Affidavit of Zanele Lwana in support of charges against EFF, Julius Malema, Floyd Shivambu, Brian Shivambu, Matsobane Phaleng and 26 others
I the undersigned Zanele Lwana do hereby make oath and state:
1. I am the Deputy President of Black First Land First (BLF), and I am duly authorized to depose to this affidavit on behalf of BLF.
2. Unless I state otherwise or the context of what I say indicates the contrary, I confirm that the averments contained in this affidavit fall within my personal knowledge and are to the best of my belief both true and correct. Insofar as I make submissions on legal matters, I do so on the advice given to me by my legal representatives, which I received during the preparation of this affidavit. Where I rely on fact outside my personal knowledge, I verily believe same to be true and correct.
3. BLF is a Black Consciousness, Pan Afrikanist movement which embraces the Sankarist leadership ethos. It is registered with the Independent Electloral Commission as a political party and is situated at 0514 Klampton Towers, 5th floor, cnr of Commissioner & Von Wielligh Street, Johannesburg.
4. The purpose of this affidavit is to provide evidence to the South African Police Services (SAPS) in support of charges of fraud, theft, corruption and money laundering against the those indicated in paragraph 6 hereunder, as well as the EFF, Julius Malema, Floyd Shivambu, and Matsobane Phaleng.
5. A VBS report titled ‘The Great Bank Heist’ which was commissioned by the South African Reserve Bank (SARB) and released on 10 October 2018, found that
from 1 March 2015 to 17 June 2018, R1.8 billion was unjustifiably received from VBS by about 53 persons. (‘The Great Bank Heist’ report. See link, http://www.politicsweb.co.za/documents/how-vbs-was-looted-the-full-report)
6. Advocate Terry Motau, the forensic investigator who inquired into the collapse of VBS Mutual Bank, accordingly recommended in the said report that action be taken to recover the lost monies from the undermentioned parties:
‘1. Vele and its associates + R936 million
2 Tshifhiwa Matodzi = R325 million.
3 Free State Development Corporation = R104 million.
4 Kabelo Matsepe = R35 million.
5 Sipho Malaba R34 million.
6 Phophi Mukhodobwane R30 million.
.7 Paul Makhavu = R30 million
8 Robert Madzonga = R30 million.
9 Andile Ramavhunga = R28 million.
10 Solly Maposa = R24 million
11 Ralliom Razwinane = R24 million.
12 Firmanox = R17.4 million
13 The Venda king, Toni Mphephu = R17.7 million.
14 Ndivhuwo Khangale = R16.8 million.
15 Sechaba Serote = R16.6 million.
16 Ernest Nesane = R16.6 million
17 Brian Shivambu = R16 million
18 Foxburgh = R15 million.
19 Paul Magula = R14.8 million.
20 Charl Cilliers = R12.6 million
21 Tiisang Private Capital = R12 million.
22 Maanda Manyatshe = R11 million.
.23 Sasa Nemabubuni = R9 million.
24 Sabicorp = R8 million.
25 Avashoni Ramikosi = R5.9 million.
26 Takalani Mmbi = R4 million.
27 Phillip Tshililo = R2 million.’
(‘WATCH: These are the people who ‘looted’ VBS Mutual Bank’ by Kabelo Khumalo. See link, https://www.iol.co.za/business-report/companies/watch-these-are-the-people-who-looted-vbs-mutual-bank-17424884)
In elaboration of the criminality of the EFF, Julius Malema, Floyd Shivambu, Brian Shivambu and Matsobane Phaleng
7. ‘The Great Bank Heist’ Indicates that Brian Shivambu, who is Floyd Shivambu’s younger brother, received an amount of R16,148,569 as ‘gratuitous payments’ from VBS Mutual Bank.
8. While the report does not indicate where that money received by Brian Shivambu ended up, further evidence as elaborated below suggests that a considerable amount went to the Economic Freedom Fighters (EFF), Julius Malema and Floyd Shivambu.
