Money talks – what the SA Reserve Bank report had to say about the Phala Phala couch cash

7 Nov 2023

Two suspects are facing criminal charges for their alleged role in the theft of $580,000 from President Cyril Ramaphosa’s Phala Phala farm in February 2020. But where did the money come from and why was it never declared? According to the South African Reserve Bank’s report, it wasn’t Ramaphosa’s money to start with.

Throughout the Phala Phala scandal, President Cyril Ramaphosa has been called upon to account for his actions before several institutional bodies, including Parliament and the Public Protector. The theft of a large sum of undeclared US dollars from his Limpopo farm, and the subsequent off-the-books investigation to find those responsible, brought his conduct under scrutiny.

When the South African Reserve Bank (Sarb) launched its investigation of the circumstances surrounding the stolen money in June 2022, its main objective was to determine whether the President had contravened Exchange Control Regulation 6(1), which states:

“Every person resident in the Republic who becomes entitled to sell or to procure the sale of any foreign currency, shall within thirty days after becoming so entitled, make or cause to be made, a declaration in writing of such foreign currency to the Treasury or to an authorised dealer.”

The decision to investigate was prompted by complaints sent to Sarb by various groups, including the DA, the EFF and Parliament’s Standing Committee on Finance.

These were based on the criminal complaint that former head of the State Security Agency (SSA) Arthur Fraser filed against Ramaphosa in relation to the theft. Among the allegations in Fraser’s affidavit was that the President had contravened fiscal and exchange control regulations.

Sarb’s report on the investigation, which found that Ramaphosa had not contravened regulations, was previously confidential. However, in September, the DA filed an application in the Gauteng Division of the High Court in Pretoria seeking to have the findings of the report overturned. The party is seeking a finding that Ramaphosa is guilty of exchange control violations, according to a News24 article.

The report has since been released as part of the central bank’s response to the DA’s legal challenge.

Read more in Daily Maverick: Money laundering and housebreaking charges brought against Phala Phala farm theft suspects

Buffalo spending

The Sarb report found that the stolen US dollars formed part of a $580,000 cash payment for buffalo from Ntaba Nyoni Estates CC (also known as Phala Phala Wildlife), the game ranching operation that conducts business at the Phala Phala farm. Ramaphosa is the sole member of Ntaba Nyoni Estates CC.

The buyer of the buffalo, Sudanese businessman Hazim Mustafa, visited the farm in December 2019, where he spoke to acting lodge manager Dumisani Sylvester Ndlovu.

“After being shown a specific ‘parcel’ of animals in Camp 6, Mr Hazim selected 20 animals which he was interested in. Mr Hazim handed USD580,000 in cash to Mr Ndlovu as payment for the buffaloes he had selected,” stated the report.

The sale was in line with a discussion Ramaphosa had with the farm’s general manager earlier in the year about selling off certain substandard buffalo, potentially to buyers from the Middle East or other African countries.

Ramaphosa was reportedly not at the farm at the time the money was handed over to Ndlovu, but was informed of the transaction when he arrived on the property the following day. He instructed that the money should be kept at Phala Phala until his next visit when he could brief the general manager of the farm on the processing of the transaction.

“On or about [30 December 2019] Mr Ndlovu decided to move the foreign currency from the safe (to which many employees had access and which was used for general storage purposes at the Phala Phala farm) to a bedroom in the President’s house on the Phala Phala farm (which he considered to be a safer place) and hid it under the cushions of a sofa, for fear of some being stolen while he would be on leave,” stated the Sarb report.

“On [10 February 2020] it was discovered that the President’s house had been broken into and the foreign currency stolen.”

The buffalo were never delivered to Mustafa due to factors including the theft of the cash and the onset of the pandemic. The report also found that none of the stolen funds were recovered.

Read more in Daily Maverick: Reserve Bank’s buffalo-sized Phala Phala cop-out puts President Ramaphosa in the clear

Imperfect transaction

Although the US dollars remained undeclared at the Phala Phala farm for a period exceeding 30 days, Sarb determined that Ramaphosa was not in contravention of Exchange Control Regulation 6(1).

According to the report, while the money was handed over to Ndlovu in December 2019, the conclusion of the sale was subject to certain conditions being met. These included state veterinary examinations, blood tests for the animals and permits for their transportation.

As these conditions were never met, there was no “perfected transaction” between Mustafa and Ntaba Nyoni Estates CC. While the game ranching operation was in possession of the money, it had no legal entitlement to the funds due to unfulfilled conditions precedent to the sale.

“[The Financial Surveillance Department], on the facts available to it, cannot conclude that there was a contravention of Exchange Control Regulation 6(1) by either the President or Ntaba Nyoni Estates CC,” concluded the report.

The report did acknowledge some “inconsistencies and non-alignment” in the evidence it dealt with, but stated there were no material inconsistencies in Ramaphosa’s account of events.

The report’s findings have not gone unopposed. When Sarb governor Lesetja Kganyago presented the findings to Parliament’s Standing Committee on Finances on 30 August, opposition MPs questioned their soundness.

United Democratic Movement chief whip, Nqabayomzi Kwankwa, called the outcome “unadulterated claptrap”, according to a report by Daily Maverick’s Marianne Merten.

EFF MP Floyd Shivambu accused Sarb of trying to “cover up” what happened at Phala Phala.

Read more in Daily Maverick: ‘Unadulterated claptrap’ — opposition derides SA Reserve Bank’s Phala Phala findings, and legal challenges loom

On Tuesday 7 November, two suspects appeared in the Bela-Bela Magistrates’ Court for their alleged role in the theft of the money from Ramaphosa’s farm in February 2020.

Imanuwela David (39) and Froliana Joseph (30) face three charges: conspiracy to commit housebreaking with intent to steal and theft; housebreaking with intent to steal; and housebreaking with intent to steal and theft. David faces an additional count of money laundering.

The Hawks have indicated that the arrest of a third suspect is imminent. DM

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South Africa

Buffalo spending

Imperfect transaction