Higher Education Minister Blade Nzimande threatened legal action after an NPO released a report and recordings in which suppliers and NSFAS board chairperson Ernest Khosa discussed rampant corruption in the higher education tender system. 'The minister wishes to reject the malicious allegations contained in the leaked OUTA report,’ the department said in a statement.
Blade Nzimande’s name loomed large in a new report by the Organisation Undoing Tax Abuse (Outa), which allegedly links the Minister of Higher Education, the chair of the National Student Financial Aid Scheme (NSFAS), Ernest Khosa, and others to rampant corruption in tender procurement for higher education.
Outa says a whistleblower has shared two recordings allegedly of talks between Khosa, Thula Ntumba and an unnamed third party, in which they discuss kickbacks, mismanagement and political meddling in NSFAS, which have brought the scheme to its knees.
On Thursday, Outa released the recordings, transcripts of the recordings as well as a detailed 51-page report on the alleged corruption, in which Khosa, an unnamed supplier and Ntumba, the husband of Tshegofatso Ntumba (a director in Coinvest, one of four service providers appointed to disburse payments to students) discuss corruption investigations and alleged kickbacks for tenders, favours and “protection”.
Outa has called for Nzimande’s resignation or axing.
The centre of the rot
In June 2022, NSFAS appointed four service providers with links to the government: Coinvest Africa (Pty) Ltd, Tenet Technology (Pty) Ltd, Ezaga Holdings (Pty) Ltd and Norraco Corporation (Pty) Ltd. Subsequently, NSFAS’s payment system to students “all but collapsed”, Outa says.
Outa had warned at the time that awarding the tender to these service providers to disburse direct payments to students would cause problems with the payments. It has also published several reports exposing how funds were being mismanaged and the role of former NSFAS CEO Andile Nongogo in the alleged corruption.
Nzimande’s name is at the centre of the corruption allegations: it was he who appointed both Nongogo as CEO of NSFAS and Khosa as the chairperson of the NSFAS board. Nzimande remains associated with the SA Communist Party (SACP) — an organisation he served for 24 years as general secretary, before his appointment as its national chairperson on 16 July 2022.
Nzimande served as Minister of Higher Education from 11 May 2009 to 17 October 2017 and as Minister of Transport from February 2018 until he was reappointed to the higher education ministry in May 2019.
Khosa became a non-executive member of the South African Civil Aviation Authority (SACAA) board on 1 April 2018. That same year, Nzimande, then the Minister of Transport, appointed him as chairperson of SACAA’s board. In December 2020 Nzimande, then Minister of Higher Education, installed Khosa as chairperson of the NSFAS board.
This despite Khosa’s resignation in 2005 as CEO of the Mpumalanga Economic Empowerment Commission (MEEC) – now known as the Mpumalanga Economic Growth Agency – just before a forensic audit report into widespread systematic fraud, corruption and mismanagement was scheduled to be released by PwC detailing his role in irregular multimillion-rand loans to MEEC board members and contracts to companies linked to senior managers at the commission.
Nongogo was CEO at the Services SETA (SSETA) at the time the tenders were awarded to the four service providers. He was fired from NSFAS on 24 October 2023, after a board-commissioned investigation by Werksmans Attorneys and Advocate Tembeka Ngcukaitobi found rampant irregularities with the tender process.
An earlier investigation by Outa showed Nongogo had signed off on payments for goods and services delivered to SSETA as part of a rebranding campaign that cost R37-million.
Criminal charges have been laid against him.
The taped conversations, believed to have been recorded by one of the suppliers meeting with Khosa, are of two separate meetings which took place after the NSFAS board resolved to put Nongogo on special leave on 16 August to allow the Werksmans investigation into his conduct to proceed.
Read more in Daily Maverick: NSFAS CEO Andile Nongogo faces axe after 'conflict of interest' in appointment of payment providers
The announcement of Nongogo’s leave of absence came a day after Khosa met with Ntumba, an auditor and businessman, who is involved in companies that won tenders worth R39.7-million (for a forensic investigation) and R62.3 million at SSETA (along with a JV partner Menzi Fakude) and a further R2.7 million at the Construction Education and Training Authority.
