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The Democratic Alliance can reveal evidence of corruption or
collusion, emerging from the Northern Cape Department of Economic
Development and Tourism’s first quarterly report for the 2015/16
financial year. The report reveals that technical assistance to access
tenders, or preference for contracts, has been given to the spouse of
the MEC for Finance, Economic Development and Tourism – John Block. It
also shows that a company belonging to the spouse of the Chairperson
for the Portfolio Committee on Finance was pre-targeted to receive
financial support from the department’s Economic Growth and
Development Fund.

Each of these scandals is evidence of maladministration and
mismanagement of the department’s mandate to drive economic
opportunities in the province. Instead of expanding opportunities to
all entrepreneurs, opportunities are restricted and emerging
entrepreneurs are denied their chance to succeed because they do not
have the right political connections. The Economic Growth and
Development Fund is the department’s main empowerment vehicle to
broaden access to opportunities for entrepreneurs who cannot secure
funding on their own. We cannot turn it into a system to dispense
patronage to people with the right political connections.

The report reveals that Insimbikazi Trading CC, which is registered on
the Companies and Intellectual Property Commission database as
belonging to Ms. Noluthando Silungile Block, received assistance to
obtain public sector contracts. She is the sole director and also the
spouse of John Block. As further confirmation of her connection to
him, the physical address listed for Insimbikazi Trading is also the
home address of the MEC for Finance, Economic Development & Tourism.
The company was registered on the 22nd of September 2008. According to
the quarterly report from the department of Economic Development and
Tourism, Insimbikazi Trading is in the electrical industry and
supplies geysers.

It is unacceptable that the spouse of any MEC benefits from any
government contracts. This is a massive conflict of interest which has
not been properly disclosed. It means that the household of the MEC
for Finance, Economic Development and Tourism has benefited from this
assistance, whether directly or indirectly. He is abusing his power
and the public resources available to him through his department on a
grand scale.

It is highly unlikely, bordering on impossible, that the assistance
was given to Insimbikazi Trading without anyone in the department
knowing that the MEC’s spouse would reap the benefits.

We are disturbed by the department’s denial of the ownership of
Insimbikazi Trading and its attempts to cover up the corruption. The
programme director for the unit, Mr. Darryl Christians, denied on
record in the committee meeting that the company is registered to Ms.
Block despite the fact that CIPC records show that the official was
misleading the Legislature.

Assistance was also rendered to Karibuni Security Services, a security
company which has been established since 2000. The director of
Karibuni Security Services is Mr. Motsamai Rantho. Karibuni Security
Services has been successful in securing its own contracts, such as
providing security services to StatsSA and at the site of the
psychiatric hospital in Kimberley. It was recently awarded a contract
worth R69 million by the Northern Cape Department of Health to provide
security services at the five district offices.

By delivering assistance to a company of Karibuni’s size, the
department is not expanding economic opportunities to all. A company
of this strength should not need government intervention when
contracts are awarded. Assistance to a well-established business like
Karibuni Security Services redirects resources which should have been
allocated to emerging entrepreneurs. Entrepreneurs, especially black
entrepreneurs, need support from government. Contrary to its own
objectives, the department is not expanding opportunities to new
companies and emerging entrepreneurs. It is, in fact, restricting
opportunities to the politically connected elite and recycling
opportunities to the same companies.

We have followed up with written questions to the department to
determine the nature of the assistance given to Insimbikazi Trading
and to Karibuni Security Services. Our questions were submitted on the
21st of August and, according to the Rules of the Northern Cape
Provincial Legislature, we should have received a reply by no later
than the 7th of September. To date, we have not received any reply and
the department’s silence on this controversial issue is deafening.

We have been informed that Insimbikazi Trading received a contract to
supply equipment to Eskom. We will be following up this information to
determine the financial value of this contract.

The department’s Economic Growth and Development Fund pre-targeted
three companies for funding. Being pre-targeted means that the
department identified you for support, including financial assistance.

One of the three companies is ABC Tours and Sons, which belongs to the
spouse of the Chairperson for the Portfolio Committee on Finance,
Economic Development and Tourism. The Chairperson for the Portfolio
Committee, Ms. Gail Parker, also happens to be the deputy secretary of
the provincial ANCWL.

Whenever you drive past her house, you will see vehicles branded with
the ABC Tours and Sons logo parked inside the property. The department
also did not refute the statement that it pre-targeted a company
belonging to the spouse of the Chairperson for the Portfolio Committee
on Finance, Economic Development and Tourism.

The Economic Growth and Development Fund needs to prioritise
entrepreneurs who cannot secure financing on their own. We do not wish
to speculate on the personal finances of the Chairperson of the
Portfolio Committee or her family, but it is unlikely that a highly
paid member of a provincial legislature needs to apply to the Economic
Growth and Development Fund as a last resort. She is likely to have
succeeded with an application for a business loan.

The second of the three companies that was pre-targeted for funding is
Jakes General Dealer in De Aar. It was advertised for sale on Gumtree
for R550 000 on the 15th of July 2015. We get the impression that the
owner received funds to renovate his shop and is now selling it to
turn a profit. During the presentation, the department appeared
shocked at this turn of events. Why does the department not monitor
the companies that receive assistance? How does it ensure that
companies are financially sustainable if it just hands over the cash
and goes away?

We cannot risk becoming desensitized to corruption of this nature. The
report which reveals these facts only covers the first three months of
the financial year. It is not acceptable that a single cent of public
funds, which must support entrepreneurs and SMMEs, is being
misdirected to benefit the MEC and his friends.

The DA has submitted a raft of questions to the Legislature on these
matters and will closely monitor responses.

Issued by DA