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Fetakgomo Tubatse manager, Johannes Mohlala, asked the SIU to investigate an engineering company while he channelled millions to the defuct VBS bank.

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Sizwe sama Yende

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A Limpopo municipal manager who sicked the Special Investigating Unit (SIU) on an electrical engineer for taking the council to court turned out to be the central figure in the loss of R230 million that was wrongfully invested in a mutual bank.

Johannes Mohlala (60) - according to papers that Mphaphuli Electrical Engineering owner, Lufuno Mphaphuli, filed in the Constitutional Court – approached the SIU on March 10 2017, four days after the company won its case in the Supreme Court of Appeal to be paid R41 million for work done in the Fetakgomo Tubatse Local Municipality in Burgersfort.

It is befuddling that under the SIU investigators’ noses, Mohlala was able to invest the funds in the Venda Building Society (VBS) Mutual Bank against the advice of National Treasury which prohibited engagement of these kinds of banks.

Mphaphuli accuses the SIU of abusing its power in investigating his company and eventually advising the municipality to cancel the R326 million Operation Mabone project that aimed to electrify more that 20 000 rural households.

Mphaphuli has not been able to trade for eight years due to a dragged out R76 million lawsuit the SIU has instituted in 2017 – alleging that the company overcharged. However, parliamentary records indicate that Mphaphuli Consulting charged R1000 less per household and the Department of Energy confirmed that the company’s charges were benchmarked. National Treasury approved the company’s charge of R16 000 per household.

“The SIU’s conduct regarding Operation Mabone represents a systematic abuse of investigative powers that threatens the foundational principles of constitutional democracy,” Mphaphuli said in his papers.

“From its unlawful initiation to its ongoing media campaign, the investigation demonstrates a pattern of institutional overreach, procedural violations and deliberate undermining of judicial authority.”

Mphaphuli surmises that Mohlala was deflecting attention from his own wrongdoing when he and former mayor, Chorries Phokane, engaged the SIU to investigate him and his company for having done nothing wrong as 15 902 households had been electrified from December 2015 to March 2017.

Mohlala pleaded guilty on November 6, 2024 in the Pretoria Commercial Crimes Court to violating the Municipal Finance Management Act. He was handed a five-year suspended sentence, conditional on paying R100 000 to the VBS curator.

The SIU instituted  the civil claim following Mohlala’s request. The real scandal was, however, brewing right under the SIU’s investigators noses. The SIU's investigation began in April 2017, midway through the period when Mohlala was channelling millions to VBS.

SIU spokesperson, Kaizer Kganyago, has taken a stance not to comment on the matter while it is still in court.

Mphaphuli has cited 21 respondents that include President Cyril Ramaphosa, Parliament, SIU head, Advocate Jan Mothibi and the SIU spokesperson, Kaizer Kganyago – for their various roles in the matter.

The Concourt application also challenges the SIU for investigating the company using a proclamation that did not include it, but was directed at the municipality’s officials.

It also questions the SIU for having not indicated which officials colluded with Mphaphuli to overcharge the municipality as he could not have overcharged the municipality alone and paid himself from the council’s bank account. The Municipal Finance Management Act stipulates that officials be held accountable for unauthorised, irregular, fruitless or wasteful expenditure.

The SIU has also not applied for a preservation order against Mphaphuli in the eight years he has been in limbo – awaiting the trial of the R76 million lawsuit to begin.

This means Mphaphuli was given room to hide his assets, which would render the SIU’s victory, if it happens, pyrrhic and a waste of resources because the lost money would not be recoverable.

Mphaphuli said that the preservation order would have been a demonstration of SIU’s prima facie evidence against him instead of running a media campaign.

The application goes as far as questioning the Memorandum of Understanding parliament has with the SIU. Mphaphuli claims that its existence blurs parliament’s oversight role over the SIU.