Before he was brutally gunned down in Sandton in 2017, businessman Igo Mpambani and his wife, Michelle, reaped the benefits of a contentious R255m asbestos audit project in the Free State. Leaked emails and documents link then Free State Premier and current ANC secretary-general Ace Magashule to some of the proceeds of this dubious deal. Almost two years after Mpambani’s murder, the SARS has set its sights on collecting more than R20m from one of the couple’s companies, after the revenue collector identified huge amounts of undeclared income in its accounts, and the slain tender mogul’s widow is now left to deal with the fallout on her own.

Nothing in the outward appearances of the little-known company, 605 Consulting Solutions, gives away the fact that it raked in more than R120-million in revenues during the past three tax years.

For a start, it doesn’t have a website.

What’s more, the business’s only office — situated on the top floor of a small block in a commercial complex in Sunningdale, Johannesburg — is now deserted. When this reporter visited the premises in September 2018, there was nobody at the reception desk. A lone office worker couldn’t offer much help in the way of locating Michelle Mpambani, the company’s only remaining director after her husband’s murder the year before.

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At the time of Igo Mpambani’s apparent assassination on Sandton’s Bowling Avenue in June 2017, 605 Consulting Solutions was earning a fortune in revenues solely derived from government contracts in the province ANC secretary-general Ace Magashule led at the time.

The bulk of these earnings were directly linked to a controversial R255-million asbestos audit deal Mpambani and Gauteng-based businessman Edwin Sodi had clinched in 2014. Sodi’s company, Blackhead Consulting, and Diamond Hill Trading 71, one of Igo Mpambani’s other companies, had formed a joint venture after they bagged the asbestos contract from the Free State’s Department of Human Settlements (FSHS).

Leaked emails, banking records and other documents, referred to as the IgoFiles in the book Gangster State, revealed that Magashule apparently had a direct financial interest in the huge contract. A “cost of business” spreadsheet that had been passed around between Mpambani and Sodi indicated that a certain “AM” was due to receive R10-million from the asbestos deal. Later, when the money from the FSHS started to flow into the Blackhead-Diamond Hill joint venture’s (JV) account, Magashule’s closest staffers came knocking on Mpambani’s door asking for money.

“Following the discussion with Ipeleng Morake, Premier requested that you pay full amount of R470,000 and the remaining amount of R30,000 to one of the SRC President in Cuba [sic],” Moroadi Cholota, Magashule’s then PA, wrote to Mpambani in May 2015, after the FSHS had paid the JV a tranche of R25-million for the asbestos audit. Morake also worked in Magashule’s office. Gangster State unpacks several other instances where Magashule’s staffers requested cash from Mpambani shortly after the FSHS had made payments for the asbestos deal.

After they had paid off the likes of “AM” and other individuals and entities listed in the spreadsheet, Mpambani’s Diamond Hill and Sodi’s Blackhead Consulting were to split the remaining asbestos audit revenues, according to a signed contract in the IgoFiles.

The leaked bank records reveal that Mpambani flushed much of his asbestos audit bounty into the account of 605 Consulting Solutions. It was also from 605 Consulting Solutions’ account that Mpambani made some of the most dubious payments that bear Magashule’s fingerprints.

In January 2016, for instance, Cholota (Magashule’s PA) sent Mpambani the banking details of a travel agency in Bloemfontein. Only 40 minutes later, the FSHS transferred R10-million into the Blackhead Consulting-Diamond Hill JV account. A few days later, after he had transferred some of the proceeds of the latest asbestos audit payment from the Diamond Hill account to that of 605 Consulting Solutions, Mpambani paid R250,000 from the latter account to the travel agency Magashule’s PA had mentioned in her email. The invoice from the travel agency referred to a “Cuba delegation”.

Tiisetso Makhele, Magashule’s spokesperson, later unwittingly revealed crucial information regarding the “Cuba delegation”. In an open letter to The Weekly newspaper published in June 2016, Makhele wrote that the Free State Provincial Executive Committee (PEC), “under the visionary leadership of Comrade Ace Magashule”, had sent him and 18 other ANC members to Cuba for a “political course”. Thanks to the IgoFiles, we now know that this party-political project, ostensibly planned by Magashule, had been bankrolled with taxpayers’ money that was siphoned off from the FSHS’s coffers and channelled through Mpambani’s companies, namely Diamond Hill Trading and 605 Consulting Solutions.

After the Blackhead Consulting-Diamond Hill JV received a final payment of R77.5-million from the FSHS in August 2016, Mpambani channelled almost R75-million into 605 Consulting’s account.

His death in June 2017 by no means signalled the end of 605 Consulting’s activities. In fact, the violent murder seemingly had no effect on the company’s dealings in the Free State, including those that seemingly linked it to Magashule.

New “engineering” contracts from the FSHS ensured that the company would directly earn further revenues from the Free State’s provincial coffers of almost R40-million. Igo Mpambani’s widow, Michelle, remained on as 605 Consulting’s sole director and apparently took over the company’s day-to-day management.

After a smaller payment of R2-million from the department in September 2017, 605 Consulting paid R500,000 to a company named Ramtsilo Trading. Its directors are two sisters from Sasolburg who happen to be co-directors with Magashule’s son, Thato, in another entity.

Scorpio has now reliably learned that 605 Consulting had failed to declare much of these revenues to SARS.

It is understood that a SARS audit on the company’s financial affairs, instituted some time in 2018, identified huge amounts in undeclared income and that the tax collector now wants the company to cough up more than R20-million.

The audit showed that 605 Consulting raked in more than R120-million in revenues in the past three tax periods, according to Scorpio’s sources. This would account for the huge sums of cash that Mpambani had channelled into the company’s account after the FSHS paid the Blackhead Consulting-Diamond Hill JV for the asbestos audit, as well as the cash 605 Consulting earned directly from the FSHS for “engineering services”.

Attempts to reach Michelle Mpambani on her cellphone were unsuccessful. Messaging platform WhatsApp’s blue-tick system suggests she had read queries sent to her phone, but she did not reply.

SARS said it could not comment on the specifics of the case.

“As you are aware, SARS is not in a position to divulge specific information and details on the affairs of taxpayers. This includes investigations into taxpayers and traders,” said the revenue collector.

Prior to the publication of Gangster State, Magashule was given an opportunity to respond to questions relating to his ties to Mpambani, his alleged involvement in the R255-million asbestos audit and 605 Consulting’s other contracts and financial dealings. He has to date failed to respond.

Sodi, who was contacted before the book was published, has strongly denied any impropriety in the awarding and execution of the asbestos audit project.

Cholota did not respond to queries.

In an open letter penned in response to some of the issues raised in Gangster State, Makhele underpinned the importance of the “political education trip” he and his fellow ANC members embarked on.

He said the trip by no means constituted a “jaunt or holiday” and was instead “an intensive political education course”.

However, Makhele did not comment on the fact that the trip was sponsored with the proceeds of a dubious government contract. DM

Myburgh is the author of “Gangster State — Unravelling Ace Magashule’s Web of Capture”.