How NYDA boss signed R22m contract for a relative
National Youth Development Agency (NYDA) boss Steven Ngubeni signed a R22m catering contract for a relative as part of the more than R100m in taxpayers and Lotto money the agency spent on the controversial World Festival of Students and Youth.
The multi-million rand deal was given to Ntombezintsha Trading from Springs, a company whose three owners include Musi Zondo, a police officer and the uncle of Ngubeni’s wife, Sarah Kubheka. Proper tender procedures were not followed.
The company got R6,5m upfront – but was fired only days into the festival when catering arrangements descended into chaos.
On Friday the organisation said if the company included a relative of Ngubeni it was because he did not know about the business interest.
Media24 Investigations first revealed the contract at the end of last year but we did not know that the company was linked to Ngubeni until a reader tipped us off.
It took months to establish the links but this week we confirmed the relationship between Ngubeni and Zondo.
Confronted this week, Ngubeni – a former ANCYL deputy secretary general – refused to comment but Collins Chabane, the Minister in the Presidency, under which the NYDA falls, has demanded an explanation from the agency board.
We also have proof of Ngubeni’s intimate involvement in the transaction with Ntombezintsha – including his signature on a contract and authorisation of millions of rands of advance payments to the company. We obtained these documents and hundreds of others through an access to information application earlier.
We also have a letter issued in Ngubeni’s name (although signed on his behalf) for Ntombezintsha confirming it had won the deal. The letter also shows that R6.5m was paid as an advance on it winning the contract.
The documents also clearly bear Zondo’s name, address and contact details and show Ngubeni approving a multi-millon rand advance payment.
The contract which bears Ngubeni’s signature includes another signature which appears to be the intials “M.Z”
Ntombezintsha was supposed to assist provide tens of thouands of meals over the 11 day festival.
He said the agency had had no choice but to ignore normal tender requirements after a management company originally hired to organise the festival walked away at the last minute.
Earlier this year Media24 Investigations confronted Ngubeni and Zondo about their relationship, although at the time it wasn’t clear exactly how they were connected.
Zondo dodged the questions and Ngubeni simply ignored them.
Ngubeni and Zondo claimed that the R6.5m was ultimately paid out to a group of about 20 small, local, youth-run catering operations.
However the contract shows that it was entered into with Ntombezintsha alone, while an invoice from Ntombezintsha shows only two companies and “youth groups” listed as payees.
Ngubeni has claimed he did not know who owned the “youth-run” caterers. [Listen to an audio clip of an earlier interview]
Ngubeni declined to answer any of the questions that were sent to him this week.
“I reserve the right to respond to your questions at an appropriate time and forum, if needs be,” said Ngubeni.
Zondo refused to say anything about either the tender or his relationship with Ngubeni’s wife and instead threatened to turn to his lawyers.
A police spokesman said they could find no record of Zondo declaring an outside business interest and that they were investigating further.
The NYDA said Ngubeni had not been in a position to know if a relative had been involved in one of the company’s awarded a tender.
It said in a statement that the “magnitude of the crisis” caused by the withdrawal of the company it had contracted to organise the festival had meant it had to deviate from normal tender processes and that this was allowed in law. It had had to scramble to hire company at a time when many were closed for business in December.
Further, Ngubeni had to relocate to Pretoria in the run-up to the festival where he dealt with paperwork relating to the contracts.
“All documentation including that of Ntombezitsha Trading CC-led consortium that the CEO signed from his temporary base in Pretoria, purely referred to company names and not to the listings of directors’ names and as such the CEO could not have been in a position of knowing who the directors are/were on signing of all the contracts related to the Youth Festival. Given that the owner of the company is a distant relevant of the CEO’s wife as you allege, there can be no reasonable expectation that he would know his business activities,” it said.
It said some of the documents had been signed by the Acting Chief Financial Officer as the organisation’s policies allowed.
But late yesterday, NYDA board chairperson Andile Lungisa suddenly called to say that Ngubeni had noticed a potential conflict of interest days before the contract was awarded to Ntombezintsha and had alerted him to it.
Lungisa claimed a note had been made of this. Neither Ngubeni nor the board provided a copy of his alleged declaration as requested earlier in the week.
David Lewis, executive director, of Corruption Watch said that “even the appearance of an interest conflict in awarding a government contract should not be countenanced, particularly in an environment in which actual conflicts have become so common-place and where there is, as a result, so little trust of government’s procurement procedures.”