Tax boss Tom Moyane’s nephew has scored a debt collection contract from the South African Revenue Service (Sars) that could be worth R220‑million.

Nhlamulo Ndhlela’s company, Lekgotla Outsourcing, is part of Lekgotla Trifecta Collections, a consortium that was awarded a contract to collect R2.2‑billion worth of taxpayers’ debt.

How much Lekgotla Trifecta earns will depend on how much it collects, but an industry expert told the Mail & Guardian in July that its fee could be about 10%, or up to R220‑million.

A subsequent amaBhungane investigation has discovered the family relationship between Sars commissioner Moyane and Ndhlela, and that this was not disclosed to Sars’s bid adjudication committee on the mandatory conflict of interest form.

Businessperson Mabayo “Joe” Ndhlela is Moyane’s brother and Nhlamulo Ndhlela’s father. Joe Ndhlela previously held positions as an executive at Transnet and as the chief executive of the Premier Soccer League. In 2002 he was convicted of fraud relating to his time at Transnet.

At the time, the Sunday Sun reported that Ndhlela was planning to change his surname to Moyane, ostensibly as a result of his decision to assist with the police investigation – but he declined to comment on this.

AmaBhungane also found references suggesting that Tom Moyane has used the surname Ndhlela in the past. Nadja Manghezi’s book The Maputo Connection: ANC life in the World of Frelimo refers to Moyane, who was in exile in Mozambique, as “Tom Moyane”, “Tommy” and “Tom Ndhlela”.

Nhlamulo Ndhlela confirmed through his lawyer that Moyane was his uncle, but refused to comment on any connection to Joe Ndhlela, saying it was irrelevant to the Sars contract. Joe Ndhlela, however, confirmed the connection.

Private debt collectors

Sars’s decision in October last year to hire private debt collection firms was controversial, in part because it involves handing sensitive taxpayer information to private companies.

There have also been questions about why Sars – which already has an internal debt collection unit with access to the most up-to-date consumer databases and the right to recover debts directly from company payrolls – would need to outsource this function.

Lekgotla Trifecta was one of only three companies or consortia selected out of 39 bidders for a slice of the initial R15‑billion debt book that Sars was offering.

All bidders were subject to thorough due diligence scrutiny that, according to Sars, included “checking on previous clients [and] verifying track records” in the debt collection industry.

Sars would not elaborate on what this due diligence process established about the track record of Lekgotla Outsourcing, which teamed up with Trifecta Capital Collections to form Lekgotla Trifecta.

While Trifecta Capital Collections appears to have substantial experience in debt collection, Lekgotla Outsourcing, which was established in 2014 as a joint venture between Ndhlela and Trifecta, appears to have no experience in the field.

When amaBhungane asked Trifecta chief executive Timothy Marshall what debt collection experience Lekgotla brought to the table, he initially said: “The experience is in the Trifecta Capital Collections outfit.”

He later qualified this in a written responses, saying: “Trifecta Capital Collections has more experience in the debt collection business than Lekgotla; however, that does not undermine Lekgotla’s experience in critical components of the programme being project management, outsourcing and ICT [information and communications technology].”

Asked whether Ndhlela’s connection to Moyane was a factor in selecting Lekgotla as a partner, Marshall said that his business partnership with Ndhlela dated back to 2014 when he and Ndhlela agreed to form a joint venture in response to a contract that Ndhlela’s company had been awarded.

“Mr Ndhlela and myself initially met in 2014, where we spoke about creating a joint venture to form an empowerment call centre outsourcing [business process outsourcing] company in response to a contract that Lekgotla was awarded in 2013.

“When the Sars tender was announced in November 2015, the parties agreed to tender together for this opportunity because it fit into the scope of the joint venture.”

Marshall claims he became aware of Ndhlela’s family connection to Moyane only when the consortium was in the process of finalising its bid.

Conflict of interest?

Any company bidding for a contract with Sars must disclose any compromising relationships in a declaration of interest form known as an SBD4.

When amaBhungane approached Sars at the end of August about Ndhlela’s connection to Moyane, Sars spokesperson Sandile Memela confirmed that no such disclosure had been made by Lekgotla Trifecta.

However, when amaBhungane put the same question to Lekgotla Trifecta at the beginning of October, Marshall initially claimed the consortium had played open cards with Sars.

“[Ndhlela] is a relative of Mr Moyane; we’ve discussed that with Sars at length – there’s no hiding that from a disclosure point view,” Marshall said during a phone call.

He refused to say whether this disclosure had been made before or after amaBhungane started asking questions in August.

Several days after Marshall’s initial phone call, he sent amaBhungane a written response in which he admitted that Lekgotla Trifecta had not disclosed the relationship between Ndhlela and Moyane up front, while also inadvertently confirming that they had been concerned enough about a potential conflict of interest to seek legal advice.

“By law we were not required to disclose the relationship as the commissioner is not involved in the evaluation or adjudication of tenders. We obtained legal advice to that effect.”

Last week, Ndhlela’s lawyer, Jim Matemane, confirmed that the consortium had disclosed this information only after Sars started asking questions, saying: “The disclosure was made when Sars made an inquiry about it.”

The position taken by Sars at the end of August, and echoed by Lekgotla Trifecta last week, is that because Moyane was not directly involved in the adjudication of the debt collection bids, it was not necessary for Lekgotla Trifecta to disclose that Ndhlela was a relative of Moyane’s.

Last week AmaBhungane put detailed questions to Moyane regarding his relationship with Ndhlela. In response Memela said this matter was addressed in a previous email: that “Commissioner Moyane was not part of the tender adjudication process and was unaware of any conflict of interest”. He added: “Sars will not make any further comments on the matter at this stage.”

The disclosure of Moyane’s relationship with Ndhlela, however, still appears to have caused some concern in Sars.

“Sars has requested [Lekgotla Trifecta] to provide it with written submissions on the allegations that have been made. The submissions are due by the end of the week,” Memela said last week. “Sars will decide on an appropriate course of action after consideration of [the] submissions.”

On Tuesday, Memela said the matter was still under consideration. – AmaBhungane Centre for Investigative Journalism

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