Explosive report follows embattled Newcastle municipality’s alleged mismanagement

After six months of intense investigating, Newcastle Advertiser has published a series of articles detailing the rot that has set in at the Newcastle Municipality.

Sources that informed Newcastle Advertiser’s six-page report included a forensic investigation report originating from the KZN Treasury Department’s Internal Audit Unit, and findings from a 2014 department of co-operative governance and traditional affairs (Cogta) investigation. These source documents were leaked anonymously to the Caxton Local Media (NKZN) Investigative Team.

The reports had not yet been tabled in local town council meetings. This means the media could not merely reproduce its content online. Instead, key allegations were extracted and comments were obtained from those implicated.

Forensic investigators allege that the rot started in former mayor Afzul Rehman’s time, when Kebone Masange was municipal manager.

The mayor of a municipality is tasked with providing political guidance over the policy, budget and financial affairs of a municipality. The municipal manager, on the other hand, is the driving force behind a municipality’s administration and has to integrate all the components (such as finance, corporate services, infrastructure services and economic development) thereof into strategic and operational plans.

ALSO READ: Newcastle mayor appears in court twice in one day

Part 1 and 2: Will anyone face criminal charges?

The Newcastle Advertiser Investigative Team had extensive interviews with many municipal sources, many of whom wish to remain anonymous for their own safety. Allegations made by these sources mirrored those made in the leaked documents.

Certain councillors denied the existence of these documents, while others admitted hearing of it but claimed to have never actually seen it. Many ANC members appeared to be intentionally suppressing the documents, presumably fearing the damaging impact it could have on the ruling party, should the contents become public knowledge.

Normally, reports such as these are tabled during municipal council meetings where it may be openly discussed. This act is called “tabling documents before council” and renders it publicly available, enabling the media to report on it.

The Newcastle Advertiser tried to determine why the reports were not tabled.

The report had been forwarded by the Internal Audit Committee of the report to recently suspended municipal manager Errol Mswane in July last year.

Former mayor Makhosini Nkosi, who resigned at the beginning of this year and relocated to Durban to resume his law career, confirmed that Mswane informed him of the report, intending for it to be tabled before the Executive Committee (Exco) and then the full council, so that action could be taken. Nkosi stated that it was the intention to have it tabled in late January or early February.

This never happened. Nkosi explained that, as he was getting ready to leave and the municipal manager had been suspended, he brought the report to the attention of the Regional Executive Committee (REC) of the ANC’s current mayor, Dr Ntuthuko Mahlaba, the REC chairperson.

“I have no reason to hide this report. After I left, I was surprised that, until now, nobody has ever asked me about the forensic report, not even the opposition parties,” Nkosi said.

ANC sources alleged that Mahlaba and the REC chose to keep the report secret because it implicated ANC members in connection with fraud and corruption. When confronted with this allegation, Dr Mahlaba denied being in possession of the report.

Other repeated attempts to meet with Dr Mahlaba to discuss the details of the report have been unsuccessful.

Despite Treasury’s forensic investigators strongly recommending that criminal action be taken against the politicians, officials, and business people implicated, to date no formal action has been taken.

Part 3: Allegations against former mayor Afzul Rehman

Section 36 is used to condone the acquisition of goods and services when an urgent situation makes it implausible to wait for the time it would take to follow the normal tender process.

In reaction to the Section 36 allegation, he said: “You do realise I was not the accounting officer, right?”

Cogta’s investigation further exposes how Afzul allegedly abused his position of authority by funnelling municipal money into a company, Phonestatic. This entity belonged to his sister-in-law and was managed by his brother.

A private investigator appointed by AfriForum had allegedly unearthed damning evidence against Afzul, which had been forwarded to the Hawks’ Commercial Crime Unit in Pietermaritzburg, which conducted further investigations. A docket has since been sent to the director of public prosecution, who will decide whether criminal charges are to follow or not. Afzul responded to this by saying that neither Afriforum nor the Hawks had ever approached him for a statement.

Afzul stated in response to the allegation that it was nothing more than hearsay. He demanded proof and stated: “I will NEVER respond to accusations and allegations.” He also accused the Newcastle Advertiser’s source of having a grudge against him or too much time on their hands.

“I had run the municipality to the best of my ability. Of course I made mistakes along the way, but in general, people received good services and infrastructure was built. Now the town says I stole all the money, that is why they are in financial problems. Yet if you look around, you can see exactly where the money was spent.

“How many other mayors can point and say this bridge or this building is where we spent it (the money) … With all the mayors passing through my office no one has uncovered a shred of evidence against me.

“The axes and knives are with the regime now, they have to find a scapegoat for the mess they are in and I am an easy target. But the fact is everyone thinks I am corrupt and have made a decision in their minds yet can’t seem to find how!!!! It’s simple… I never stole a cent from this municipality and God is my witness.”

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