THE GAUTENG government has moved to cut ties with controversial facilities management company Bosasa as the Department of Correctional Services announced it will be terminating its more than R4.4 billion catering contract with the entity.
Yesterday, Gauteng Premier David Makhura admitted revelations at the Zondo inquiry into state capture had prompted him to institute an investigation into dealings between his government and the company.
“I have asked the ethics council to review any business that the provincial government has ever done with Bosasa and advise the executive council accordingly. The allegations coming out of the Zondo Commission of Inquiry are too serious to ignore,” Makhura said.
The Zondo Commission heard that Bosasa, now trading as African Global Operations, had historical links with former Gauteng premier Nomvula Mokonyane as far back as 2002, when she was MEC for safety and security.
Bosasa announced yesterday that it was entering voluntary liquidation after Absa and FNB decided to terminate the company’s bank accounts.
It was believed that the facilities company is involved in the provision of security at Life Recovery Centre in Randfontein, which treated drug addicts, among others.
Delivering his State of the Province Address, Makhura said the ethics council led by former auditor-general Terence Nombembe had advised his government in the past to deal with allegations of unethical business practices levelled against service providers.
Correctional Services Department spokesperson Singabakho Nxumalo said the department was already working on an alternative service provider for catering at prisons. The Bosasa contract was scheduled to run until January next year.
“The department is at an advanced stage in terms of developing an alternative food services plan,” said Nxumalo.
Bosasa’s departure would interrupt food provision to 46 434 inmates, which was 29% of the total inmate population.
The embattled company said in a statement that the liquidation would have a big effect on its 4 500 employees, “resulting in 25 000 people being impacted by the possible loss of employment”. The company said it had suffered reputational damage in the past few months, resulting in financial institutions terminating its bank accounts before month-end.
“The group is both factually and commercially solvent. Tragically, the group will be unable to trade without a bank account,” it said.
Acting ANC spokesperson Dakota Legoete said the management of Bosasa should still be held accountable for the acts of corruption that compromised the ordinary workers.
“Instead of them applying to liquidate the business, they should allow another business conglomerate to run that company rather than letting workers go home.
“(Angelo) Agrizzi and others still need to account for how they got business deals and how they conducted themselves within the business,” he said.
Legoete could not be drawn on whether the ANC would challenge the banks over closing the Bosasa accounts in the same way they did with the Guptas.
Cosatu spokesperson Sizwe Pamla called on the government to speedily freeze all of Bosasa’s assets and divide them among the workers, “who are the real victims of this situation”.
“These people are now going to sell their assets and likely some are going to be taken out of the country if the government does not act speedily.”
Pamla said Bosasa workers should be given alternative employment. “At least these workers have to be compensated using the assets of senior executives involved in this corruption.”
Pamla said government officials who were allegedly in cahoots with Bosasa in committing graft should also face the full might of the law.
By BALDWIN NDABA AND BONGANI HANS
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