Lerato Mbhiza
THE Special Investigating Unit (SIU) welcomed a judgment on Wednesday from the North Gauteng High court to dismiss with costs an application brought by 999 Music and its founder Arthur Mafokate to reconsider a preservation order of a luxury property in Midrand.
The property – an upmarket guest house – was purchased with funds from the National Lotteries Commission (NLC) meant for community and developmental projects, therefore it constitutes proceeds of unlawful activity, she SIU said in court papers.
Mafokate is the sole director of the South African Art and Development Association (SAADA), Roadshow Marketing and 999 Music and he received a grant of R 9.3 million from the NLC to assist unemployed youth in poor and rural areas to gain skills in music, film, radio and media production.
The grant was paid in two installments. The first half – an amount to R4 650 000 was made on 28 October 2014 and the second half on 13 November 2015.
An SIU investigation revealed that money from the SAADA account was transferred to Roadshow, thereafter it was transferred into a home loan bank account, which was used to purchase the property in Midrand for R7.5 million.
In his submission, Mafokate said the purpose of the funding was for a talent project which was launched on 12 March 2015 and argued that the first payment was used to pay for the required services and that he used his funds from Roadshow Marketing to complete the project.
Mafokate said that in light of this, he did not see anything wrong in using part of the grant money to buy a lodge.
The High Court found after examining the final project report Mafokate submitted to the NLC, that Mafokate acted in bad faith, with Judge Mandlenkosi Percival Motha saying that according to their own calculations, Mafokate could not have spent more than R1.8 million for the entire project and that he was supposed to pay back over R7.1 million.
Furthermore, Judge Motha said Mafokate’s submission to the High Court raised more questions than answers concerning his implication in several further problematic concerns.
“The 999 Music’s version leaves this court with more questions than answers. Indeed, this court is left with reasonable grounds to believe that the property was the proceeds of unlawful activities. It also did not help that counsel submitted that it 8 years later, and the respondent got together what it could. This court is not persuaded that Mr. Mafokate’s Roadshow Marketing carried the project as alleged,” Motha said.
The SIU was, in terms of Proclamation Nmber R23 of 2020, authorised by President Cyril Ramaphosa to investigate allegations of corruption and maladministration in the affairs of NLC and the conduct of NLC officials and to recover any financial losses suffered by the State.
The unit collaborated with the National Prosecuting Authority to obtain the preservation order as part of the National Anti-Corruption Strategy, which sees law enforcement agencies coming together to eradicate corruption in South Africa.
The SIU said in a statement this judgment paved the way for the forfeiture application to go ahead and possibly recover the money that the NLC lost and that the preservation order of the Midrand property was part of the implementation of SIU’s investigation outcomes and consequence management to recover cash and assets lost by State institutions due to alleged corruption or negligence.
INSIDE POLITICS