How a shell company and family car purchases helped Eskom’s Kusile contractors launder millions of rands

25 Apr 2023

This month, the Asset Forfeiture Unit obtained a restraint order for more than R580m in money and goods identified as the proceeds of crime. The investigators’ affidavit details how the money was laundered through subcontractor arrangements, cash cheques and car purchases.

The Asset Forfeiture Unit (AFU) has laid bare an elaborate scheme used by contractors linked to the Kusile Power station to hide kickbacks linked to more than half a billion rands in contracts.

Former Eskom acting CEO Matshela Koko, his wife Elizabeth and his stepdaughter Koketso Aren have been arrested in connection with the contract, which the National Prosecuting Authority says was concluded illegally.

The contract is the subject of a corruption trial which has seen representatives of the Swedish-Swiss robotics firm ABB arrested for their alleged involvement in securing a R2.2-billion contract from Eskom for work done at the Kusile Power Station in 2016. The company has refunded R1.5-billion after the circumstances of the award were revealed in State Capture investigations.

The AFU this month obtained a restraint order for more than R580-million in money and goods which it has identified as the proceeds of crime. The investigators’ affidavit provides insight into how the money was laundered through subcontractor arrangements, cash cheques and car purchases to hide the unlawful arrangement.

In 2015, Eskom awarded the Control and Instrumentation (C&I contract) at Kusile Power Station to ABB South Africa (ZAABB). The contract was for R500-million more than a tender submitted by competitor Siemens, but ZAABB promised to finish the job six weeks quicker.

Mohammed Mooidheen and Vernon Pillay, two senior staffers at ZAABB, received millions of rands in kickbacks from the contract which the Hawks and forensic investigators have tracked through bank statements and vehicle purchases.

According to an affidavit by Hawks investigator Captain Wilhelm Schreiber, Koko played a key role in the company, securing the contract after holding meetings with high-ranking staff at ZAABB, including two of his co-accused in the criminal case, Markus Bruegmann and Sunil Vip.

Schreiber said Koko also brought his close friend Thabo Mokoena into the deal, with ZAABB hiring his company, Leago Group, as a subcontractor. However, Koko and Mokoena soon fell out over the fee arrangement and parted ways.

At this point, another company, Impulse International, was brought in as a ZAABB subcontractor and also got several contracts directly from Eskom. Koko’s stepdaughter, Koketso Aren (formerly Choma), was a shareholder of Impulse and served as a director from 31 March 2016 to 6 October 2016. The company was owned by Pragasen Pather, who also owned a company called Indiwize Construction, which proved crucial to the scheme. Pather died from natural causes in June 2021.

Schreiber said Mooidheen and Pillay made “extraordinary approval decisions” and manipulated the procurement process to the advantage of Impulse.

“In return for these favours, Mooidheen, his wife Raeesa, Pillay and his wife Aradhina received gratifications from Impulse, which [were] laundered through Indiwize. Impulse and Indiwize had the same director, namely the late Pather. These gratifications consisted of cash and motor vehicles. The motor vehicles were registered in the names of Raeesa and Aradhina to hide the proceeds of the crimes they have been charged with, namely corruption, money laundering and fraud.”

‘The Impulse scheme’

Impulse was brought on as a ZAABB subcontractor suddenly in late 2015 without completing the company’s Supplier Qualification Questionnaire (SQQ), which was a prerequisite for joining the vendor database. It later submitted the supplier questionnaire but scored only 59%.

“Impulse scoring 59% meant that they were considered underdeveloped and could only be registered on ZAABB’s vendor database if it provided an ‘improvement plan’. No such plan was ever submitted by Impulse,” said Schreiber. It later became apparent that Impulse didn’t have the internal skills to perform the tasks needed for the Kusile project but would rely on “third parties”.

Despite these shortcomings, Schreiber said, on 28 January 2016 Pillay “reinforced” instructions to get Impulse onboard “by next week”. Impulse had to complete a second questionnaire and on 9 February 2016 attained an even lower score than the first time — 43%. In the same month, Impulse was awarded a R7-million contract.

