Three top officials from the office of the chief justice are accused of corruptly setting themselves up for a large slice of a R225m IT contract after they helped to strike the deal.
The three — former CFO Casper Coetzer; former spokesperson and chief director of court administration Nathi Mncube; and former case management director Yvonne van Niekerk — all resigned last month and served their last day on the job on May 31.
The next day, they began new jobs as local partners to multinational media and technology organisation Thomson Reuters, which had been awarded the R225m, six-year contract by the office of the chief justice (OCJ).
Through their subcontract, they are set to earn 30% of the value of the deal, or at least R67.5m. It is unclear what work they have to perform on the contract.
On Friday, the OCJ told the Sunday Times it was taking legal advice.
“The OCJ can confirm that it was made aware of a subcontract between Thomson Reuters and the South African company in question (ZA Square Consulting),” it said.
“In addition, the OCJ can confirm that all the directors of the local company [Coetzer, Mncube and Van Niekerk] played a role in the process which led to the granting of an award by the OCJ to Thomson Reuters.”
The OCJ declined to comment further, saying “it would not be appropriate to provide any additional information in this regard”.
Thomson Reuters, which is based in Canada, said ZA Square was subcontracted on merit after it responded to an advertisement in January seeking a local partner, and there was no wrongdoing involved.
“The government has robust procurement legislation and processes premised on Treasury Regulation 16A3 that the OCJ followed,” company spokesperson Dave Moran said.
We had no contact with the three directors of ZA Square as part of the bid process
— Thomson Reuters spokesperson Dave Moran
“We had no contact with the three directors of ZA Square as part of the bid process. After the bid was issued by the OCJ central bid inquiries team, Thomson Reuters could only make inquiries relating to the bid via government procurement channels.”
Mncube, speaking on behalf of himself, Coetzer and Van Niekerk, said they had done nothing wrong because their contract began on June 1, and their company had not earned any income until May 31, when their employment at the OCJ ended.
The contract relates to the national rollout of CaseLines, a digital case management and litigation system that allows for court documents to be filed digitally. It was piloted in Gauteng in 2019.
In terms of the contract, Thomson Reuters — owner of the CaseLines software — will make licences available as well as provide maintenance and support to the OCJ for six years.
The pilot version of the contract in Gauteng was awarded to local company Tirisan Tech Solutions as a reseller of the Thomson Reuters software licence. For the new contract, a source in the OCJ told the Sunday Times, a decision was taken to go directly to Thomson Reuters and remove the middleman.
“It is just bizarre that after removing Tirisan, the department [of justice] decided to install a new middleman, owned by these guys,” said the OCJ insider, who asked not be named as they are not permitted to speak to the media.
“You cannot run from the fact that these guys gave themselves this contract, because the CFO was also acting chief information officer and the other two also oversaw implementation of CaseLines. It seems that all this time they were setting themselves up.”
Mncube denied this allegation. However, he did not respond to specific questions, saying public servants are not prohibited from owning private companies.
Tirisan director Rendani Ramabulana did not respond to requests for comment.
You cannot run from the fact that these guys gave themselves this contract, because the CFO was also acting chief information officer and the other two also oversaw implementation of CaseLines. It seems that all this time they were setting themselves up
— OCJ insider
The questions over CaseLines have arisen as chief justice Raymond Zondo prepares to release the final tranche this month of the report of his commission of inquiry into state capture.
The contract exposes the apparently loose controls at the OCJ, which only sought legal advice about the contract after the Sunday Times made inquiries about it this week.
Although the OCJ reports to the chief justice on matters of support for the judiciary, its administration, including procurement, falls under its accounting officer, Memme Sejosengwe, who reports to justice minister Ronald Lamola.
It is not clear whether Sejosengwe approved the contract as well as the deviation from normal procurement processes, as required by Treasury rules.
This week, Thompson Reuters told the Sunday Times that it initially had no intention of subcontracting, and that the OCJ informed it only in November last year — a few weeks before the contract was awarded — that a local partner was required.
“We did not intend to subcontract any of this work to another firm and began a recruitment process to hire local expertise to support internal capacity to deliver this work. However, new government legislation in November 2021 required us to subcontract at least 30% of the work to a local firm,” the company said in response to questions.
The multinational firm did not say who at the OCJ told it a local partner was required.
Preferential procurement regulations issued by the Treasury in 2017 require that subcontracting be included in tender specifications before the process starts.
Asked about the apparent conflict of interest, Moran said: “The RFP [request for proposal] process for the appointment of a subcontractor was managed by Thomson Reuters’ procurement office. As part of the RFO [request for offer] process, we asked vendors to declare any conflicts of interest … and we carried out checks in accordance with local regulations.”
Moran said South African laws precluding civil servants from doing business with the state were not contravened because the contract only started on June 1, and the three left the department the previous day. The company said yesterday it has begun a formal investigation into the matter.
Mncube echoed Thompson Reuters’ initial statement, saying: “Public servants are required to seek permission to perform remunerative work outside the public service. While we were public servants, our company did not generate any income until May 31 2022. Therefore, there was no obligation to seek permission to perform remunerative work as no remunerative work was conducted.”
Mncube did not respond to detailed questions.
Profiles on their new company website show that Mncube chaired the justice department’s e-filing steering committee, which oversaw implementation of CaseLines in 2019. It further states that he was a member of the ICT steering committee as well as the finance committee.
“Through these committees he was able to influence the order of prioritisation of funding of ICT projects supporting the judiciary and funding of human resource positions,” the company’s website says of his role.
Coetzer was not only the CFO, he acted as the OCJ’s chief information officer — under whom the IT department fell — for almost two years. He also chaired the OCJ’s bid adjudication committee, which recommends winning bidders, and the ICT steering committee, the website said.
“He also played an active role in the court online steering committee, developed the ICT strategy for the OCJ and assisted the business units in the OCJ to identify and conceptualise court modernisation projects,” it added.
I do not see it as a conflict based on the timing and the facts
— Former CFO Casper Coetzer
Coetzer said he saw nothing untoward about his company bidding for work on the contract.
“We decided to create this company after the award was made … Our decision was definitely only made afterwards. I was against subcontracting [in the bid adjudication committee], so I could not have tried to manipulate this process,” he said.
“I do not see it as a conflict based on the timing and the facts … There is nothing to do to prove to you what was in my mind at that time in December … On December 10 I did not even contemplate this.”
Coetzer insisted there was nothing wrong with overseeing a procurement process as chair of the bid adjudication committee and later becoming a subcontractor for the same contract.
He said the committee he chaired did not regard it as necessary to readvertise the tender to insert, into the specifications, a requirement to have a local partner.
Thompson Reuters and Mncube maintain there was nothing untoward about the deal. But the Sunday Times has established that ZA Square Consulting was registered on December 15, five days after the OCJ awarded the contract.
A former senior employee at the Treasury’s chief procurement office, who asked not to be named, described the situation as a “javelin” — a common scheme in which government officials design tenders for specific companies and then leave, once signed, to emerge as stakeholders of the winning bidder.
Another senior government official described the contract as “irregular” and “problematic”, adding that the contract would be unlikely to withstand scrutiny.
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