'Millions paid in power grab bribes'

Bags of cash totalling R14m a year were allegedly handed over as bribes to Emfuleni municipal employees to help a company hook up an illegal electricity connection and tamper with meter readings. 

The illicit agreement is believed to have saved Yellow Star Manufacturing — a Vereeniging-based metal castings producer for big mining and steel firms — millions of rand a month, effectively cutting its power bill in half. 

So brazen was the scam that a transformer was allegedly stolen from an Eskom depot in the Free State and installed on the company's premises.

The power heist is believed to have contributed to tanking the delinquent municipality’s finances to such an extent that Eskom attached its bank accounts last year to recoup R8bn in debt.

The startling claims against Yellow Star Manufacturing (YSM) were made by the company's former CEO, Andries Marx, in a statement to police in 2023.

He claims the company's owner, Hanno van Dyk, brokered the deal with municipal officials. But Van Dyk has denied having any knowledge of the deal and has accused Marx of carrying out the bribe scheme undetected because he trusted him as the CEO. 

The two former colleagues have had a major fallout. Marx, who is facing fraud charges for allegedly stealing more than R30m from YSM, alleges in his warning statement to police that Van Dyk laundered money, evaded taxes, fronted using black employees for BEE scores and engaged in other fraudulent activities.

He made the statement after Van Dyk opened a case of fraud against him for allegedly stealing millions from the company. 

In the statement, Marx claims YSM dished out monthly bribes to employees in the municipality's electricity department amounting to about R14m a year. He said the deal was struck in 2014, when YSM could not settle its R2m debt to the municipality.

Marx said despite the fact that YSM was consuming a substantial amount of electricity to power its operations, it did not pay anything above R100,000 a month to the municipality.

Emfuleni's R8bn Eskom debt accounts for 10% of the R82bn owed to the power utility by municipalities. Eskom has recently begun enforcing a 2023 court order compelling Emfuleni residents to pay their electricity bills directly to it. 

According to Marx’s statement, municipal employees would hand deliver fraudulent municipal bills and issue fraudulent invoices, which the company paid in bags of cash or through electronic funds transfers (EFTs).

“Emfuleni representatives visited the offices of Yellow Star and offered to have the debt of around R2m squashed as well as doing modifications to the meters and cabling to reduce the electric consumption readings significantly. In return they requested R200,000 payment. Hanno van Dyk was 100% shareholder and the only director of Yellow Star. Hanno van Dyk transferred R200,000, which I had to draw in cash and pay the bribe in cash.”

The bribe was to “reduce the Emfuleni bill as well as readings by doing alterations to the meter and cabling. In my capacity as financial manager I had to withdraw the money, then TD Moketeli went out to pay the cash bribes... Cash bribes were always handed over in the road at Rand Water’s entrance as you enter Vereeniging town from Vanderbijlpark. I handed money to Thabo Kanye at this location, but the rest was all handled and paid by TD Moketeli”, said Marx in his statement.

The Sunday Times has seen both official and fraudulent municipal accounts for YSM, which are contained in Van Dyk’s forensic investigation used to open a case against Marx.

Van Dyk claims he only became aware of the scheme after he fired Marx in 2022 and the municipality sent YSM a R10m bill for accrued arrears from 2014. “I had to pay that money out of my own pocket. I then discovered a stack of fraudulent invoices in Yellow Star offices, which the bookkeeper said were given to her by Dries [Marx] and were captured as legitimate invoices when in fact they were not,” said Van Dyk. 

After his axing in 2023, Marx opened a case against YSM and Van Dyk over the same allegations.

Hawks spokesperson Brig Nomthandazo Mbambo said a case of tampering with essential infrastructure was being investigated by a team established to investigate Eskom-related incidents.

“The case was registered after information came to the attention of the team about an Eskom transformer, which was confirmed to have been stolen from the Eskom depot in Welkom, which was found on the premises of the mentioned company [YSM].

“The case was referred to the director of public prosecutions for a decision,” said Mbambo.

Emfuleni spokesperson Makhosonke Sangweni maintained that no municipal employees were bribed and that the people identified as having been bribed were employees of a company contracted to the municipality. He refused to name the company.

According to these claims, the company’s smelters, supplied by the Leeukuil substation in Vereeniging, were allegedly receiving power through an unauthorised underground bypass. It was further asserted that an employee of Emfuleni involved in this process was receiving a monthly payment of R400,000 from Yellow Star’s management.

Eskom said it was made aware of the alleged illegal connection at YSM when an employee there alerted them and the Hawks in 2023.

“According to these claims, the company’s smelters, supplied by the Leeukuil substation in Vereeniging, were allegedly receiving power through an unauthorised underground bypass. It was further asserted that an employee of Emfuleni involved in this process was receiving a monthly payment of R400,000 from Yellow Star’s management. The matter was referred to Eskom’s Gauteng cluster,” Eskom said in a statement to the Sunday Times.

Last month the Sunday Times revealed how Marx had accused Van Dyk of money laundering, fraud, tax evasion and BEE fronting. The alleged financial crimes, involving more than R14m, are said to have financed Van Dyk’s pursuits in Croatia — including a fleet of luxury yachts and high-end apartments in the picturesque coastal city of Split.

Van Dyk’s lawyer, Robert van Wyk, this week told the Sunday Times they found it strange that the case was being handled in the Free State.

“The search and seizure warrant that was executed by the Hawks in 2023 was just another Gestapo tactic to intimidate my client. They took transformers which were privately bought by our client and to date we have not heard of any arrests.”

He said his client was a victim who trusted Marx to run the business with honesty, as he had retired.

“This was in fact Mr Marx acting of his own accord and not on behalf of Yellow Star and or Mr Van Dyk. However, what is documented and proven is that Mr Marx, through Tabgha Holdings, falsified Emfuleni invoices and misappropriated YSM funds for his personal gain,” said Van Wyk.

He said the company had co-operated with the municipality, paid the outstanding bill and a R40,000 fine for tampering with essential infrastructure, in order to get reconnected.   

“YSM continues to consume and pay for electricity as per its municipal billing statements. Any suggestion that YSM has not been paying Emfuleni municipality or that it has engaged in illegal connections is entirely false,” said Van Wyk.

Van Dyk showed the Sunday Times’ current municipal bills showing that YSM pays between R2.5m in summer and about R3.5m in winter.

He said he discovered that Marx used a company he owns with his wife, Tabgha Holdings, to siphon money from YSM, claiming they were payments to the municipality.

However, Marx claims in his warning statement that Van Dyk was the mastermind behind the illegal electricity connection and bribes.

He says he and another YSM employee, David Mokoteli, were rewarded with shares in the company following their “capture” of Emfuleni officials.

Marx attached to his warning statement proof of payments of EFTs which were used to bribe the officials. One such employee was Thabo Khanye, who received amounts ranging from R15,000 to R60,000 a month. Marx attached a picture of Khanye’s Capitec Bank account card and the thousands of rand in EFT payments made.

Approached by the Sunday Times, Khanye denied receiving money from YSM or Marx. “I left Emfuleni about three years ago and I don’t know what you are talking about or the people you are talking about. I have not been questioned by any police or anybody about what you are asking me,” said Khanye.   

Mokoteli, who is expected to testify against Marx in the fraud case of R30m, also denied bribing municipal officials. “I can’t speak too much about this thing but Dries is not telling the truth. I did what I was asked to do as an employee,” said Mokoteli.

Marx is due to appear in court again next month together with his wife Henriette and friend Scott McIntyre.