Since Friday, 23 October, the Hawks have arrested executive mayor, Kgotso Khumalo, the director of community services, Cyril Henry, and the caretaker of the recreation and sports facilities, Mohau Shuping, on charges of theft and fraud.
Khumalo and Henry appeared in the Potchefstroom Magistrates’ Court on Friday (23 October) and Shuping handed himself over on Monday, (26 October). The three suspects have not been detained and will appear in court again on 1 December, provided they don’t come near the municipal buildings or contact a list of witnesses involved in the case.
According to the spokesperson of the municipality, William Maphosa, the mayor was on leave at the time of his court appearance and had appointed the MMC of Finance, Kelvin Johnson, to act on his behalf. Johnson, a cousin of Cyril Henry, will serve in the position of executive mayor until 15 November 2020.
Captain Tlangelani Rikhotso, the provincial spokesperson of the Hawks in the North West, said the arrests emanate from a Hawks’ commercial crime investigation into a trust account. Approximately R5 million, intended for the J.B. Marks municipality, was deposited, but the funds were never declared to the Auditor-General.
The Herald previously investigated that the trust fund was held by one of the municipality’s local lawyers. Some of the money that was paid into the trust account comes from a rental agreement between the municipality and a mining company. According to documentation, the agreement between the municipality and the company is for R1 million per year, escalating at eight per cent per year since July 2017.
Last year, Lebu Ralekgetho, the municipal manager, explained that the funds were ring-fenced for local economic development to ensure that funds earmarked for service delivery aren’t used for the purposes of marketing the city and securing events. According to him, the funds are being held in trust as the municipality’s lawyer is in the process of collecting the outstanding amounts due to the council by the mining rights holder. “The attorney reports to the council on the progress of the matter monthly. Their trust funds are also subject to trust audits on a quarterly basis as part of governing laws applicable to trust accounts. All municipal finances are also audited annually, as legislated,” he said in 2019.
A staggering R161,329.82 from the trust fund was spent on sending a delegation to Durban. Mohau Shuping was part of this delegation. Part of this four-day trip was spent at the Durban July. Shuping posted photos of himself at the event on Facebook. He has since removed them from his profile.
When the editor of the Herald, Dustin Wetdewich, approached him for his comment on the trip, he replied with a picture of Dustin and his two under-aged children – a gesture that was interpreted as a thinly-veiled threat. Shuping was asked for comment as he had attended the Durban July but did not work in the local economic development sub-unit.
Money from the fund was meant to be ring-fenced for local economic development. After the articles were published, Shuping, through a lawyer, demanded that the Herald retract an article stating that he had threatened Wetdewich. He denied that he had any intention of doing so.
Ralekgetho, defended the trip, stating that it was part of an extended trip to KwaZulu-Natal, in line with the city’s strategy of positioning itself as a mecca for sports, arts, and culture. It was also supposed to establish J.B. Marks as the destination of choice for sports camps for international and national teams and arts and cultural events. He also promised to present a report on the trip to the next council meeting. To date, no such notice has been discussed by the municipal council.
In October 2019, the Herald reported that the executive mayor had approved a special local economic development (LED) project in Ventersdorp with funding from the same trust account. An amount of R100,000 was paid into the account of a catering company. He undertook to refund the money.
In 2019, the mayoral spokesperson said the money had already been refunded. According to him, the funds were paid in the form of a loan, which was reportedly settled in full. When the Herald spoke to the owner of the catering company, however, she had no recollection of the money. She said her company had never done any business for that amount.
The municipality also came under fire from the late MEC for Cooperative Governance and Traditional Affairs, Gordon Kegakilwe, who called for investigations into these serious allegations.
The DA constituency head of J.B. Marks, Chris Hattingh, says Khumalo should tender his resignation with immediate effect, following his arrest by the Hawks. “It is outrageous that the ANC claims to be shocked at the arrest of its deployed cadres when the DA has repeatedly alerted the party to financial misconduct, implicating the mayor and J.B. Marks officials.
“If Kelvin Johnson, as the member responsible for finance, was capable of fulfilling this important responsibility, he would have known of the fraud, theft, and corruption throughout his term of office, but failed to report it to the council. He should also have reported taxpayers’ funds being held illegally in a lawyer’s trust account and payments made directly from it, evading the council’s financial system and the Auditor- General’s audit.”
The VF Plus also demands the resignation of the executive mayor, saying the residents of Potchefstroom and Ventersdorp have had to watch their once-proud towns systematically falling into disrepair for far too long, under the rule of Khumalo and the ANC. 