9. In ‘The Shivambu Brothers and the Great VBS Heist’, an article written by Pauli Van Wyk for Scorpio (Daily Maverick’s Investigative Unit) and published on 11 October 2018 on the newspaper’s website, the following allegations are made by Van Wyk who in turn says she has been informed by sources:
a. The EFF as well as its Deputy President, Floyd Shivambu, have both ‘benefited financially from the VBS Mutual Bank scandal’;
b. Floyd Shivambu received about R 10 million ‘VBS-rand’ via Brian Shivambu;
c. ‘The evidence (which is kept under ‘lockdown’) detailing the Shivambu brothers’ nefarious activities consists of bank statements of the relevant entities – it was not included in the report to SARB because the investigators’ mandate related specifically to VBS’;
d. ‘[T]here were more money flows from VBS through other fronts to the EFF and Shivambu,”
e. The EFF allegedly unlawfully received payment of R1.3-million from the VBS Mutual Bank into its (EFF’s) bank account (this was confirmed by three sources to Scorpio’s Van Wyk); and
f. The said three sources further revealed that Brian Shivambu allegedly transmitted approximately R10 million via Sgameka Projects (of which Brian is the sole director) into Floyd Shivambu’s personal banking account;
10. In a further article ‘VBS bank heist: EFF’s family ties and moneyed connections’
published on the DM website on 21 November 2018, Scorpio’s Pauli Van Wyk (the author), informed by sources makes the following further allegations:
On why VBS funds entering and leaving Sgameka are proceeds of crime
a. Evidently as indicated in the Great Bank Heist report, the funds of deceased mine workers (in respect of which widows and orphans were beneficiaries), municipalities, and stokvels were deposited at VBS. This money was stolen by politicians and others who were well connected via different schemes including through fake accounts. To this end management of VBS shifted this money out of the bank through various illegal schemes.
b. Sgameka Trading Pty Ltd (Sgameka), which is a business that is managed and owned by Brian Shivambu, is one of the primary beneficiaries of illicit VBS funds. Brian Shivambu contended that he received money only from Vele. The investigation by Scorpio indicates this to not be true.
c. The Scorpio investigation found 4 factors which indicate ‘that Sgameka operated as a front and a slush fund for the EFF and select EFF leaders’, namely:
i. ‘WhatsApps: Scorpio has a series of verified WhatsApps between chairman of VBS Tshifhiwa Matodzi and Phopi Mukhodobwane, general manager of treasury at VBS, where a transfer of money from related party Malibongwe Petroleum Pty Ltd to Shivambu’s Sgameka is discussed’. In this regard, ‘[o]n 8 June 2017, Matodzi requested a transfer of R5-million into the account of Sgameka’. Matodzi remarked as follows about Sgameka: “This is an extremely strategic account.’ Since as alleged Matodzi ‘kept himself busy with bribing influential politicians in order to bamboozle municipalities into investing in VBS, his remark over Sgameka’s influence is hair-raising’
ii. ‘Email: Floyd Shivambu is linked directly to Sgameka by emails from his personal gmail account relating to an additional property.‘
iii. ‘Sgameka’s income: Sgameka had no legitimate income, did not operate like a normal business bank account and paid no taxes’.
iv. ‘Sgameka’s true income streams: Sgameka received R16,1-million from companies named Robvet Pty Ltd, Wegezi Power Holdings Pty Ltd, Vele Investments ltd, Malibongwe Petroleum as well as cash deposits and what is labelled as “allocations”. Sgameka (accordingly) did not only receive money for (rendering) “consulting services” to Vele, as Brian Shivambu claimed last month’.
d. Thirteen (13) payments amounting to R16,148,569 were made to Sgameka with illicit VBS funds between June 2017 and February 2018. Taking into account the income stream of Sgameka, ‘The Great Bank Heist’ report indicated as follows in relation to the companies concerned:
i. Malibongwe Petroleum
A false deposit of R40 million was created for Malibongwe Petroleum. This company became a mechanism to illegally shift money from VBS.
The company was headed by Matodzi and acquired majority shareholding in VBS bank via fraud. Moreover it benefitted from countless fraudulent transactions. It was found to be the ‘principle beneficiary of the looting’. Furthermore ‘VBS and Vele have been operated as a single criminal enterprise with Matodzi firmly at the helm’.