“On 19 April 2016, to overcome Impulse’s poor scoring on the SQQs, ZAABB manipulated its internal policies and procedures to ensure that Impulse achieved a score of 94%. On 28 October 2016, an advance payment of R32-million was made by ZAABB to Impulse. This payment was authorised by Mooidheen.”

Schreiber said “large value” variation orders were issued by Eskom “on the condition that ZAABB use Impulse as its subcontractor”. ZAABB paid Impulse R543.5-million overall.

‘Gratifications’

In return for signing off on Impulse’s addition to the vendor database and payments from ZAABB, Mooidheen and Pillay were allegedly compensated through a backdoor scheme.

Impulse paid more than R30-million to Pather’s Indiwize Construction, without any services having been rendered. This money was later withdrawn in cash cheques, in amounts of either R500,000 or R1-million, which were used to pay Mooidheen and Pillay.

Mooidheen received R4.3-million in “unauthorised gratifications” from December 2016 to March 2017. He told investigators the money was part of a loan agreement between him and Pather. He also allegedly told a SA Revenue Service investigator that he had cashed the cheques for Pather as a favour, but did not retain the funds. He offered a third explanation that the cheques were for “work that he had done for the late Pather”.

In addition to these funds, in November 2016 Raeesa Mooidheen purchased a Mercedes-Benz AMG for R930,000. The car was paid for by Impulse and Indiwize. In January 2017, Raeesa Mooidheen received a Volkswagen Golf VII, valued at R618,000 which was paid for in cash cheques from Indiwize. The price was reduced to R598,000. Raeesa Mooidheen personally only paid R20,000 towards both of these vehicles.

Raeesa used her maiden name, Ramdew, seemingly to conceal her true identity. Mooidheen told investigators the two cars were registered in his wife’s name.

Pillay received R2-million in cash via Indiwize between February and March 2017, broken into four payments of R500,000. Pillay claimed the funds were part of a loan agreement.

“There exists no reason as to why these amounts were paid to Pillay. Deposits were received by Indiwize from Impulse and within 5 days thereafter the cheques were cashed by Pillay. If not for the funds paid by Impulse into the Indiwize account, the payments to Pillay would not have been possible,” Schreiber wrote.

Meanwhile, Pillay’s wife, Aradhina, also spent some time at a car dealership, picking out a Toyota Land Cruiser in October 2016. Financial records show Impulse paid more than R1.3-million for the vehicle through cheques and EFTs. Aradhina Pillay allegedly told a SARS investigator that the vehicle was payment for consulting work she had done for the company.

In his affidavit, Schreiber said the payments made to Indiwize were designed to conceal the proceeds of crime.

“By making the transfers to Indiwize, Impulse could distance itself from the payments made to other third parties, including the cash cheques issued to Mooidheen and Pillay and the payments made to the motor vehicle dealers,” he said.

ANC payment

Among the lesser amounts leaving the Impulse account was a R202,000 payment allegedly made to the African National Congress in July 2016. Impulse’s commercial manager, Yogesh Singh, told investigators that he was often asked to make payments from the company account into his personal account and then pay third parties. One such payment was to the ANC, who are also listed as respondents in the case.

“Singh states that on 29 July 2016, R202,000 was transferred into his account and he was asked to transfer those funds to an ANC election account. As Singh did not feel comfortable adding this as a beneficiary on his bank portfolio, he visited the bank and asked them to process the transaction. We submit that the amount of R202,000 constitutes an effected gift received from Impulse,” said Schreiber.

The amount forms part of R24-million in gifts given to various individuals and entities and paid for with the proceeds of the Eskom contract.

The court granted a restraint order for these gift amounts and R584-million, which were the proceeds of unlawful activities. DM

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Business Maverick

‘The Impulse scheme’

‘Gratifications’

ANC payment