Sasol axes shady BEE partner

sasol2Petrochemical giant Sasol has pulled the plug on a shady empowerment deal with union boss Simon Mofokeng and wife Maureen after Business Times exposed how they used fake documents to clinch contracts worth over R300-million.

But this still leaves questions unanswered, including how Sasol could have done business with Mofokeng’s company for 13 years before uncovering the deception.

Sasol confirmed this week it would report a case of fraud to the police, which means the Mofokengs are likely to face charges along with their financial director, Vusani Moyo.

Simon Mofokeng is the general secretary of Cosatu-affiliated Ceppwawu (Chemical, Energy, Paper, Printing, Wood and Allied Workers Union) – a serious conflict of interest, as Ceppwawu has a major presence at several of South Africa’s top listed companies, including Sasol.

Sasol, which is listed on the JSE and the New York stock exchange, said on Wednesday it had cancelled its coal-handling contract with Khotso Batho “with immediate effect” for issuing “fraudulent letters of good standing to Sasol”.

“Sasol is not immune to corruption, but in instances such as this, where acts of fraud are identified, we will act swiftly and decisively,” said Sasol CEO David Constable.

The scandal has also sparked a major overhaul of Sasol’s procurement processes to make it harder for contractors to get away with fraud. It also launched an internal probe into the role of Sasol staffers, including the likelihood that they had failed to act against Khotso Batho despite being given evidence of wrongdoing.

“Any member of staff found to have knowingly facilitated a corrupt or noncompliant relationship with this service provider will face disciplinary action,” said Constable.

Well-placed sources told Business Times previously that Mofokeng had enjoyed a close relationship with Sasol top brass, including former Sasol Mining MD Hermann Wenhold, who is now group safety manager.

Sasol declined to confirm whether Wenhold or other senior executives were under investigation.

A three-month investigation by Business Times previously exposed how Mofokeng used his influence as a union boss to extort special treatment for his company from Sasol, which renewed its contract twice even though it failed to comply with its procurement rules.

These included needing a tax clearance certificate and letters of good standing from the labour department proving Khotso Batho was up to date with payments to the government’s compensation fund.

Mofokeng earned a salary of R130 000 a month as a Khotso Batho executive while employed as a full-time Ceppwawu office bearer, even though the union does not ordinarily allow its salaried top brass to hold paid outside employment.

Business Times established that Khotso Batho owes the SA Revenue Service at least R22-million in unpaid taxes, has failed to produce audited financial statements in the last three years, and is up to a year behind in submitting its VAT, PAYE and UIF returns.

It has been in arrears with the compensation fund since 2001. –