To procure investments by municipalities in VBS, Robvet was operated as a slush fund to make payments of ‘commissions’ to targeted municipal managers and politicians of influence. To this end VBS funds were illicitly shifted directly to Robvet, or to Robvet via the Vele group companies not limited to Malibongwe Petroleum and Wegezi. The modus operandi entailed payments being made from Robvet to front companies, mayors, politicians and municipal managers either in cash or via electronic transfers. The Great Bank Heist report found that VBS effected payments from Robvet to front companies to benefit a number of municipal officials. Furthermore the said report indicates that the management of VBS ‘did not regard the payments (made by Robvet) as legitimate operating expenses and sought to conceal them’.
e. ‘The Great Bank Heist’ found the income stream of Sgameka to be criminal. The fact that Sgameka received funds from Robvet indicates that those politicians controlling Sgameka were involved in influencing municipalities to action investments in VBS.
f. The illicit shifting of money from Sgameka read with the WhatsApps message indicated above regarding the ‘extreme strategic’ nature of the Sgameka account suggests criminality on the part of the perpetrators.
g. Evidently and as indicated in bank statements, upon money being received into the Sgameka account it was immediately shifted mostly to EFF, Mahuna Investments and the Grand Azania Pty Ltd accounts. Sgameka was accordingly used to siphon VBS funds illicitly. (See Annexure “A”, Sgameka’s bank statement).
h. Sgameka did not receive any income from any entity except from a number of ‘VBS schemes’. It received the final deposit on 23 February 2018. This was shortly prior to VBS being put under curatorship (which came into effect on 11 March 2018). To this end money was only moved out of the Sgameka account since February 2018. The movement of money into the Sgameka account is accordingly compromised and therefore illegal. In this regard the following payments are significant:
i. Four payments amounting to over R1.2 million were effected into two bank accounts of EFF between July 2017 and December 2017.
ii. Nine payments totaling in excess of R4.8 million was paid by Sgameka into the account of Mahuna between June 2017 and February 2018.
On VBS funds illicitly shifted to Mahuna via Sgameka
i. The owner and sole director of Mahuna is Matsobane Phaleng who is the cousin of Julius Malema.
j. The Mahuna account, same as with Sgameka, was operated as a slush fund. To this end it had no proper expenses and income. It also did not pay any tax. Matsobane Phaleng was a front to siphon funds for the EFF and Julius Malema.
k. Eight payments amounting to R110,000 and which was described as
‘director’s fees’ was moved out of the Mahuna account between July 2017 and February 2018 and was, according to Scorpio’s sources, paid to Malema’s cousin, Matsobane Phaleng. In this regard the funds payed out by Mahuna was previously received by it from Sgameka.
EFF benefited from VBS funds illicitly moved via Mahuna and Sgameka
l. Regarding Scorpio’s report in October 2018, ‘that the EFF received around R1.3-million in illicit VBS funds and that Sgameka paid about R10-million into Floyd Shivambu’s account … [u]pon further scrutiny of the evidence, it is clear that the income streams were more complex, based on the use of various fronts in order to siphon illicit funds towards various role-players.’ To this end ‘Scorpio found more illicit VBS funds than initially mentioned earmarked for the EFF.’
m. Yet another amount (over and above the R1.3 million mentioned above) in the sum of R600,000 designated for the EFF was moved from Mahuna into various bank accounts between July and August 2017. It is indeed significant that the movement of monies from Mahuna was described on the bank statements as ‘July 26’ and ‘EFF GP’. 26 July is in fact the birthday of the EFF thus evidencing that the payments described as “July 26” were payments made for the 2017 birthday celebration of EFF.
n. Scorpio has identified in excess of R1.8 million of VBS funds that has been illicitly moved from Mahuna and Sgameka so as to ‘prop up the EFF.’
o. The Scorpio investigation indicates that there are further funds that have been allocated for the EFF that were shifted from Mahuna.
On the VBS funds illicitly allocated via Mahuna to the Sandown property situated at 49a Edward Rubenstein
p. Julius Malema rented a property located at 49a Edward Rubenstein, Sandown, Johannesburg from 2012.
q. The neighbours of the property situated at 49a Edward Rubenstein have indicated that Malema resided at the said property until very recently. Malema has indicated that he currently stays in Goodwood, Cape Town.
r. Title deed documents seen by Scorpio suggest that during or about June 2017, the relevant property was transferred to the ‘Economic Freedom Fighters’. The buying price was reflected as R5,250,000. Dali Mpofu, the national chairperson of EFF, was involved in facilitating the deal. Mpofu did not react to Scorpio’s questions. The origin of the funds used to pay and the total amounts paid thus far for the house, are currently unknown, according to Scorpio. Julius Malema has avoided answering questions about the funds for the property in Sandown. He had said to Scorpio, “The EFF will answer that one”. Moreover Mbuyiseni Ndlozi, the National Spokesperson of EFF, responded as follows via Whatsapp when he was questioned on the issue, “we took a loan from one of the financial institutions”. He also denied that the house was allocated to Malema to live in.
