By Paddy Harper
The Ingonyama Trust Board (ITB) and its business wing, Ingonyama Holdings, paid R41 million over a 12-month period to a company that was set up only five months before the payments began in March 2021.
The money was paid in three tranches, R10 million in March, R10 million in July and R21 million in November, to two law firms and to Ingonyama Holdings itself for services rendered by AIN Private Capital Pty Ltd, which was registered with the Companies and Intellectual Property Commission (CIPC), on 20 November 2020.
AIN’s director is Leandro “Lee” Samuels, who has links to a number of companies speculating in the energy and other sectors.
A whistleblower in the ITB told the Mail & Guardian they believed the money was “gone” and that the payments had been made as part of an attempt to “syphon off funds” from the board.
The ITB administers about three million hectares of land in KwaZulu-Natal and collects commercial rents and land use rights on behalf of the Ingonyama Trust, whose sole trustee is the Zulu monarch.
The board has been at loggerheads with the auditor general and parliament’s land reform portfolio committee over its poor corporate governance and serial negative audit outcomes.
The R41 million was paid against the wishes of board members brought in by Agriculture, Land Reform and Rural Development Minister Thoko Didiza to assist with stabilising the entity.
The payments set off alarm bells among ministerial deployees, with one member, Linda Zama, resigning over the R21 million being transferred before the two R10 million payments had been accounted for and with no detailed breakdown of how the R21 million would be spent.
ITB deputy chairperson Zethu Qunta also objected to payments being made without proper accounting processes being followed and tried to delay the process, but she was overruled by the other board members, including chairperson Jerome Ngwenya.
The auditor general slapped the ITB with a qualified audit opinion last November for failing to provide “key financial information” about the payments in its annual financial statements and asked the board to submit consolidated financial statements to enable it to audit the transactions. But the land entity, which falls under the department of agriculture, land reform and rural development, has failed to do so.
According to ITB memorandums leaked to the M&G by the whistleblower, a decision to “capitalise” Ingonyama Holdings was taken at a board meeting on 11 March 2021.
Ingonyama Holdings was set up in November 2019 — with Ngwenya and former ITB chief executive officer Lucas Mkhwanazi appointed as directors — as a business or investment wing for the land entity.
In terms of the decision, R10 million was to be paid to the ITB’s attorneys, Mason Incorporated, “to meet the fees of the professional service providers of the Ingonyama Holdings” which had “no facilities in place” to accept the transfer.
“Detailed reports” would be provided by the attorneys as to when funds — R2 million of which would be set aside to assist traditional authorities in working with municipalities — were disbursed.
According to financial records, the payment was made to Mason Inc on 24 March 2021.
Mason Inc director Carl Johnson declined to comment on who the money was paid to.
According to financial records, on 18 June 2021, a cash deposit of R60 000 was made into Ingonyama Holdings’ bank account — which was previously empty — at FNB’s Ballito branch. It is not yet clear who made the deposit.
On the same day, AIN submitted an invoice to Ingonyama Holdings for another R10 million for “services related to the services agreement 8 March 2020”.
The invoice detailed work done as “Phase 2 delivery of 10 point plan; ILPoS implementation; PaARMA implementation; BIF implementation; organisational development process; research and development and operational execution expenses.”
On 1 July 2021, Suewellan Ellis, the project manager in Ngwenya’s office, sent him a memo requesting payment of R10 million to Jafta Incorporated for “fees due to various service providers” for legal, trust, business and other services to Ingonyama Holdings. Ellis motivated that the money be paid to Jafta, rather than Ingonyama Holdings, which “at this stage has no systems in place”.
In the memo, Ellis said Ingonyama Holdings had entered into two joint ventures through subsidiary companies and had to pay for professional services, the costs of which were still “estimated”. According to the ITB’s records, the payment was approved by Ngwenya and paid to Jafta Incorporated the same day.
Attempts to secure comment from Jafta Incorporated, whose offices in Durban are temporarily closed, were unsuccessful at the time of writing.
Sources at the ITB said no reports or invoices for the payments were received from Ingonyama Holdings during this time for the R20 million.
This was confirmed by ITB chief financial officer Siyadumisa Vikalakzi, who told the portfolio committee last October that they had been unable to secure financial information from Ingonyama Holdings for the compilation of financial statements.
On 11 November 2021, Vilakazi received a request for a further R21 million from Ingonyama Holdings for payment to AIN.
Vilakazi, who was seconded to the ITB by Didiza to assist in improving corporate governance, passed the request on to chief executive Vela Mngwengwe. Mngwengwe refused to sign off on the request because documentation meant to have been in a master collaboration agreement between Ingonyama Holdings and AIN had not been provided.
On 21 November 2021, Mkhwanazi wrote to Mngwengwe again, requesting that the R21 million be transferred, reminding him that “the same matter” had been discussed at a meeting with Ngwenya since the first submission was made.
