A former supply chain management head says she was dismissed for preventing a R140 million payment to an intermediary
New claims of malfeasance and involvement in state capture by politically connected auditor and Covid-19 looter Roshan Morar have emerged, more than two years after his death.
Morar’s auditing firm, Morar Incorporated, provided the KwaZulu-Natal education depart-
ment with a forensic report it used to engineer the “cynical” dismissal of its former head of supply chain management.
The official, Uma Nisha Maikoo, alleged in papers before the labour appeal court earlier this year that she had been removed for blocking a plan to pay R140 million to an intermediary in the province’s school nutrition programme in 2016.
The court has ordered her reinstatement, and in its judgment found that there had been no evidence or basis for her dismissal from the position.
Morar was a former deputy chairperson of the Public Investment Corporation (PIC) who signed off on its loss of R9 billion in the Steinhoff scandal through a loan to the Lancaster Group, of which he was a board member.
Morar was appointed to the boards of a number of public entities during former president Jacob Zuma’s term of office, while his firm secured highly lucrative contracts providing
forensic auditing and financial services to municipalities, departments and entities in KwaZulu-Natal.
In 2020 the Mail & Guardian exposed a R4 million personal protective equipment scam involving another of Morar’s companies, Amakhono Capital, which secured an agreement with the Special Investigating Unit to repay the money it made unlawfully to the education department.
None of Morar’s extensive network of companies have been blacklisted by client departments or entities.
Morar died in August 2022, but Morar Incorporated continues to do business with the state and is currently embroiled in a legal battle with eThekwini municipality over a R58 million tender it was awarded by allegedly irregular means in 2018.
In July, the labour appeal court ordered the education department to reinstate Maikoo, who it had fired in 2019 on the basis of a forensic investigation by Morar Inc.
In a review judgment, Judge Benita Whitcher found that the department “for some improper reason … strove to find charges” against Maikoo.
Maikoo was eventually dismissed on two charges, relating to the appointment of a staff member in 2007 and an unsolicited quotation from a service provider, over which she had earlier been cleared, after a forensic investigation was carried out by Morar Incorporated.
Maikoo approached the Public Service Bargaining Council, which ruled in her favour on one of the charges and found her guilty on the other. Both Maikoo and the department then took the matter on review.
The court ruled in Maikoo’s favour on both charges, ordering her reinstatement and finding that she “should have been found not guilty as charged”. She has, however, not been reinstated by the department.
Whitcher said in her judgment that the department had “vacillated” over the case, and had conducted multiple investigations into Maikoo. It has also repeatedly amended the charges it had brought against Maikoo “over a period of years” in the “stop-start” case against her.
“In the end the case they presented was devoid of any substance and a cynical and unnecessary incurrence of expenditure in the name of curbing corrupt and wasteful expenditure,” Whitcher wrote.
In her affidavit to the court, Maikoo said she believed that she had been dismissed because of her “principled stance” in opposition to a plan by then education MEC Mthandeni Dlungwana to “modify” the school nutrition programme in July 2016.
“In terms of the modification, funds [exceeding R140 million] would be diverted from the intended beneficiaries of the programme, who are schoolchildren from poor families, and paid to a ‘managing agent’ whose involvement would not add any tangible value to the programme,” Maikoo said.
“I point out that Mr Dlungwana’s intervention occurred during a period in the country’s history, which is now being investigated by the Zondo commission, when there was widespread corruption and ‘state capture’ within the public service,” she added.
Maikoo said she had been suspended in July 2016 and was charged on the basis of an investigation carried out by the Ngubane Consortium in 2017. But the hearing was abandoned as there was no evidence against her.
In 2018 she was served notice that the matter against her was proceeding and Morar Inc was brought in to pursue the case against her.
Maikoo said that at the arbitration it had been established that Morar Inc had been appointed irregularly and in violation of the Public Finance Management Act, which
itself was an act of wasteful and irregular expenditure.
But the arbitrator had found against her and she had been dismissed.
In addition to approaching the court, Maikoo laid a formal complaint of improper conduct against Morar with the Independent Regulatory Board for Auditors (IRBA) and submitted an affidavit with its investigative committee in August 2019.
In it, she said she believed she had been removed because she had refused to sign off on a number of high cost deviations from existing contracts and asked that Morar’s role in this be investigated.
The IRBA then initiated an investigation into Maikoo’s complaint and had discussions with Morar over the alleged inconsistencies in the forensic report during the course of 2021.
The investigation was closed after Morar died.
Khadija Pillay, a spokesperson for Morar Inc, said the court did not make any finding against the company.
“Morar Incorporated fulfilled the limited scope of its assignment with the KwaZulu-Natal department of education. Our report, the contents of which is confidential, was submit-
ted to our client,” Pillay said.
“The labour appeal court did not make any findings against our firm or our report. Any further enquiry regarding the judgment should be referred to the appeal applicant in
the matter.”
Muzi Mahlambi, a spokesperson for the education department, undertook to respond to questions from the M&G but had not done so at the time of writing.
Morar was a well-known philanthropist in Pietermaritzburg and one of South Africa’s leading black auditors who made his fortune through doing business with the political
elite, acting as auditor for their companies.
A former business partner of former health minister Zweli Mkhize’s wife May, Morar was appointed to the boards of a number of public entities during the presidency of
Jacob Zuma.
At the time of his death he owned 91% of shares in Morar Inc, which has extensive contracts with the state at various levels, despite his controversial history.
In its report, the Seriti commission into corruption at the PIC found that while chairperson of its investment committee, Morar had signed off on a loan to the Lancaster Foundation’s L101, of which he was a board member. Not only was this a conflict of interest but L101 had also paid R114 million in 2016 in commission for the loan, which amounted to R11 billion (including interest) by February 2019.
The loan to L101 was invested in Steinhoff, which in turn paid Lancaster a 2.5% underwriting commission, which the commission found to be “questionable” because
the money should have gone back to the PIC instead.
“The commission recommends that the PIC must obtain a legal opinion as to whether the R114 million underwriting commission that was paid to the Lancaster Group should have been paid to L101, or if it was in fact due to the PIC,” Seriti found.
“If the latter is shown to be the case, appropriate steps should be taken to recover the money.”
Seriti also found that PIC chairperson Dan Matjila’s conduct with regard to the matter had been “wholly improper” and that this “might be taken to indicate collusion” between him and Lancaster.
PIC spokesperson Adrian Lackay said the matter had been dealt with as part of the settlement secured with Steinhoff.
“The L101 transaction related to an investment in Steinhoff. Accordingly, the recovery relating to L101 was dealt with in conjunction with the Steinhoff global settlement, in which
the PIC negotiated for the maximum recovery available under the circumstances,” he said.
Lackay said the PIC had “engaged law enforcement agencies regarding matters arising from the Steinhoff and L101 investments.”
Pillay attempted to distance the company from its late founder. She said it noted “with regret the allegations made against the firm’s former managing director in both his personal and professional capacities”.
“Since Mr Morar’s death in 2022 the firm has been under new management. We are committed to upholding the highest standards of good governance, integrity, and pro-fessional conduct,” Pillay said.
She said the current directors and management “have no dealings with the PIC” on whose board Morar had sat in his personal capacity.
“The company is willing to assist the PIC or any other official authority with any historic information available to us that may assist their inquiry.”
She said the firm’s “new management” was in the process of taking transfer of Morar’s shares in the company.
“Morar Incorporated is a national accounting, consulting and auditing company employing hundreds of dedicated, professional staff. The company is committed to good governance, transparency and accordingly will assist all ongoing official enquiries,” Pillay said.