Former Treasury DG resigns in the wake of corruption allegations

Dondo Mogajane continues to protest his innocence. But the fact that he has stepped aside from his position as Moti Group CEO and chair of the Government Employees’ Pension Fund suggests the times are changing.
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Could it be that the penny is dropping? Former Treasury director-general Dondo Mogajane has announced he will step down as CEO of the Moti Group and the chair of the Government Employees’ Pension Fund following allegations made against him by the former chair of VBS Mutual Bank that he accepted a R1m bribe. 

Mogajane previously resisted standing down from either post, and “categorically denied” that he ever accepted any bribes, despite a very colourful statement made by former VBS chair and convicted felon Tshifhiwa Matodzi.

Matodzi said in a sworn statement made as part of his plea bargain that he had met Mogajane several times, but most importantly at the PedroPortia Cigar & Champagne Lounge in Fourways.

Though the circumstances are disputed and cloudy, it’s alleged that it was at this meeting that Mogajane indicated he would accept a bribe in exchange for delaying or even reversing his own decision by withdrawing a letter from Treasury stating that municipalities should not invest in VBS because it was a mutual bank. 

Prior to the discussions, Mogajane was only really explaining the law, since municipal investments in mutual banks are contrary to the Public Finance Management Act. But Mogajane’s letter was devastating to VBS, which had previously discovered a rich niche by granting healthy kickbacks to municipalities that chose to invest. 

Hence, the bank was under enormous pressure to reverse the decision. Mogajane, on the other hand, has claimed in the past that this very letter underscores his innocence, since it indicated he did not do the bank’s bidding. 

The question for the Treasury was therefore whether it should require Mogajane to stand aside despite the fact that no formal charges had yet been filed and in the face of Mogajane’s protestations of innocence. 

Until now, politicians have claimed volubly in these circumstances that they are “innocent until proven guilty”, which has developed into a kind war-cry of the state capture accused. 

The fact that Mogajane has stood aside suggests the times are changing, and that this legalistic formula which has served the state capture accused so well up until now is wearing thin. 

A step forward

One of the things that has changed is that South Africa is now desperately trying to get off the greylist of the Financial Action Task Force (FATF), a multi-country body trying to fight money-laundering. And one of the things that FATF requires is that administrations take financial crime seriously.

Among many other measures, FATF requires countries to “demonstrate a sustained increase in investigations and prosecutions of serious and complex money-laundering and the full range of terrorist financing activities in line with its risk profile”.

That doesn’t necessarily mean that officials should stand down once they have been accused outside of court, but it does mean that the investigation process should not go into an everlasting loop that goes nowhere.

The fact that Mogajane has stood down suggests that investigators have in fact been asking questions, which is in itself a step forward.  

Mogajane himself is still staying on script. “It is with a deep sense of responsibility that I have made the decision to step down from all my professional roles and the boards that I have served, effective immediately,” he said in a statement on Monday.

“I believe in the importance of due process and remain confident that, in time, the truth will prevail, and my reputation will be fully restored.”

However, his problem is that Matodzi’s statement was not just a casual allegation: it was lengthy, very specific, and involved a variety of other personalities who themselves have added details to the alleged transaction. 

As for the Moti group, it has been involved in a series of attempts to silence investigative journalists at amaBhungane from revealing its business practices. The attempts have largely been unsuccessful. 

It’s tempting to suggest the tide has turned, and popular patience in society as a whole with dubious business practices is now waning. We will see.

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Tim Cohen

Tim Cohen is a long-time business journalist, commentator and columnist. He is currently senior editor for Currency and editor at large for the Daily Maverick. He was previously the editor of Business Day and the Financial Mail.

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