Padding costs
His consultancy, Ntumba and Associates Consulting, is also on the panel of NSFAS financial management companies.
Star Sign and Print, of which Tshegofatso Ntumba is a director, was awarded the R39.7-million tender by SSETA for the printing and branding of promotional items. The company massively padded costs.
According to Outa’s investigation none of the invoiced prices was questioned by Nongogo, who authorised payments for items or services such as the following:
- R93,579.60 for 20 branded T-shirts (costing R4,679 each);
- R264,340 for six branded umbrellas (R44,057 per umbrella);
- R187,600 for video services for a one-day event;
- R58,800 for 60 coasters (R980 per coaster);
- R36,300 to design a letterhead;
- R36,300 to redesign a payment advice form (where only three minor changes were made to the existing form);
- R668,200 to print 100 copies of the SSETA Annual Performance Plan;
- R58,400 for photography services at a one-day event; and
- R302,010 for a tender box’s vinyl branding.
‘Conspiracy’
In the first recording, Khosa is heard talking to “Mr A” and “Mr B”, who are not identified.
The men discuss the latter’s history at the MEEC as well as Outa’s report on the SSETA tender awarded to Star Sign and Print implicating Nongogo as he approved payments for goods and services at highly inflated prices.
Khosa: “I have walked that road before by the way (believed to be referring to the MEEC investigation).”
Mr B: “You know it. But if Outa can get that information Chair, they put it on the (inaudible)… Because that is what they are doing. Because I see the CEO SETA thing. There is no link between what he’s doing here and what he did in the past. I mean it’s unwarranted.”
Khosa: “Yoh, yoh, yoh, yoh… But what they have done, what we’re unable to do, is to sponsor certain people to do certain things. Because right now there is a journalist who is calling all of us about yesterday’s board decision.”
They also discuss a political conspiracy to remove Nzimande and the board. Khosa: “But that [the Outa report] is not the problem. The point is that they wanted these things to remove the minister and they wanted this thing to remove the board by tomorrow.”
When Mr A suggests Outa is a “hired gun”, Khosa responds: “The enemy is our own people who wants to move. This is Buti Manamela (Higher Education Deputy Minister).”
Khosa then tells the men that “we will never kill anybody around this table”, which is interpreted to mean that they will not terminate the service providers’ contracts.
The chair then tells them to find a law firm that they “can manage”. Ntumba responds by suggesting Werksmans Attorneys for the investigation, and promising to give Khosa the name of a partner at the firm that NSFAS would be able to control. That plan backfired because Werksmans’ recommendations went against NSFAS, its CEO and the four suppliers.
Mr B also asks Khosa about certain letters that Nongogo had to sign. Khosa confirms he changed the contents. “I saw the letters. As a matter of fact, I have contributed in shaping the letters and I added a few things.”
A City Press article on 22 October 2023 quoted Nongogo as linking his suspension to off-take agreements between companies handpicked by a senior government official and Khosa. Nongogo claimed Khosa and a ministerial adviser had given him a list before his suspension and he was put under pressure to ensure that the companies received the off-take agreements.
Nongogo further alleged his electronic signature was used after his suspension and without his permission to issue student accommodation off-take agreement letters to 12 potential service providers.
In the recording, Khosa warns that Nzimande is worried their relationship with the service providers will become known, adding he suspects investigators are tracking their cellphones.
“They are checking our cellphones. They say they will release these things. That is what is scaring the minister. He is shit scared.”
‘Manage this man’
The second recording is split in two: at first Mr A (Ntumba) and another unidentified person (“Mr C”) meet at a restaurant; Khosa then joins them at the restaurant.
In the first half, Ntumba and Mr C discuss “managing” Khosa and their belief that someone is controlling the chair, resulting in the decision to rush the Werksmans probe, and Khosa’s role in destroying the CEO’s career.
Mr C: “I think let’s manage this man.”
