Letter to the DG Public Service Commission re Dr Mazwai conflict of interest

29th November 2016 

Public Service Commission

Director-General:

Dr Dovhani Mamphiswana

RE: Request to investigate conflict of interest

Dear Dr Mamphiswana

In replies to our DA Parliamentary Questions, the Minister of Small Business, Lindiwe Zulu, revealed that she allowed her department to pay R22 million to Mtiya Dynamics, a company in which her department advisor, Dr Thami Mazwai, owns 40% of the shares.

Oral question in the House to Minister Zulu - what will you do about Dr Mazwai's conflict of interest?

Yesterday I asked a question in the House during the Oral Questions session for Economics Cluster 5 which includes the Minister of Small Business Development, Lindiwe Zulu.

"Minister, a number of companies your department supported in the Eastern Cape are beneficiaries under the National Gazelles Programme.

The programme is managed by a private company, Mtiya Dynamics, to which your department paid R22 million rand in the current financial year.

I now discover that your special advisor, Dr Thami Mazwai, who devised the Gazelles Programme, owns 40% of the shares in Mtiya Dynamics.

Media statement: Minister Zulu’s advisor receives over R22 million in contracts

Minister Zulu’s advisor receives over R22 million in contracts

by Toby Chance - DA Shadow Minister of Small Business Development

Date: 08 November 2016

Release: Immediate

Type: Press Statement

Successive replies to DA Parliamentary Questions have revealed that Minister of Small Business Development, Lindiwe Zulu, allowed her department to pay R22 million to Mtiya Dynamics, a company in which her advisor, Dr Thami Mazwai, owns 40% of the shares. I will write to Minister Zulu to request that she either terminate Dr Mazwai's contract with immediate effect or instruct Dr Mazwai to dispose of his shares immediately. Failing this immediate action, the DA will write to the Auditor General, Kimi Makwetu, to request that he investigate these activities. Furthermore, I will submit parliamentary questions on whether or not Dr Mazwai has received any material benefit from fees or dividends paid by Mtiya Dynamics. The reply lists the following amounts totalling R22,085,000 that was paid to Mtiya Dynamics: • R2,910,150 on programme set up costs • R2,355,738 on call for applications & adjudications • R683, 234 on promotion, marketing and branding • R2,848,965 as a management fee • R1,723,573 on inductions, capacitation and business report • R948,302 on research and development • R1,629,350 on project admin costs • R1,930,000 Third trance expenses • R3,500,000 for capacitation costs • R463,785 project costs • R3,091,900 VAT Mtiya Dynamics, under Dr Mazwai's direction, developed what is now called the National Gazelles Programme and sold it to the DTI. After the formation of the Department of Small Business Development in 2014, the programme was transferred to it from the DTI. Last year Dr Mazwai joined the Department of Small Business Development on what is no doubt a lucrative contract, shortly after his company Mtiya Dynamics was given the contract to manage the National Gazelles Programme. Government employees in DA-controlled departments, metros and municipalities are barred from doing business with the state. Minister Zulu must demonstrate a similar level of probity in the management of her department.

Media Enquiries

Toby Chance DA Shadow Minister of Small Business Development 083 251 5613   Luvuyo Ndlangisa Press Officer 061 738 0812

Declaration in Parliament on the DSBD Budget Review and Recommendation Report (BRRR)

This afternoon I made a two minute declaration in the National Assembly on the Portfolio Committee's BRRR on the Department of Small Business Development. These yearly reports coincide with the Minister of Finance's medium term financial statement delivered towards the end of October.

The BRRR process is an important function of Parliamentary oversight of the Executive. Before writing the reports, each Portfolio Committee receives presentations from the Auditor General on the financial performance of the department it oversees, from the department itself and all the agencies/entities reporting to it. We then deliberate the information received and make observations and recommendations for the department to include in its budgeting and strategic planning for the following financial year, beginning April 1st.

I had to cut out quite a bit of what I wrote to stick to the 2 minute limit. Minister Zulu, who was supposed to be in the House for all the different parties' declarations, arrived late so didn't hear mine. Who knows, perhaps she will read this blog! Below is the unabridged version.

Statement made in the National Assembly, Parliament, on the Small Enterprise Finance Agency

Yesterday I made a statement in the House to follow up my article which appeared in Business Day two weeks ago and posted on this blog, drawing attention to the dreadful state of Sefa's finances.

In response, Minister Lindiwe Zulu stood up and acknowledged the problem, but then went on to excuse the businesses who did not repay the loans by saying they knew nothing about finance and loans and were untrained, and this could not be termed "reckless lending".

Portfolio Committee meeting minutes - I am elected Acting Chair and face immature ANC behaviour

At the first meeting of the Portfolio Committee on Small Business Development after the election, our Committee Chairperson Hon Ruth Bhengu was off sick so the committee had to elect an acting chair. There were two nominees - me, and Hon Mabasa from the ANC. Due to the poor attendance of ANC MPs I was elected with the ACDP and EFF voting for me and the NFP abstaining.

It is very rare for a non-ANC member to be in the Chair at portfolio committee meetings. Below are the meeting minutes taken by the Parliamentary Monitoring Group staff member who attended the meeting. I'm not sure of his use of the word meme, but the minutes convey the somewhat surreal meeting which ANC members did their best to disrupt.

Sefa forced to review its business model after sustaining heavy losses

The Small Enterprise Finance Agency, Sefa, presented its annual report to Parliament on Wednesday. CEO Thakhani Makhuvha hit the nail on the head when he said “cash is king” in business.

He was referring to his cash-hungry clients, thousands of small and micro businesses for whom a cash injection from Sefa is often the only thing that keeps them going. But he could have been referring to his own organisation, which is bleeding cash at an alarming rate.