The head of a controversial water board, a deputy minister and a politically connected tenderpreneur allegedly met at a secret Cape Town location to discuss lucrative contracts that could be lined up for the benefit of their associates.
This is according to a damning forensic report that forms part of an investigation into allegations of internal misconduct and tender corruption estimated at R3bn at East London’s Amatola Water, which is the only water board in the Eastern Cape. It controls a R5.2bn budget and supplies water to communities in the Nelson Mandela Bay, Buffalo City, Amathole, Chris Hani and Sarah Baartman municipalities.
According to the report, Amatola Water CEO Siyabulela Koyo conceded during the investigation that he and politically connected business associate Sonwabile Antoni and some Amatola employees implicated in corruption — at least one of whom was on suspension — had met with the current deputy minister of water & sanitation David Mahlobo in Cape Town in August 2023.
The investigation, by forensic investigator Leon Nel, found the meeting was kept secret because it had not been sanctioned or approved by the board of Amatola Water.
When asked why he chose not to inform the board or obtain proper authority, he was unable to explain
— Forensic report
“When asked to [describe] the nature of the meeting and what was discussed, Mr Koyo was reluctant to be open about this, but was willing to admit it was an unofficial meeting,” the report reads.
“When asked why he chose not to inform the board or obtain proper authority, he was unable to explain. After the interview with Mr Koyo, while having a casual talk, he took his second phone from his table, and showed the investigator a WhatsApp discussion between him and Mr David Mahlobo.
“Mr Koyo then stated that he found himself in a very difficult situation where high-profile people would call him to meetings, only to find junior employees there and he gets introduced to business people. Mr Koyo, on the question of who paid for his trip, stated that he paid for his own flight and accommodation and paid for it by credit card. He was not willing to provide the investigator with the last four digits of his credit card.”
Koyo is said to have told investigators he had no knowledge of who paid for his subordinates. However, an invoice from the Cape Verde Hotel stated that their accommodation was paid for by Koyo.
It was also found during the investigation that Koyo allegedly destroyed or deleted “work-related or official Amatola Water information, files, documents, or communications from his devices shortly before it was confiscated on July 18 2024 to be forensically examined”.
The investigation also discovered that Koyo and other Amatola employees attended after-hours secret meetings about Amatola business.
These meetings were allegedly held at Antoni’s house in East London where visits are recorded by CCTV. It is alleged that “the group discussed how to manipulate tenders and deal with any internal or external opposition to their agenda”, according to the report.
“The discussions in MP06 [a WhatsApp conversation] emanated from these meetings with Mr Antoni and Mr Koyo where it was agreed to share bid (tender) information and to get rewarded for it. These meetings were in February/March 2023 and an Amatola employee pointed out to the investigator where the meetings took place,” said Nel in the report.
In the WhatsApp conversation, an employee appears to be communicating with Koyo and other employees about bids and the people they promised would be awarded some contracts. These included the lucrative contract for the construction and completion of the 10-megalitre Misty Mount Reservoir near Mthatha as part of the series of 14 construction projects aimed at providing water supply services to the King Sabata Dalindyebo Municipality.
Nel was initially hired by Koyo to investigate allegations of corruption reported via the corruption hotline against the employee, who is a technician at Amatola Water.
During the investigation, the technician confirmed the secret meetings at Antoni’s residence in East London as well as the Cape Town one with Mahlobo, other politicians and business people. He admitted to soliciting bribes from service providers in 2022; two of them paid R200,000 and R400,000 respectively into his wife’s Capitec account.
After this investigation, the technician was removed from the bid evaluation committee but allegedly continued to coach “service providers who did not win bids on how to contest decisions of the tender bids”.
“Regarding the details of who was present at the meeting and what exactly was discussed, (the technician) suffered memory loss. What he was willing to disclose was that the other individuals were 'high profile politicians and businessmen' and that the meeting was 'secret' as all cellphones had to be put in flight mode and placed away from the meeting (to prevent recordings),” said Nel in the report.
Another Amatola employee, who was on suspension at the time of the Cape Town trip and was not supposed to be in contact with any Amatola employees, admitted to being part of the meeting and told Nel that he could not remember who else was at this meeting other than that “it was high-profile people, and the one person was from the Eastern Cape”.
