City of Johannesburg entity paid R1m for a wall that was never built

The Johannesburg Social Housing Company (JOSCHO) CEO, Themba Mathibe, allegedly paid R1 million to a subcontractor for the construction of a wall that was never built.

At the same time, Eyewitness News has learned that the JOSCHO disregarded its own recommendation to suspend Mathibe (29) during his tenure as the Chief Operating Officer (COO).

Instead, he was promoted to his current position of acting Chief Executive Officer (CEO).

Mathibe has recently been thrust into the spotlight after his dramatic arrest for suspected money laundering by the Special Task Force, the South African Police Service (SAPS)’s most elite unit.

Police confirmed that during his arrest, he was found with a substantial amount of cash at his home near Sandton.

Mathibe appeared before the Alexandra Magistrates Court in January and is currently out on R50,000 bail.

THE WALL THAT NEVER WAS

A letter penned by the city’s former Human Settlements MMC, Anthea Leitch, in December 2023, reveals Mathibe signed off on a payment of about R1 million to a subcontractor for the construction of a wall that was never built.

While the subcontractor received the funds, it’s alleged that it submitted fraudulent photos showing a wall built elsewhere. The subcontractor claimed the wall had been erected at the intended location, Moffat View Old Age Home.

Leitch’s letter also states that the contractor had arrived to construct the wall but was instructed by Mathibe not to proceed with the work.

In a response to Eyewitness News' inquiry, the JOSCHO said, “The service provider involved was blacklisted from conducting any further work with the entity.”

INTERNAL INVESTIGATION INTO PHANTOM WALL LAUNCHED

This triggered a major internal investigation into irregularities surrounding the contract, after payment had been made for a wall that didn’t exist.

While the JOSHCO launched its own probe, the Johannesburg Group Forensic Investigation Services (GFIS) was later brought in to examine the serious discrepancies in the project.

The same letter further alleges that Mathibe interfered with the investigation by attempting to recover the funds from the service provider without first obtaining legal advice.

“Most worrying of all is the recent message from Mathibe informing us that arrangements have been made for the contractor to repay the R1 million into JOSHCO’s account. Mathibe did not consult with his immediate superior, the CEO, before engaging in this action,” the letter states.

“Legal advice should have been sought on the implications of this action before it was agreed to. On the face of it, Mathibe was interfering with an active GFIS investigation. This matter was referred to GFIS before Mathibe became involved in the recovery of the funds, and he was fully aware of the investigation,” Leitch wrote.

However, contrary to Leitch’s letter, the JOSCHO claims Mathibe had no hand in the attempt to defraud the city.

“During this process, the project manager responsible for the misrepresentation admitted to the misconduct during questioning,” the JOSCHO said in a statement.

THE SUSPENSION THAT NEVER CAME

Following the letter, the JOSHCO board noted and approved the then CEO Bongani Radebe’s intention to place Mathibe on precautionary suspension for allegedly interfering with the probe.

“The JOSHCO board notes the intention of the CEO to issue precautionary suspension to Mathibe and any other officials for possible interference with the investigation,” then board chairperson Sesupo Mbonambi said.

However, Mathibe was never suspended. Instead, he currently serves as the acting head of the city entity and is the CEO of the Johannesburg Development Agency (JDA), where he reportedly earns R3.3 million a year.

The JOSCHO said there was no prima facie evidence that could have justified Mathibe’s suspension despite the recommendation, which Eyewitness News has seen.

“Only the Chief Executive Officer is empowered to place an executive on precautionary suspension. Such a measure is ordinarily considered where there is a reasonable belief that an employee may interfere with investigations or influence witnesses. In this instance, the investigation was already well advanced, and the material facts had been established.”

The entity said the R1 million aid to the contractor was recovered.

“All monies paid in relation to the wall transaction were fully recovered and appropriately recognised in JOSHCO’s financial records more than two years ago,” JOSHCO said.

MATHIBE’S RECENT ARREST

On the day of Mathibe’s arrest, police also raided JOSHCO’s offices in Braamfontein, where several senior officials were questioned.

It is understood that law enforcement carried out the raid as part of an investigation into serious procurement irregularities at the entity.

Mathibe was among the senior officials questioned by police, but he was only arrested later that day at his home.

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