ATC231002: Report of the Joint Committee on Ethics and Members’ Interests on the Complaints against: Honourable Nyiko Floyd Shivambu, MP
Ethics and Members' Interest
Report of the Joint Committee on Ethics and Members’ Interests on the Complaints against: Honourable Nyiko Floyd Shivambu, MP
The Joint Committee on Ethics and Members’ Interests (“the Committee”) having considered the complaints against Hon. NF Shivambu, reports its findings and its recommendation on penalty, in terms of item 10.7.8.1 of the Code of Ethical Conduct and Disclosure of Members’ Interests, as follows.
INTRODUCTION
On 16 October 2018, during the term of the 5th Parliament, Mrs Karlsen, who then was a Member of Parliament and a member of the Democratic Alliance (“the Complainant”) referred a complaint to the Committee. The complaint was directed against Honourable NF Shivambu, MP (“the Member”) of the Economic Freedom Fighters (EFF). The Complaint focussed on matters that were related to what is commonly referred to as the Venda Mutual Bank “VBS”) scandal. The Committee that is constituted under the 6th Parliament resolved during November 2019, to continue with he complaint.
On 18 October 2019 Honourable Steenhuisen, MP (“the Complainant”) of the Democratic Alliance (DA) also referred a complaint to the Committee. His complaint focussed on the same issue. The Committee processed these two complaints together.
SUMMARY OF THE COMPLAINT
The Complainants referred to media reports in the Daily Maverick which alleged that- The EFF and its Deputy President Floyd Shivambu have benefited financially from the VBS scandal.
The articles alleged further that-
- the Member received about R10 million through his younger brother Brian Shivambu and that the EFF allegedly received R1.3 million through VBS Bank;
- money was funnelled through a company called Sgameka Projects (legally owned by Mr Shivambu’s brother Brian Shivambu) into the Member’s bank account;
- payments were made by Lawrence Mulaudzi, into the account of a company called Grand Azania (Pty) Ltd (legally owned by Mr. Shivambu’s brother Brian Shivambu) (“Grand Azania”), which funds were then utilised to pay expenses related to the Member’s wedding;
- the Member benefitted from payments made by the company Sgamaka Projects (Pty) Ltd into the bank account of Grand Azania;
- the Member failed to disclose Sgameka, Grand Azania, Brian Shivambu or Lawrence Mulaudzi in his 2017 and 2018 disclosure of member’s interests;s
- the Member utilised the savings of vulnerable VBS- depositors and municipalities funnelled through Sgameka Projects and Grand Azania to fund his extravagant lifestyle and political aspirations.
THE RESPONSE BY THE MEMBER
The Acting Registrar of the Members’ Interests (“the Acting Registrar) wrote to the Member requesting a reply. On 21 November 2018 the Member addressed an e-mail to the Acting Registrar. The e-mail reflects the following:
“Greetings
I have consulted with my legal representatives and also with the leadership of the EFF about the complaint I am supposed to respond to.
I am 100% sure that the case you are asking me to respond to is sub judice, meaning that there is a legal challenge the (sic) VBS report aspect that relate to my younger brother, which is is (sic) in turn the basis of the complaint.
I therefore believe that there is no definitive basis to respond to allegations that are subject to judicial review.
I however wish to state categorically that I have had no conflict of interest on any matter that related to VBS as alleged and have not received any payments from VBS.
I have recently finalized my tax returns and SARS is satisfied with all the submissions on all the issues that relate to revenue collection.
I therefore write to request that the Ethics Committee wait for the outcome of the judicial review and then restart the whole process of investigations if the committee will still believe that there are issues that still need to be clarified after the judicial review.
If the committee decides to proceed on a matter that is under judicial review, please let me know so that I consult (sic) with the legal representatives to determine the next action.”
PROCESS
The matter of the allegation of the judicial review was followed up with the South African Reserve Bank (SARB) who confirmed that according to their record only Mr Msiza had applied for judicial review. On the basis of this information, the Committee decided to proceed with the complaint.
The Committee resolved to summon the Liquidator in the VBS matter. The Liquidator provided an affidavit in the form of a report (“the Report”) to the Committee. The Report highlighted that the following money was transferred from Sgameka Projects (a company owned by Mr. Brian Shivambu, the Member’s brother) to the Member as follows:
1 18 August 2017: R100 000
2 24 August 2017: R 30 000
3 26 August 2017: R 50 000
The Liquidator identified that money was moved from Sgameka Projects to other bank accounts held at other retail banks. The Liquidator did not have jurisdiction to obtain information in respect of bank accounts that were not held with the VBS and therefore could not furnish the Committee with additional information.
The Committee resolved to summon the Financial Intelligence Centre (FIC) to obtain information relating to the transfer of money from Sgameka Projects to bank accounts not held at VBS in order for it to obtain intelligence on the movement of money. The FIC held the view that in terms of section 40 the Financial Intelligence Centre Act, No. 38 of 2001 it would be unlawful for it to provide the Committee with financial intelligence. The Committee was in the process of invoking section 14 of the Powers, Privileges and Immunities of Parliament and Provincial Legislatures Act, 4 of 2004 against the FIC, but after receiving legal advice, did not proceed with the issuing of the summons.
All other investigative avenues by the Committee to try and trace whether more money was paid to the Member via bank accounts to which the Liquidator did not have access, were unsuccessful. This part of the investigation is therefore inconclusive. The Committee decided to finalise the complaint on the evidence that it had before it.
FINDING
The Committee found that the Member breached item 10.1.1.1 of the Code for failing to comply with the requirements of the provisions for disclosing financial interest in respect of the R180 000 (one hundred and eighty thousand rand) that was paid to him in 2017 by Sgameka Pty Ltd as follows:
16.1 18 August 2017: R100 000
16.2 24 August 2017: R 30 000
16.3 26 August 2017: R 50 000
SANCTION
The Member was afforded an opportunity to provide written representations on the penalty/ sanction, to be imposed. The Member did not provide any written representations.
COMMITTEE RECOMMENDATION ON PENALTY / SANCTION
The Code determines that when a member breaches item 10.1.1.1 of the Code, a penalty listed in item 10.7.7.1 of the Code must be imposed.
Item 10.7.7.7.1 (iii) provides for a reduction in salary or allowances for a period not exceeding 30 days.
The Committee recommends to the House to impose a penalty of a reduction of 9 (nine) days salary against the Member.
REPORT TO BE CONSIDERED
BEKIZWE SIMON NKOSI MOJI LYDIA MOSHODI
CO-CHAIRPERSONS OF THE JOINT COMMITTEE ON ETHICS AND MEMBERS’ INTEREST