05/06/2017 07:33 SAST | Updated 05/06/2017 12:35 SAST

Deputy Finance Minister, Brother Benefited From Prasa Contracts

Sfiso Buthelezi and his brother have denied that there was a conflict of interest.

Deputy Finance Minister Sfiso Buthelezi and his brother allegedly benefited from contracts worth at least R150 million from the Passenger Rail Agency of South Africa (Prasa) while Buthelezi was the state-owned entity's board chairperson, News24 reported.

Buthelezi was appointed deputy finance minister on March 31 when President Jacob Zuma shuffled his Cabinet, firing Finance Minister Pravin Gordhan and his deputy, Mcebisi Jonas.

According to News24, the supplier of locomotives to Prasa, Swifambo Rail Leasing, reportedly appointed Inala Shipping to manage the shipping and logistics of the imported trains. Inala is reportedly owned by Nkanyiso Buthelezi, Sfiso's brother.

According to the report, Inala then appointed Sebenza Forwarding and Shipping, of which Sfiso Buthelezi is an ultimate beneficiary.

News24 reported that emails show Nkanyiso Buthelezi began to lobby Prasa just three months after the Prasa board awarded Swifambo a R3.5 billion contract. Sfiso Buthelezi was chairperson of the board at the time.

Other contracts with Sebenza were also signed, reportedly before Buthelezi resigned as Prasa board chairperson.

Both the Buthelezi brothers and Sebenza deny that this amounted to a conflict of interest.

News24 reported that while Sfiso Buthelezi resigned from Sebenza in 2012, he was still a director and shareholder of several entities that held shares in Sebenza, while key deals like the one with Swifambo were being negotiated.

"I was never in a meeting that decided to award any work to Sebenza by Prasa. I never influenced any decision to award work to Sebenza [and] I received no personal gratification from any of the entities you have mentioned in your questions (Sebenza, Swifambo and Inala)," Buthelezi told News24.

He reportedly said that he "played no role in the business relationships or transactions between Prasa, Swifambo, Sebenza or Inala".

Nkanyiso Buthelezi said: "To my knowledge there was never an instance where Mr Sfiso Buthelezi was involved in the adjudication of the Inala Shipping/Swifambo contract and indeed Swifambo is a standalone company with its own governance structures. It is also worth mentioning that we started courting Swifambo after the announcement of the winning bidder."

Sebenza's managing director, Xolani Sithole, told News24 that Buthelezi was a non-executive director of the company before his resignation, who was not involved in the day-to-day operations of the company and who declared his relationship at Prasa.