I am highly disappointed that the board decided to terminate the CEO's contract without allowing due disciplinary processes to follow their course
— Pemmy Majodina, water & sanitation minister
“He did not consider the trip as illegal or irregular but agreed that it may have been questionable, especially in the light that he was on suspension at the time and was promised that at this meeting his [misconduct] problems would be taken care of,” said Nel.
Antoni this week said: “I am not an employee of Amatola Water and I think they are in a position to answer anything that relates to their employees better, and I have no business interests with Amatola Water.”
The technician was suspended in June, Koyo in July, and the other employee, who was attached to Koyo's office, in August.
Koyo was eventually fired by the board on August 30 in a letter written by the then interim board chair Pamela Yako.
“The board was satisfied that the correspondence exchanged has established, beyond doubt, that you do not consider yourself bound by a material term of your contract of employment — being your legal obligation to, at all times, act in good faith towards your employer and answer all reasonable and lawful questions posed to you by the board, through the chairperson,” said Yako in the letter.
“Given the nature of the breach and its materiality, the board was satisfied that your conduct constitutes a repudiation of your contract.”
His axing set off a chain of events in which water & sanitation minister Pemmy Majodina became embroiled in a row with the board. Just three days after Koyo was fired, Majodina wrote to the board expressing her disappointment and instructed it to reverse the decision.
This week saw a tit-for-tat exchange of letters between Majodina and the board, regarding the minister’s alleged “illegal” instruction for the board to reinstate Koyo.
Majodina said she had been told by Yako there would be further engagement with her as the stakeholder representative before a decision was taken and that charges would be formulated and disciplinary processes would be followed. “However, I am highly disappointed that the board decided to terminate the CEO's contract without allowing due disciplinary processes to follow their course,” said Majodina.
This led to Koyo's reinstatement on Thursday. But the board has raised issues with the decision, as it alleges that the reinstatement was unilateral by Majodina and the new interim board chair Ndumiso Tyibilika.
“We are deeply concerned by the unilateral action taken by our chairperson in overturning a prior board decision regarding the suspension of Mr Koyo, without any formal resolution from the board. The decision to lift Mr Koyo’s suspension was not discussed nor agreed upon by the full board,” said the other board members in a letter to Majodina.
“Despite our efforts to engage the chairperson in an attempt to reach an amicable resolution, he informed us that he had already communicated his decision to the CEO, again, without a board resolution. He further suggested that the board could retroactively ratify his actions at a later date.”
The board members cautioned that the reinstatement was an error and that this was a governance issue which should be dealt with internally without the minister’s involvement.
“We believe this approach is inappropriate for two key reasons: the circumstances that led to Mr Koyo’s suspension remain unresolved. Mr Koyo has yet to respond to specific questions posed by the board, which are critical to our investigation.
“[Second], there are allegations in the report that Mr Koyo deleted information from his phone, which we regard as tampering with evidence. This is a serious misconduct that, in our view, cannot be overlooked by the board.”
Majodina responded with an acknowledgment of the letter and agreed to hold a virtual meeting with the board.
Contacted for comment, Koyo referred queries to his lawyer Neville Gawula who said he could not comment comprehensively because he had not seen the report.
“We want the report and minutes of the board meeting leading up to his dismissal. But we know for a fact that the decision [to fire Koyo] by the board was not taken in consultation with the minister. It is our contention that the dismissal was unlawful,” said Gawula.
He said Koyo had been fired because he declined to respond to questions, which were sent to him during the investigation.
The spokesperson for the department of water & sanitation, Mandla Mathebula, said Majodina was not aware that there had been no board resolution to reinstate Koyo as she had presumed that Tyibilika was relaying a board decision.
“The minister only received correspondence from the other board members later, after Mr Koyo had been reinstated. The minister has noted the serious allegations made against Mr Koyo and wants the board to exercise its responsibility to deal with these but wants this to be done within the realms of the law. At a meeting with the department this week, the board committed to develop a framework to institute a disciplinary process against the CEO,” said Mathebula.
He said Mahlobo has disputed the allegation that he held a secret meeting.
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