Minister of justice Michael Masutha. Picture: NTSWE MOKOENA
Minister of justice Michael Masutha. Picture: NTSWE MOKOENA

Justice minister Michael Masutha on Wednesday shifted the blame to the Special Investigating Unit (SIU) for his department’s failure to cut ties with the corruption-accused facilities management firm, Bosasa.

Earlier this week, Masutha announced that his department had issued Bosasa, now trading as African Global Operations, with a 30-day notice that it will end its contracts for catering at prisons. The company had notified the department of its intention to apply for voluntary liquidation following the closing of its bank accounts by FNB and Absa banks.

The two banks cited reputational risk as their reason for cutting ties with the embattled firm after it was implicated in corrupt activities at the ongoing state capture inquiry.

The department has eight contracts with Bosasa with multiple extensions amounting to R7.1bn. It includes contracts on nutrition, access control systems, staffing, installing of perimeter fencing and installation of televisions.

Briefing MPs on the Bosasa contracts, Masutha suggested the department would have cut ties with the company much earlier had the SIU provided a more detailed and thorough report following its probe into operations at the firm.

In 2006, the president issued a proclamation to probe allegations of corrupt activities in the awarding of contracts to Bosasa, namely for nutritional services, access control, fencing and televisions, said Masutha.

 Following the probe, the SIU drafted a report in 2009 on alleged tender rigging involving Bosasa and senior correctional services officials, including the then national commissioner Linda Mti and CFO Patrick Gillingham.

But that report, which recommended the criminal prosecution of Mti, Gillingham and Bosasa officials — including Angelo Agrizzi — was not acted on for nearly a decade.

Masutha said the report did not make it explicit on what grounds Bosasa should have been blacklisted, and it did not clearly state whether or not the department had suffered financial losses by contracting Bosasa. This, he said, would have ensured that the department was able to claim the losses from Bosasa.

“With hindsight the SIU might see that there was a gap in their recommendations. Without seeking to exonerate the department, the SIU report could have been more helpful," said Masutha.

Various MPs raised issue with Masutha’s views saying the department had known for a long time about Bosasa’s dodgy dealing but only chose to act now after the company was forced into liquidation.

In his damning testimony at the state capture inquiry in January, Agrizzi detailed how Bosasa, paid out millions of rand in bribes every month in order to secure tenders at state institutions.

He also implicated the ANC, stating that about R1.8m was paid to the party for its election campaign in the North West five years ago. Agrizzi said about 80 people were on Bosasa’s list of people it  paid bribes to monthly.

During Wednesday’s portfolio committee meeting, Masutha also revealed that he had met Bosasa boss Gavin Watson during an ANC rally in 2016 in Port Elizabeth.

He said there had been a shortage of accommodation, and one of his aides organised a place which he later found out belonged to Watson. Masutha said when he eventually met Watson, the Bosasa boss wanted to discuss contract extensions. However, Masutha told him he did not handle procurement and that he should write  to the department. The minister said he later realised why the house was offered and he decided to declare the meeting with Watson to parliament’s ethics committee.  

phakathib@businesslive.co.za