The Pretoria High Court on January 30 dismissed an application by South African kwaito musician and producer Arthur Mafokate to have his property released from a preservation order.
On December 21, 2022, the Asset Forfeiture Unit (AFU) of the National Prosecuting Authority (NPA) obtained an order to preserve Property 85 Carslwald Road, Midrand belonging to the sole member of 999 Music, Mafokate.
According to Gauteng NPA Regional Spokesperson, Lumka Mahanjana, this followed investigations conducted by the Special Investigating Unit (SIU) into the National Lotteries Commission (NLC) which revealed that the South African Arts and Development Organisation (SAADA) was granted R9.3m to assist unemployed youth in the poor and rural areas of the country, to impact skills in music, business video, film production dance and the overall business of radio.
“Instead, SAADA only used R1.8m of those funds on the project and used the remaining funds of R7.5m to purchase a guesthouse known as La Villa Rosa in Midrand,” said Mahanjana.
In court, Mafokate argued that he was entitled to the R7.5m as his businesses delivered the services as required by the NLC and that he had committed no offences.
However, the NPA argued that although some kind of services were rendered, it was at most R1.8m. The remainder of the funds was used to purchase the guest house, which was not the purpose of the grant allocation.
“The funds used to purchase the guest house were thus stolen from the NLC as it was not used for the allocated project.”
The court agreed with the NPA that it was against the terms and conditions of the grant for SAADA to carry over its obligations to any other organisation and that SAADA should have also returned any unused funds to the NLC.
The court also found that Mafokate could give no reasonable explanation on how he could afford to purchase the guest house if it was not for NLC funds, particularly as his business accounts contained negligible balances when the grant was received from the NLC.
Therefore, the court dismissed, with costs, the application of Mafokate to have the guest house released from the preservation order.
The Director of Public Prosecutions, Advocate Sibongile Mzinyathi, is grateful for the investigation conducted by the SIU on this matter, which illustrates the effectiveness of law enforcement agencies working together to eradicate corruption.
He also welcomes the judgment as it demonstrates the NPA’s continuous fight against corruption at the highest level. This judgment paves the way for the AFU to enrol the matter for the final forfeiture of the guest house and all the other luxury properties worth millions of rand purchased with stolen NLC funds.
Should the forfeiture application be successful, the guest house will be sold at a public auction and the proceeds returned to the NLC.
Lead 2 Online headlines: SIU welcomes court’s dismissal of Mafokate’s attempt to cancel preservation order for NLC-funded property in Midrand
The Special Investigating Unit (SIU) welcomes a judgment from the High Court of South Africa, Gauteng Division, Pretoria, to dismiss with costs an application brought by 999 Music and its founder Arthur Mafokate to reconsider a preservation order of a luxury property in Midrand.
Mafokate is the sole director of the South African Art and Development Association (SAADA), Roadshow Marketing and 999 Music.
The SAADA received a grant funding of R 9.3m from the NLC to assist unemployed youth in poor and rural areas to gain skills in music, film, radio, and media production.
The grant was paid in two instalments. The first half of the grant amounting to R4 650 000 was made on October 28, 2014, and the second half on November 14, 2015.
An SIU investigation revealed that money from the SAADA account was transferred to Roadshow, after that it was transferred into a home loan bank account, which was used to purchase the property in Midrand for R7.5m.
In his submission, Mafokate stated that the funding was for a talent project launched on March 12, 2015.
He argued that the first payment was used to pay for the required services and that he used his funds from Roadshow Marketing to complete the project. Therefore, he did not see anything wrong in using part of the grant money to buy a lodge.
The High Court found that he was indeed wrong. After examining the final project report Mafokate submitted to the NLC, Judge Mandlenkosi Percival Motha states that “according to their own calculations, Mr Mafokate could not have spent more than R1.8m for the entire project. Therefore, he was supposed to pay back over R7.1m.”
Furthermore, Judge Motha said Mafokate’s submission to the high court raised more questions than answers and had his fingers in many pies.
“The 999 Music’s version leaves this court with more questions than answers. Indeed, this court is left with reasonable grounds to believe that the property was the proceeds of unlawful activities. It also did not help that counsel submitted that it is 8 years later, and the respondent got together what it could. This court is not persuaded that Mr. Mafokate’s Roadshow Marketing carried the project as alleged,” stated Judge Motha.
The SIU was, in terms of Proclamation R32 of 2020, authorised by President Cyril Ramaphosa to investigate allegations of corruption and maladministration in the affairs of NLC and the conduct of NLC officials and to recover any financial losses suffered by the state.
The SIU collaborated with the NPA to obtain the preservation order as part of the National Anti-Corruption Strategy, which sees law enforcement agencies coming together to eradicate corruption in South Africa.
This judgment paves the way for the forfeiture application to go ahead and possibly recover the money that the NLC lost.
The preservation order of the Midrand property is part of the implementation of SIU’s investigation outcomes and consequence management to recover cash and assets lost by state institutions due to alleged corruption or negligence.
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