Ntumba: “So, what is he saying? What is his end game? We are having a discussion about when we must do something. There must be an end game.”
Mr C: “But so, I don’t think he has clearly defined the end game. For him it’s about, and that’s my assessment, it’s about monetising. But I think they’ve got power too, you know Mr Ntumba, if for instance they can start by saying, I was thinking about this, they can say the report yeah, the CEO the investigation must be for three months. Why must they rush and make it a month? That’s my thinking. In that three months of work time, it’s the end of the year. Because now they are ceding to pressure from these guys, the Outa and them…”
Ntumba: “Remember, Action SA Youth League went to court to say they want to set aside this thing. Once you do that, they will set aside everything. I’m telling you.
Mr C: “No, no, I see he wants to take us all out. It’s like threatening, so that we can give him many things.”
The men discuss the service providers’ failure to find more than 30,000 Unisa students and 685 at the University of Stellenbosch through Know Your Customer verification, using Khosa’s past against him, and their belief Nongogo is the victim of a political smear campaign.
“I … just to send him a text direct with an unknown number to say we are taking these things of your past to the media… it seems like he forgets where he is from.”
Ntumba: “He was acquitted.”
Mr C: “No no no. But it doesn’t matter. The politics is playing with the CEO. And it’s not as if the CEO is guilty.”
Later, Mr C says: “I’m going to send that thing (an SMS to Khosa) today, Mr Ntumba, but as if I’m a journalist. I’m asking questions. How were you appointed with this history just to uncover that you have this and this and that how were you made chairperson of two things, you know? Surely you are more corrupt than the suspended CEO. Something like that.”
Then Ntumba tells Mr C he is very upset that people forget favours, saying he will remind Khosa. “I gave him a million rands for the Communist Party. Just imagine. For the conference. When there was nothing. I donated with the very same company that created T-shirts last year together with the bags.”
Ntumba sponsored the SACP’s 2022 conference with the amount R1-million. His wife's company, Star Sign and Print, donated T-shirts and bags for the event, according to the report.
Confirming their distrust of Khosa and that payments were made to the chair, Mr C says: “Because the way he is dealing with us, he is becoming an enemy and … he’s misleading us, taking our monies and everything else. Because this thing is on the internet it’s still there.”
Ntumba: “So, it means that these people are fighting for that six million. Remember at some point he was demanding. He said he and the minister want six million.”
When Khosa joins the men in the restaurant, the three discuss the not-yet-released Werksmans report, the SIU investigation, Outa’s involvement and the possibility of the contracts being cancelled.
Mr C then discusses incentives, saying although things are not going as well as planned, the “two top players” will still give incentives of “100 each”.
Ntumba responds: “We’ll make a plan. I don’t think the source is key. At this stage is to try and see what we can do. But I don’t think the source matters. Chair knows we’ve been doing a lot of things even before this thing came. And the party that he belongs to, his minister, he knows. We’ve been giving them serious things. Even before these things are here. And the hole is huge. Because of historic and where we are coming from, you know. It’s fine.”
During discussions of the progress of the Werksmans’ probe, Ntumba asks that – should the Werksmans report recommend cancelling the service provider contracts – that it is done in such a way that Coinvest will not look “guilty” because Coinvest works with other entities and cannot afford to lose its Nedbank sponsorship.
Khosa later tells the men if the investigation recommends cancelling the service providers’ contracts, these recommendations will be made to the board and the board will have the final say. The board could decide to implement the recommendations, to consult with the parties or not to accept the recommendation.
SACP response
SACP spokesperson Alex Mashilo told Daily Maverick that the SACP “has never and will never” approach anyone to seek funding support illegitimately.
“We will not allow anyone to engage in shenanigans and to try and co-opt the name of our party into those shenanigans. We stand firm in our stance against corruption. We saw the transcripts of the recordings by the third party from Outa, but we remain firm in what we have said.”
On Friday, the Department of Higher Education tweeted a lumbering response from Nzimande, stating it noted with serious concern the allegations levelled against him. “The minister wishes to reject the malicious allegations contained in the leaked outer report and further reassures the public that he never used any money from any departments entities (sic) for the purpose of funding the South African Communist Party.
