

Pillay said the Intaka deal, derived from the poverty fund, was a shameful indictment of “all those who pretended to advance the cause of the poor while they pocketed extortionary profits”.

She said evidence that the ANC actually received the Savoi donation was “dubious”.

Plea deal bombshell?

Does the Shabalala case, Zondo’s recommendations, and now Savoi’s plea deal, lay the groundwork for reviving charges against Mabuyakhulu, Nkonyeni and Block?

Savoi’s plea makes no mention of Mabuyakhulu, but Nkonyeni features.

Savoi says that at Mbeki’s investment council meeting, it was clear that government-related business was subject to black economic empowerment (BEE) and he needed BEE partners to share the benefits from government contracts.

To make Intaka KZN compliant, Savoi was introduced to Nkonyeni’s boyfriend Lindelihle Mkhwanazi.

The couple met Savoi on several occasions and negotiated a commission on all deals concluded in KZN — although this happened after the original R44-million deal.

Savoi sold another two Watakas (for installation at Rietvlei, and in KZN) for R5-million, and Mkhwanazi’s company was paid R1-million in August 2007 — a 20% gratification disguised as a commission, Savoi says in his plea.

White’s evidence before Zondo includes an affidavit by Nkonyeni admitting her personal relationship with Mkhwanazi, though she denies being in business with him.

White told Zondo that the Intaka records clearly showed that Nkonyeni and Mkhwanazi frequently met Savoi together before Intaka signed a contract with the department of health.

Intaka and White’s evidence

White lists emails, telephone conversations, texts, and more than a dozen meetings between Savoi and Nkonyeni in 2007 and 2008.

In the communication, Nkonyeni discusses technical aspects of Savoi’s business.

In one text, she says to Savoi: “Doc! The contract was signed yesterday although your guys were not happy with maintenance and few other things buy (sic) they were cruched (sic) because of what was reflected in the bid document. Next time we’ll have to be more careful and perhaps u need to cancel the donation since u r losing on maintenance, what do u suggest? Peggy.”

Zondo said this showed Nkonyeni conspired with Intaka to the health department’s detriment, and the message she sent Savoi showed their relationship was “manifestly corrupt”.

Zondo found Mkhwanazi rendered no services in return for the R1-million Savoi paid his company: “It is more probable than not that this payment was tainted by corruption and that Ms Nkonyeni knew or ought reasonably to have known of the corruption that was involved here.”

Savoi’s plea came before KZN judge president Thoba Poyo-Dlwati.

The 71-year-old pleaded guilty to fraud and corruption in his KZN and Northern Cape dealings, including more than R700,000 paid to Block.

Savoi forfeited R60-million in assets, and paid fines of R20-million.

KZN NPA spokesperson Natasha Ramkisson-Kara said Savoi’s plea and sentence agreement followed various considerations, with “the most important being the accused agreeing to cooperate and assist the state in its further proceedings against other government officials”.

Northern Cape NPA spokesperson Mojalefa Senokoatsane told amaBhungane: “Gaston Savoi agreed to cooperate with the State in our efforts to ensure accountability for related criminal acts. We certainly intend to address further accused in the Northern Cape. Who they are and when they will appear in court, are currently under consideration.”

It remains to be seen how high up the ANC food chain the NPA has the stomach to go. DM

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