Fresh allegations have emerged that millions of rands in cash for social welfare grants was diverted to a senior official at Cash Paymaster Services (CPS), the company responsible for paying social grants in the late 2000s.
The cash, allegedly withdrawn from banks and a social security cash depot without the requisite paperwork, is said to have changed hands in the underground parking lot at the CPS offices in Rosebank, Johannesburg.
The astonishing claim has come to light in an affidavit deposed by a former senior security officer at Fidelity Services Group (FSG), who does not wish to be named on the grounds that his life would be at risk. FSG was the company appointed to secure the movement of money from depots and banks to social grant paypoints nationwide.
Although the officer previously submitted an affidavit to the Zondo commission in 2020, the issue was not investigated at the time.
Now the officer has filed a new affidavit ahead of judge Margaret Victor being appointed by the Constitutional Court in December to lead an inquiry into financial aspects of the five-year social grants tender, which was declared unlawful after it was awarded to CPS in 2012.
The Sunday Times understands the new statement will be probed by the Directorate of Priority Criminal Investigations (Hawks).
The latest affidavit, which the Sunday Times has seen, details how some of the cash the officer and his colleagues collected and delivered to Nanda Pillay, who was COO of CPS at the time, went into the boots of two vehicles — one of them Pillay’s BMW.
The movement of the cash in private vehicles and the lack of paperwork raise suspicions that the money was being stolen to benefit individuals who worked for CPS or were linked to the company in other ways. There is no suggestion that Fidelity or its CEO, Wahl Bartmann, benefited from this cash. At the time, CPS was one of three companies the South African Social Security Agency (Sassa) appointed to pay social grants in cash at paypoints across the country. FSG was appointed to transport and secure all the cash.
“Mr Wahl Bartmann was the person who instructed me personally via telephone to execute the collections and drop-offs, after which I chose the teams for each collection and drop,” the officer says in the affidavit.
“It was during 2010 that I made my concerns clear to Wahl that I am uncomfortable with being involved in the cash drops to Nanda without any paperwork, and that it is at least in contravention of the South African Reserve Bank codes and regulations in respect of handling or transporting cash.”
Bartmann did not respond to queries.
According to the affidavit, the officer and his colleagues were instructed 'on about 20 other occasions' to pick up money from the CPS cash depot in Brits and take it to Pillay in Rosebank
FSG declined to respond to specific allegations in the affidavits, but said it could confirm that it “provided services to CPS to move and secure cash, including the daily movement of cash at depots, pay sites, offices, branches, and ATMs”.
“We confirm we complied with all Reserve Bank regulations and processes,” FSG said.
In his earlier affidavit to the Zondo commission, the former employee details three occasions on which a total of R11m in cash was withdrawn from:
- an Absa branch in Fourways Mall (R1m between 2005 and 2006);
- a Nedbank branch between Fox and Marshall streets in the Johannesburg CBD (R4m); and
- an FNB branch in Selby (R6m during 2008/2009).
In two of the three instances, FSG officers used their private vehicles for the collections and only once did they travel with an armoured car.
“We arrived at First National Bank, Selby branch in Johannesburg, where we were assisted by a senior black bank official who was very agitated. He made us wait for 4½ hours as there was lack of paperwork and we did not have an appointment time to pick up the cash,” the FSG official said.
On the Nedbank run, the Fidelity officers were accompanied by Pillay himself.
“The money was counted using cash teller machines a few times over, as the amount to be withdrawn did not add up. Nanda was frantic and I went up the stairs to see what the delay was as we were double-parked outside the bank in civvies and with long guns.
“Eventually the ladies in the vault and Nanda agreed that the cash was a match and I carried all four bags to the vehicle. I put all the cash in the back seat and Nanda sat on top of the cash, calling Wahl,” the officer said.
He said he and a colleague sat on either side of Pillay as they drove to the CPS offices in Rosebank.
“At the office of CPS, Mr Pillay put two bags (R2m) in his BMW’s boot as per previous time and we drove back to our offices. There was a guy waiting with his driver in a black Mercedes and the other two bags were put into his car by Nanda,” he said.
“It was also one of my duties to collect money from the CPS depot in Brits, North West, on behalf of CPS and then transport the money to the cash payment points ... We sometimes used the chopper to save time. We also did this in Mthatha a lot.”
According to the affidavit, the officer and his colleagues were instructed “on about 20 other occasions” to pick up money from the CPS cash depot in Brits and take it to Pillay in Rosebank.
“Sometimes the cash was transported in an armoured vehicle from Brits to Fidelity’s Robertville office and we waited there for the cash. We then took it to Rosebank on many occasions.”
A source with direct knowledge of the affidavits and the investigations said the former Fidelity employee’s account was important in uncovering the potential looting of state money meant for the poor.
The source said the officer’s evidence could help to explain why Sassa seemed at the time to act in the interests of CPS rather than those of grant beneficiaries.“No-one can quantify how much these people could have stolen,” the source said.
It’s just outrageous that business continues and everyone blames the state for corruption while the private sector, the enablers, mostly walked away like nothing happened
— Source with direct knowledge of the affidavits and the investigations
“It’s just outrageous that business continues and everyone blames the state for corruption while the private sector, the enablers, mostly walked away like nothing happened.”
Asked for comment, Pillay said cash was often delivered to CPS offices as the company had an automated teller machine to allow cash disbursements, but he denied that any of the cash ended up in his car.
“I have no idea what this guy is talking about, and I am not even sure who he is.”
He added: “I don’t even think that they were going to banks in 2005, they were actually going directly to the depots if I recall correctly, but it was a long time ago. If there are two affidavits, they must be given to the police and let them investigate it.
“Absa was definitely not a banker of Net1 or CPS at any point in time so that’s not possible.”
CPS is a subsidiary of Net1, now known as Lesaka. The Sunday Times also established that the whistleblower sent an e-mail to Bartmann in November 2022 with the same allegations as those in his affidavits.
“I realised during the Black Sash’s court case against minister Bathabile Dlamini what the monies were for,” he said in the e-mail. Dlamini was minister of social development from 2010 to 2018.
“I surmise it was used to facilitate state capture by recklessly disbursing Treasury money in cash to employees of CPS. It did bother me at the time, as I did not know what it was for, I was the security lead and that was my role at the time. I estimate R30m-R40m was disbursed in such a manner with no paper trail in the mentioned period.”
Absa said in the absence of more detailed information, and the fact that many of its staff were on leave in December, it could not respond meaningfully to questions about the affidavits.
Nedbank said it was not aware of the transaction described by the Fidelity officer but the bank was committed “to upholding the highest standards of governance”.
FNB said it needed additional information, including supporting documentation, account details and amounts before it could comment.
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