Investec closes accounts linked to South Africa's political elite

Source: Investec.

Before closing the account, Investec questioned Aventro about R85m received from Qatar intended to promote goodwill for a future Qatari project in South Africa.

The funds received by Aventro were to be distributed – at Aventro’s discretion – to entrepreneurs in South Africa, to the ANC in the form of donations and R10m to Aventro itself as a fee for this service.

Aventro, owned by Mashatile’s associates Tebogo Nkosi and Johanna Madibeng, is a black-owned investment company in South Africa, focused on sectors like renewable energy, mining, property, and agriculture.

The company has been instrumental in projects like the Redstone Concentrated Solar Power (CSP) plant in the Northern Cape, which is part of the country’s Renewable Energy Independent Power Producer Procurement Programme. Aventro actively participates as a local shareholder and partner in the project, which is set to enhance South Africa's renewable energy capacity.

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In 2017, Tebogo Nkosi and Johanna Madibeng joined Paul Mashatile on a Middle East funding trip while he was ANC treasurer-general. Shortly after, Qatar reportedly transferred R85m into Aventro's account.

City Press obtained a letter from Investec addressed to Nkosi, the company’s chief executive officer, which raised questions regarding the transaction, following what appeared to have been an initial engagement with Investec on Monday, 15 July 2019. "To date, an amount of R85,839,200 has been received from the Qatari government and Aventro expects further funding," the letter states.

The bank stated it was obligated to question the funds under Fica regulations "to help counter money laundering and terrorist financing".

"Investec takes a risk-based approach to assess each and every client, including establishing the source/s of a client’s wealth, as well as the source of the funds which the client expects to use in concluding a transaction, or transactions, in the course of the business relationship,” it stated.

The bank added that it regularly reviewed client relationships to assess reputational and business risks, especially for those facing adverse public allegations, ensuring transparency of account activity.

Investec's inquiries rise

Investec requested documents from Nkosi, including the Qatari government’s appointment letter and clarification about the R10m fee. It also questioned why Aventro directors, like Sithole and late Johannesburg mayor Mpho Moerane, were also directors of the entrepreneurial firms receiving Qatari funds.

The letter inquired whether Aventro directors had made any conflict of interest declarations related to the Qatari funds. It also asked if there was awareness of any other directorships held by Aventro directors in entities benefiting from these funds.

Furthermore, Investec questioned Aventro’s intent to purchase a former Rebosis-owned building and noted the average market rental for similar office space was R95 per square metre, which it remarked was considerably above the market-related rental. This, as Aventro sought an extended lease for the public works building.

Rebosis Property Fund is a South African real estate investment trust (Reit) founded by Sisa Ngebulana in 2010. The company primarily focuses on owning and managing retail and office properties, with its portfolio concentrated in Gauteng and the Eastern Cape.

Investec also raised concerns about the allocation of funds from Qatar for property investments, noting that the letter of mandate did not authorise such investments.

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The letter went on to say that Aventro received a R600,000 payment from the ANC Greater Johannesburg Region in September 2008, which was reportedly a loan repayment. In May 2019, Aventro paid R2m to the same beneficiary. The inquiry seeks clarification on the loan's timeline and the payment's nature, as well as potential undisclosed stakeholders influencing Aventro's operations​.

In a subsequent letter dated Tuesday, 15 October 2019, Investec informed that the purpose was to communicate, following discussions on Friday, 11 October 2019, its decision to close all accounts. It stated this decision was due to various transactions being outside Investec’s risk appetite, while clarifying that no wrongdoing by Aventro or any third party was alleged.

Denials and complaints

Nkosi strongly denied the allegations and emphasised the serious adverse consequences that could arise from any publication repeating such defamatory statements about Aventro and herself.

She claimed that City Press aimed to link Mashatile and others in what could be described as a questionable partnership involved in dubious activities. She also mentioned that both she and a fellow director of Aventro had submitted a complaint to the Press Ombud regarding defamatory articles published by News24.

The public advocate rejected Aventro's complaint against News24 due to Aventro's failure to meet the filing deadline.

Nkosi suggested that City Press's article could be part of News24’s ongoing campaign to tarnish the reputations of herself and the deputy president. She indicated they would not respond to the inquiries at this time, having referred them to legal representatives.

She deemed the timeframe given by News24 for a response to be too short. She also warned that they would pursue legal remedies if any defamatory articles were published.

Mashatile's spokesperson did not reply to requests.

Meanwhile, Investec informed City Press that, due to client confidentiality, it could not disclose specific details about its client relationships.

It stated that Investec continuously evaluates these relationships as part of its ordinary business operations and in accordance with regulatory obligations.