“As indicated during the above said, we request a transfer of R21m for Ingonyama Holding to honour service provider invoices that are due and payable in terms of a master collaboration agreement entered into between AIN Capital Consortium and Ingonyama Consortium,” Mkhwanazi wrote.
He wrote that the master collaboration and shareholders agreements were being made available — along with Ingonyama Holdings’ bank details — and asked Mngwengwe to “be of assistance to us as we are to ensure that our service providers meet the agreed upon timelines”.
The next day, Mngwengwe wrote to the board saying he had not processed the submission because documents, which Mkhwanazi had undertaken to provide, were missing.
Mngwengwe said he could not approve the payment because of the “absence of supporting documents; the required is above the delegated limit and also since it was doubtful whether there is board authorisation for the payment of the envisaged funds to the Ingonyama Holdings”.
Mngwengwe asked the board to “consider the request for payment” and to provide clarity on how to deal with such requests in future should they be received.
On 23 November, the ITB held a board meeting to discuss the request.
According to its minutes, Zama and Qunta had opposed the money being paid, with the former, who had questioned the earlier payments at a board meeting, resigning and leaving the meeting.
“The board notes that advocate Linda Zama modified her earlier dissenting view, which was that she was dissenting unless she was provided with the resolution which led to the signing of the master collaboration agreement on 27 November 2020, as well as the resolutions approving the earlier transfers of R20m,” the minutes said. “The modification was to the effect that she was immediately resigning from the board due to her serious concerns about the imminent transfer of R21m, and she immediately left the meeting.”
According to the minutes, Qunta raised concerns that she was “from a governance point of view, concerned that there is no report on how the initial R20m was spent and how another R21m is to be paid without any report setting out details as to how this money is to be spent”.
Qunta had suggested that her “reservations and concerns could be allayed if payments to be made in tranches while all outstanding information was being gathered” and that Vilakazi would only release money once this was done.
But the meeting resolved that the payments should be made, regardless of whether the conditions agreed upon, which were “not a qualification of the conditions of the board’s resolutions”, were met.
Zama, who apparently withdrew her resignation after consulting Didiza, declined to comment.
Qunta resigned from the ITB last year.
Attempts by the M&G to contact the directors of AIN, Leandro and Venita Samuels, who run the business out of residential premises in St Andrews Road in Parktown, Johannesburg, were not successful at the time of publication.
Leandro Samuels did not answer calls and messages on two of the cell phone numbers listed in his name, while the landlines registered at the premises, at which a number of other businesses are registered with the CIPC have been disconnected.
According to an online profile, Samuels was a director of Anglotel from 1994 to 1999 and a director of an empowerment project called Madiba Bay in the Eastern Cape from 2000 to 2008. His CIPC profile lists his occupation as self-employed and working for the Catholic Church.
On Wednesday Mkhwanazi distanced himself from the payments made to AIN, saying that Ngwenya dealt with finances.
Mkhwanazi was unable to tell the M&G what the payments to AIN were for and when Ingonyama Holdings books would be audited.
“I’m not sure. It was a variety of services, but you will have to ask Ngwenya. I never dealt with these people directly. I did not deal in detail with AIN myself. Ngwenya dealt with them. I don’t know anything about our dealings with them. Talk to Ngwenya. I don’t deal with that side of things or accounting. Please talk to Ngwenya. He will provide you with all the details about AIN,” Mkhwanazi said.
He said he was “not sure” when an audit would be carried out to account for the R41 million and why it had not been done as requested by the auditor general. “You will have to ask Ngwenya.”
The auditor general’s spokesperson, Africa Boso, said they had given the Ingonyama Trust a qualified audit opinion for the 2021-22 financial year over the failure to provide financial information about Ingonyama Holdings.
“The financial statements of the Trust received a qualified opinion for their omission of key financial information regarding Ingonyama Holdings in their financial statements,” Boso said. “We have recommended that consolidated financial statements be prepared to address this omission. To date we have not received the consolidated financial statements and therefore have not audited them.
“We will audit these transactions upon receipt of the consolidated financial statements,” he said.
Boso referred all other queries about the matter to the ITB.
The whistleblower said they were concerned that there was “a web of corruption in the board”.
“The next move is to drain the coffers of the trust such that it is unsustainable and declare it bankrupt and this will happen in the next six months. As you can see, a large amount of money was laundered into the accounts of Ingonyama Holdings. Subsequently all the money will be transferred there and used for self-enrichment. Once the money is moved it will mean the end of the Ingonyama Trust Board without the people deciding whether that is what they want.”
Didiza is in the process of appointing a new board at the Ingonyama Trust, but it was delayed after the monarch’s nominee to replace Ngwenya, Jacob Mnisi, declined the post because of tribalism in response to him taking on the job.
Her spokesperson, Reggie Ngcobo, said he had sent questions to the ITB about the payments.Ngwenya had not responded to messages, emails and phone calls from the M&G at the time of writing.