Mashaba confirms that Joburg has clawed back controversial R290mln loan from Denel


JOHANNESBURG, 11 December – Joburg Mayor Herman Mashaba said on Tuesday that he had received notice that the R290 million unsecured loan owed to the City by state-owned arms firm Denel has been repaid in line with the loan repayment date of December 10.

This follows the lending of money from the City’s coffers to the cash-strapped Denel through controversial fund management firm, Regiments Capital, via an unsecured loan.

Regiments was managing the City’s R18 billion sinking fund, which is derived from the rates and taxes paid for by the residents when Denel scored the R290 million.

A recent report by AmaBhungane shed light on alleged collusion between Regiments fund managers, former Johannesburg Mayor Parks Tau, and former mayoral committee member for Finance Geoff Makhubo, and how the African National Congress leaders in Joburg allegedly paved the way for Regiments to transfer the R290 million to Denel.

In turn, Regiments was allegedly able to enrich itself to the tune of a R3.42 million fee from Denel for securing the R290 million in debt from the City’s sinking fund. Mashaba has since laid criminal charges of fraud, corruption, money laundering and racketeering against both Makhubo and Tau.

Mashaba said it was through the state capture project that the loan to Denel was made possible in the first place.

“While the City welcomes the repayment of the loan, it is unfortunate that said repayment was made possible through a bailout funded by money acquired from hardworking taxpayers. The bailout has come in the form of a guarantee of R3.43 billion to Denel, which has been marred by allegations of state capture lead by the nefarious Gupta family,” he said.
“With the blessing and alleged aide of councillor Tau – who has admitted on record that he knew of the relationship between Makhubo and Regiments – Makhubo, who was tasked with exercising political oversight on one of the City’s largest contracts, was allowed to feast off the same set of contracts he had oversight over.”
Mashaba said the City was currently at an advanced stage of conducting its own forensic investigation into this matter.
“Once completed, and given the serious nature of this criminality, I have instructed General Shadrack Sibiya, the head of the City’s group forensic and investigation services unit, to set up a meeting with the top leadership of the Hawks to ensure that every effort is made to see to it that blatant criminality is met with the full might of the law,” Mashaba said.


– African News Agency (ANA)