Kodwa admits he owes businessman R1-million

Deputy state security minister Zizi Kodwa on Monday, under questioning at the Zondo commission, resisted the idea that he should reconsider his position in government because being beholden to businessman Jehan Mackay for R1-million did not inspire public trust.

Kodwa told the commission he was not in a position to repay the debt, because being a deputy minister was, by nature, not secure employment. But he did not foresee a crisis, because he did not believe MacKay, a former executive at EOH, would call in the debt. 

Nor did he think there was a conflict of interest, because he never sought to influence state tenders in favour of JSE-listed technology company EOH.

Evidence leader Matthew Chaskalson put it to Kodwa that the unpaid debt owed to a businessman who risked corruption charges, put him in an untenable position as deputy minister.

“If we are talking at the level of perceptions, there is a very real risk that Mr Mackay may threaten to do that which you don’t think he will do and, because he holds power over you to that extent, the public can never be comfortable,” he said.

Kodwa acknowledged that there may be a perception problem, and said: “That is a burden upon me that I have to manage.”

But became visibly upset when Chaskalson asked how he planned to manage it, short of resigning.

“He has now power over me and I have no power over him; we are just friends and you were just expressing your opinion,” he said, and objected to Deputy Chief Justice Raymond Zondo that he did not consider the question fair because it was not based on fact.

But Zondo replied by pointing out that if MacKay called in the debt, and Kodwa could not pay it, he could ask the high court to sequester him. He went on to remind him that sequestrated persons could not serve as members of parliament or the executive, and said matters were made more complex still by the fact that MacKay kept emailing Kodwa with regards to tenders.

“On the face of it, this person does have expectations for you to do certain things on behalf of him … What if he got into a fix and said: ‘This is what I know demand?’” Zondo posited.  

The commission heard evidence last month, based on Kodwa’s bank statements, that from March 2015 to February 2016 he received payments and luxury accommodation totalling nearly R2-million.

Kodwa was ANC spokesperson at the time. 

Steven Powell from ENSafrica Forensics told the commission that MacKay paid R650 000 for Kodwa to stay in posh locations, including a festive-season stay on Cape Town’s Nettleton Drive at a cost of R50 000 a night, which came to R650 000. 

On Monday, Kodwa denied this, saying that Mackay was his friend, who allowed the deputy minister to sleep at his properties whenever Kodwa was in Cape Town. But he confessed that MacKay lent him R1-million and he spent most of it on a Jeep.

“I do confirm that I obtained a loan of [the] sum of R1-million from Mr Mackay, R890 000 of which went to the purchase of a Jeep vehicle … during June 2015. I confirm that this was a loan from my friend and no strings attached. I obtained it at a time of financial difficulty and I would not have been able to secure a bank loan,” Kodwa told the commission. 

According to Powell, the invoices were sent to Philip Arnold at Clipper Financial Services, which had a working relationship with EOH.

The tech company secured tenders with the department of home affairs and the Eastern Cape provincial education department, and a third tender worth R90-million with the South African Social Security Agency. 

In another of the company’s procurement contracts, in April the Special Investigating Unit (SIU) found that a R250-million software-procurement deal awarded to EOH was irregular. It said the contracts for Microsoft software licences acquired by the department of defence in 2016 and 2017 were inflated by more than R40-million.

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