Thabang Mahlakoleng, former North West HOD enters plea agreement in R400m SA Express corruption case

27 Nov 2024

One of four people arrested in connection with an allegedly fraudulent R400m SA Express tender has entered a plea and sentence bargaining agreement and will testify against his co-accused in February 2025.

On Friday, 22 November 2024, Thabang Mahlakoleng, former head of the North West Department of Community Safety and Transport Management, was sentenced to two years in prison or a fine of R200,000 for his role in the alleged R400-million tender fraud involving SA Express.

This comes after he pleaded guilty in the North West High Court for contravening the Public Finance Management Act (PFMA). He was also sentenced to another five years in prison, suspended for five years.

Mahlakoleng, along with Tebogo van Wyk, Nothando Dube and Sipho Levy Phiri – and three airport ground service management companies: Batsamai Investment Holdings, Sevilex Investment Holdings and Lavao Estevao – were charged in this high-profile case that was featured in the second report of the Zondo commission.

The commission found that an SA Express contract worth R400-million was riddled with procurement irregularities, and money was paid for services not rendered.

The four were arrested in September 2022 by the North West Hawks Serious Corruption Investigation Unit and face 34 counts, including fraud, corruption, money laundering and contravention of the Public Finance Management Act.

Read more: Four suspects charged in North West court over dubious multimillion-rand SA Express contract

Mahlakoleng is the first of the accused to come forward, testify in court and expose the alleged SA Express tender fraud.

His plea and sentencing agreement is a significant breakthrough in this State Capture case stemming from alleged irregularities dating back to 2014, when the North West government embarked on a process to reintroduce commercial aircraft to the province’s two airports, Mahikeng and Pilanesberg.

The North West government paid SA Express R183-million for services rendered by the three ground service management companies, which are linked to Van Wyk, Dube and Phiri. No SA Express employees have been charged, but the NPA still needs to complete its indictment.

Mahlakoleng’s plea and sentencing agreement are a silver lining for a province reeling from corruption.

In February 2022, Dr Rachel Makhari-Sekhaolelo, the North West director of public prosecutions, said the province was among the hardest hit by public sector corruption.

SA Express deal

After the 2014 elections, the North West Office of the Premier decided to reactivate public flight services at the two airports and to appoint a new flight company.

The Department of Tourism welcomed six airfreight businesses to Sun City in August 2014 to present their plans. The companies included SSI Holdings, Continental Air Express, Challenger Airline, Phakalani Airways, Mafikeng Air and SA Express.

According to the plea agreement, on or about 26 August 2014, the cluster committee reached a consensus and they allegedly told Mahlakoleng to select SA Express as the “proposed service provider” and submit SA Express to the executive committee (exco) for approval.

Mahlakoleng was also allegedly asked to prepare a memorandum for exco, requesting that it approve the selection of SA Express. Mahlakoleng claims that the main reason he chose SA Express was that it was state-owned.

According to Mahlakoleng, SA Express’s proposal was, however, more expensive than those put forward by other companies.

Mahlakoleng signed the memorandum in November 2014, as did the previous MEC for Community Safety and Transport Management, Gaoage Molapisi. SA Express and the provincial department then entered into a contract for five years, which was signed in March 2015, and became effective on March 27, 2015.

Mahlakoleng’s plea agreement includes additional information about how procurement procedures were allegedly botched and kickbacks paid.

He claims that after discussions with co-accused Van Wyk and an SA Express executive, the contract was amended to remove the department’s involvement in selecting a suitable company to manage the operations of the Mahikeng and Pilansberg airports.

Koreneka was designated as the management company and the prosecution found that Mahlakoleng did not exercise his rights in this regard on behalf of the department, as he should have.

Although he learnt only after the fact that Koreneka had been appointed as the management company, he was content with the appointment because he knew its owner and had allegedly informed her that he “looked the other way”.

‘Grossly negligent’

The court found that Mahlakoleng was grossly negligent in not insisting on the department’s involvement in the company selection. The court also heard SA Express and Koreneka were paid R20.6-million without the proper documentation.

Koreneka had not been involved in any airline-related marketing activities when Mahlakoleng approved the R20.6-million invoice in December 2015.

He admitted: “The main reason why this invoice was allowed to go through and approved for payment was due to the fact that the department did not, as required in terms of the PFMA, put in place and maintain an effective and transparent system and risk management and internal control.”

Mahlakoleng was subsequently suspended in March 2016 and then learnt that some of the funds paid to Koreneka ended up as kickbacks. He also admitted that when the theft of subsidy funds via Koreneka and kickbacks came to his knowledge, he should have reported it to the SAPS or Treasury.

In his admission, he stated: “I learned that the subsidy funds paid to Koreneka were allegedly used to pay bribes. I should have reported the theft of subsidy funds, through Koreneka and kickbacks to SAPS or Treasury as soon as I became aware of it.”

In mitigating circumstances as to why he remained silent, the court found: “When Mahlakoleng went along with the decision to recommend to Exco to select and appoint SA Express, he acted under severe pressure exerted by Exco Cluster and Exco.”

He said he had been in his job for only four months when he was “forced” to implement incorrect procurement procedures and did not want to lose his position.

‘Acted under pressure’

According to a joint statement by the NPA and Hawks, Mahlakoleng has offered to plead guilty in respect of the Public Finance Management Act charges on condition that he receives a non-custodial sentence, which was accepted by the State.

“The main reasons for accepting the plea offer were that he did not receive any of the stolen funds and he is a first offender and acted under pressure when he yielded to the instruction from his political bosses not to follow correct procurement procedures when SA Express was appointed,” the statement reads.

North West acting Hawks head Brigadier Silas Munzhedzi and the NPA’s Makhari welcomed the sentencing.

NPA spokesperson Sivenathi Guyna told Daily Maverick that Mahlakoleng had provided the State with a witness statement on the matter, wherein he set out his knowledge of the activities of other role players in the irregular appointment of service providers.

“The prosecution of the remaining accused is continuing. The trial is to commence on 10 February 2025. They are expected to plead to the charges on the said date,” Gunya said. DM

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Business Maverick

SA Express deal

‘Grossly negligent’

‘Acted under pressure’