EXCLUSIVE: Free State MECs business deals with government exposed

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Steve Motale

JOHANNESBURG- While the code of conduct for public service employees prohibits public servants and public representatives from doing business with government, a Free State Member of the Executive Council (MEC) is allegedly brazenly amassing millions from organs of state including municipalities in the province through a front company whose sole director is his business partner.

The code of conduct for public service employees, prohibits public servants from doing any form of business directly or indirectly with organs of state, whether in their own capacity as individuals or through companies in which they are directors.

Africa News 24-7 can exclusively reveal that companies linked to Free State Education MEC, Tate Makgoe have been doing business allegedly through a front, Otsile Besnaar with whom he is listed as a director of one of the companies.

Documents seen by Africa News 24-7 show that Makomota Investment Holdings Group and its subsidiary Makomota Stone, have been given lucrative contracts by Nketoana Municipality which includes Free State towns of Reitz, Arlington, Petrus Steyn and Lindley. Makgoe and Besnaar are listed as co-directors of Makomota Financial and Management Services, which is also part of Makomota Investment Holdings Group. Besnaar is the chief executive officer and director of Makomota Investment holdings, Makomota Stone, Makomota Financial and Management Services. He is also listed as a director of Makomota Asset Management Solutions and Makomota Property Investment.

According to documents seen by Africa News 24-7, Makomota Stone and Makomota Investment Holdings were each given a contract.

In May 2011, Makomota Stone was given R2.7m contract to supply and install 6000 Water metres by Nketoana Municipality while Makomota Investment Holdings was during the same period awarded a contract for preparation of GRAP Compliant Annual Financial Statement, a contract which was extended by another three years when it ended in 2013. Makgoe was MEC for Education when these contracts were awarded.

Invoices seen by Africa News 24-7 reveal that from 2011 till 2018, Makomota Investment Holdings alone collected more than R20m from Nketoana Municipality for the same contract which sources say exceeded by far what the municipality had budgeted for the project.

Documents also show that the municipality was invoiced thousands of rand for out of scope work, costs which were also not budgeted for. Although Makomota Investment Holdings was appointed for financial services work, documents seen by Africa News 24-7 show that the company also invoiced the municipality for rehabilitation of solid waste dumping site.

On 4 June, Africa News 24-7 sent questions to Makgoe via WhatsApp which he read but ignored. When a reminder was sent to him the following day, he blocked this writer. On 11 June, questions were sent to Makgoe’s spokesperson, Howard Ndaba, who also failed to respond.

Contacted on his mobile phone on Wednesday 3 July, Besnaar confirmed he and Makgoe were co-directors of Makomota Financial and Management Services. When asked if the company was part of Makomota Investment Holdings, Besnaar vehemently denied, before asking Africa News 24-7 to send him detailed questions via email. When an email was sent, he acknowledged receipt and promised to respond “accordingly”.

However, when he responded via email, he claimed information sought by questions asked by Africa News 24-7 was “subject to confidential provisions of course ordinarily applicable to business”. He then referred Africa News 24-7 to Makgoe.

While Besnaar denied that Makomota Financial and Management Services, a company in which he and Makgoe are listed as directors is part of Makomota Investment Holdings Group, information on his own company’s website tells a different story.

According to www.makomota.com, “Makomota Financial and Management Services (FMS) is a member of the Makomota Investment Holdings Group”. Interestingly, both Makomota Investment Holdings and FMS share the same website, and when a visitor clicks on “our team” icon, it shows the pictures of both Makgoe and Besnaar.

On Makomota Stone website – www.makomotastone.com, under background, the website says “Makomota Stone was established as a subsidiary company in September 2007, serving as a construction and project management division for Makomota Investment holdings”.

Africa News 24-7 investigation has also uncovered that some of Makomota companies were bought as shelf companies in Lynwood Road Menlo Park, Pretoria. A source close to both Makgoe and Besnaar said Makomota name is derived from the first two letters of the names of the three people who founded the company with Makgoe. The source said the other three founders had a fallout with Makgoe who then kicked them out and replaced them with Besnaar as his front. “Everyone in the Free State knows about Makgoe’s involvement in business and how he uses other people as fronts to make millions from government.”

“Nketoana Municipality is just the tip of the iceberg, Makomota does business with several other municipalities and provincial departments in the Free State. This has been going on for years. It remains a mystery why, despite everyone knowing about Mr Makgoe’s illegal actions, no steps have been taken against him,” said the source.