s. Three payments totaling R430,000, which was allocated for the said property, was moved from Mahuna between July 2017 and February 2018 into various bank accounts. Scorpio’s investigation suggests that these bank accounts are in turn connected to a pool and the relevant property which is in EFF’s name. Scorpio’s sources indicate that there is evidence of more VBS funds illicitly moving from Mahuna to this said property.
t. There is further evidence, according to Scorpio’s key sources, of more VBS funds being illicitly used to fund Julius Malema’s lifestyle including that of his family and children.
u. Julius Malema and Floyd Shivambu were evidently aware of proxies used to siphon money. They were also aware that the EFF as well as themselves were illegal beneficiaries of VBS funds.
v. The EFF, Julius Malema and Floyd Shivambu received illicit payments from VBS Mutual Bank via a fraudulent scheme operated in a similar way to the scheme used in the 2012 ‘On Point Engineering’ corruption saga. To this end Juilius Malema was charged with fraud, corruption, money laundering and racketeering in that he used fronts and proxies to siphon money (to himself and his family) illegally obtained via fraudulent government contracts. While Malema denied any liability, the former Public Protector Thuli Madonsela concluded that he illegally benefited from the ‘On Point Engineering’ scheme. Moreover Madonsela found that Malema misused the Ratanang trust to siphon funds illicitly.
w. Effectively, Sgameka, a company owned by Brian Shivambu (Floyd Shivambu’s brother) made dubious payments to Mahuna, a company owned by Matsobane Phaleng (cousin of Julius Malema). These companies in turn conducted business like slush funds as they moved funds to wherever it was required. Julius Malema and Floyd Shivambu thus via the agencies of Matsobane Phaleng and Brian Shivambu respectively, looted the money of the poor to fund the EFF and their political and private interests.
10. We, Black First Land First (BLF), submit that the above evidence indicates criminal conduct not limited to fraud, theft, corruption and money laundering – on the part of:
a. Those indicated in paragraph 6 herein.
b. the EFF
c. Julius Malema, the President of EFF
d. Floyd Shivambu, the Deputy President of the EFF
e. Brian Shivambu, the brother of Floyd Shivambu; and
f. Matsobane Phaleng, the cousin of Julius Malema.
11. We are hereby charging the above parties accordingly.
12. To this end the SAPS is requested to subpoena, amongst others, the following persons / representatives of entities for questioning and further inquiry towards facilitating the proper administration of justice herein:
a.Those indicated in paragraph 6 herein.
b. Those implicated in the criminal actions of Brian Shivambu, including:
i. Julius Malema
ii. Floyd Shivambu
iii. The rest of the EFF Central Command Team members
iv. Brian Shivambu
v. Matsobane Phaleng
vi. Pauli Van Wyk
viii. Adv Terry Motau SC
ix. Werksmann’s Attorneys
x. Auditors of EFF
1. ‘The Great Bank Heist’ report. See link, http://www.politicsweb.co.za/documents/how-vbs-was-looted-the-full-report
2. ‘The Shivambu Brothers and the Great VBS Heist’ by By Pauli Van Wyk for Scorpio (Daily Maverick’s Investigative Unit). See link, https://www.dailymaverick.co.za/article/2018-10-11-the-shivambu-brothers-and-the-great-vbs-heist/
3. ‘VBS bank heist: EFF’s family ties and moneyed connections’ published on the DM website. See link, https://www.dailymaverick.co.za/article/2018-11-21-vbs-bank-heist-effs-family-ties-and-moneyed-connections/amp/?__twitter_impression=true
4. Annexure “A”: Sgameka’s bank statement
5. ‘WATCH: These are the people who ‘looted’ VBS Mutual Bank’ by Kabelo Khumalo. See link, https://www.iol.co.za/business-report/companies/watch-these-are-the-people-who-looted-vbs-mutual-bank-17424884
I hereby certify that the deponent knows and understands the content of this affidavit and that it is to the best of his knowledge both true and correct. This affidavit was signed and sworn to before me at on this day of 2018, and the Regulations contained in Government Notice R.1258 of 21 July 1972, as amended, have been complied with.
COMMISSIONER OF OATHS