“The minister views the allegations … as reckless and largely based on gossip and are intended to determine a smooth start to the 2024 academic year. Furthermore, given the damaging allegations continued in this report, the minister reserves the right to take the necessary legal action.”
Nzimande reaffirmed his and his department’s commitment to clean government within the department and its entities.
“He remains focused on the immediate task of preparing for the start of the 2024 academic year and we call upon our post school education and training stakeholders not to be distracted but to focus on the start of the academic year.”
The phone number provided on Ntumba’s consultancy website was not working on Friday and an email was not acknowledged. Requests for comment from Coinvest and Tshegofatso Ntumba also went unanswered.
Daily Maverick received no response from NSFAS or Khosa, despite emails and calls to the provided numbers.
NSFAS's spokesperson Ishmael Minisi was quoted by SABC saying: “There is absolutely nothing wrong that the leadership has done. They have not received any money from anyone as it is being alleged that there has been such. There is no money that the chairperson has received for his personal gain nor the minister nor the South African Communist Party.”
Rudie Heyneke, Outa’s investigations manager, said it was “unethical, highly irregular and against all the principles of good governance” for the chairperson of the board to meet with service providers and ask for their input on board decisions. “Why was it even necessary for Khosa to meet these people and to update them on internal matters and request their input for the way forward?”
Heyneke said the Werksmans’ report vindicated Outa’s findings on Nongogo’s involvement with the awarding of tenders to Coinvest, Ezaga, Norraco and Tenet Technology (Tenetech). “Outa is satisfied with the outcome of the Werksmans’ investigation. While Khosa – on the advice of Ntumba – appointed Werksmans in the mistaken belief that they would be able to control the firm and influence the outcome of the investigation, this plan definitely backfired,” Heyneke said.
“While NSFAS acted on Werksmans’ recommendation that Nongogo should be removed as CEO, it remains unclear why the four service providers haven’t been removed yet, especially since thousands of students countrywide are still waiting for allowances and tuition fees for last year to be paid – it is clear for everyone to see that the service providers are not capable of doing the job… To date, Outa understands that the service providers have not received any notification of any cancellation.”
On 4 October 2023 NSFAS told the Higher Education Portfolio Committee in Parliament that 25,803 (or 6.5%) of the required beds had been accredited. Heyneke said it was “highly unlikely” that there will be enough beds accredited in time for the new academic year, which starts in a couple of weeks.
Outa has shared the recordings and investigation report with authorities and is writing to Ramaphosa requesting Nzimande’s removal as a Cabinet minister and Khosa’s removal as NSFAS chairperson. It also plans to open a criminal complaint against Nzimande, Khosa and Ntumba, and inform Nedbank about the conduct of their client Coinvest. “Nedbank needs to thoroughly investigate their client and reconsider their sponsorship.”
Outa’s full report on the NSFAS recordings has been posted online as have the full recordings: meeting one and meeting two.
On 1 January, EWN reported that NSFAS was yet to disburse allowances for 20,000 students. The NSFAS board held an extraordinary meeting on 31 December to discuss outstanding issues, which included the student allowances, budget adjustments and preparations for the 2024 academic year.
Department of Higher Education spokesperson Ishmael Mnisi was quoted as saying: “The NSFAS is determined to conclude all the outstanding 2023 disbursements by the 15th of January 2024, in consultation with the affected institutions. This will ensure that the 2023 bursary allowances do not affect the returning students for the academic year 2024.”
Jacaranda FM reported this week that the South African Union of Students said it didn’t believe NSFAS had the capacity to meet its own deadline, with chairperson Asive Dlanjwa saying they had given NSFAS until the end of the month to conclude all outstanding payments. “The budget has been cut by about R14-billion from students of the poor who are going to be lining up at institutions of higher learning.
“That on its own is a recipe for pandemonium coupled with the infective systems at NSFAS – failing to administer funds from a month-to-month basis. Those things alone guarantee that we are going to have a disastrous registration period.” DM