Press statement: SEFA corruption stifles small business and job creation

Democratic Alliance press statement by
Toby Chance MP
DA Shadow Minister of Small Business Development 

08 June 2016
Release: Immediate

The DA calls for the Small Enterprise Finance Agency (SEFA) to bring to a speedy conclusion the disciplinary inquiry initiated against officials suspected of being involved in collusion and bribery in the issuing of loans.

Since November 2015 the DA has been in correspondence with small businesses owners in Tshwane who raised concerns about alleged fraud at SEFA. Six months later the matter is yet to be resolved.

The whistle-blower claims SEFA employees are receiving kickbacks in return for issuing loans to dodgy businesses who have not followed the correct procedures and are ineligible to receive this assistance while other businesses are precluded from this government assistance. Some of the allegations against these businesses implicate even departmental officials who have allegedly accepted bribes to write off loans, putting further strain on SEFA’s already poor record of loan recovery to help so many other small businesses and creating jobs.

SEFA's Pretoria office, in particular, is under the spotlight. A businesswoman has been accused of receiving large loans under the false and fraudulent pretence of providing bogus customer orders. However due to the fact that she is well connected with officials, she is not paying back the loans. Further accusations are that the disbursements from SEFA were going into personal accounts of friends and relatives and SEFA has failed to do any due diligence investigations. 

Some officials are accused of being bribed R50,000 per month from state-owned entities as they were 'awarded' a non-existent tender used to secure a loan of several million rands. 

The whistler-blower has since accused SEFA of trying to sweep things under the carpet, due to political connections of the accused.

I have been in communication with SEFA’s CEO, Mr Thakhani Makhuvha, since December to get to the bottom of the matter. On 3rd December 2015 I wrote to him and he confirmed that SEFA would commission a forensic audit. 

On the 29th  February 2016 Mr Makhuvha wrote to me stating that SEFA had suspended the employees implicated in the alleged fraud and had laid  criminal charges with the Commercial Crime Unit of SAPS  for investigation and prosecution of the suspects. 

He went on to say that SEFA has distanced itself from allegations of  a "cover-up", and that the conclusion of these matters would refute the allegations and support the integrity of the Agency. 

In his most recent response to my email of 21^st April, received earlier this week, he declined my request for the police case number, citing “the sensitivity of the matter” which will “compromise the police investigations.” 

In the interests of transparency and clean governance SEFA must make a public statement as soon as possible explaining in detail the outcome of the forensic audit and the disciplinary enquiry, and what steps it is taking to ensure fraud and corruption are eliminated from the Agency so it can get back to its work in helping small business owners make a living and create jobs for the 8.9 million without this employment. 

The DA will continue to fight for freedom, fairness and opportunity for all. Taxpayers' money can never be wasted in enriching a few whilst 8.9 million people languish without a job. 

Media enquiries:  

Toby Chance MP
DA Shadow Minister of Small Business Development
083 251 5613 

Luvuyo Ndlangisa
Press Officer
061 738 0812