OUTA lays criminal charges against director in SAA financing deal

The Organisation Undoing Tax Abuse (OUTA) today laid criminal charges against Daniel Mahlangu of BnP Capital, the little-known boutique finance house that stood to gain R256m for arranging finance on behalf of SAA. And in a clear threat to SAA employees who were party to the alleged fraudulent financing scheme, OUTA says they had better come forward with information or they too may be charged.


Today the Organisation Undoing Tax Abuse (OUTA) laid charges against Mr Daniel Mahlangu of BnP Capital as part of its ongoing investigation and challenge of irregularities at SAA. OUTA recently exposed an unlawful deal between SAA and BnP Capital, a virtually unknown middleman, that stood to gain R256 million for securing a loan of R15 billion on behalf of SAA. After OUTA’s legal challenge, the SAA stopped the original transaction. However, the chairman of the SAA Board, Dudu Myeni, still wanted to forge ahead with paying BnP Capital a fee of R49, 9 million for “costs incurred.”

OUTA’s investigation not only exposed serious irregularities with SAA’s tender process, but also the fraudulent actions of BnP Capital’s sole director and shareholder, Daniel Mahlangu. Based on evidence uncovered during extensive investigations, OUTA decided to lay criminal charges against Mr Mahlangu. This was done today at the O.R. Tambo Airport.
 
“Laying criminal charges should send a clear message that companies who make themselves party to dubious transactions, can also be held accountable for being an instrument in the decay of government’s financial systems and the looting of taxpayers hard earned money, ” says Ivan Herselman, director of legal affairs at OUTA.
 
OUTA laid charges against Mahlangu on the following grounds:
 

• Failure to inform SAA that his company’s financial services board (FSB) licence had been suspended, despite knowing that this was part of the critical criteria for a successful tender.
• Having contact with a direct competitor prior to the bid and fraudulently failing to disclose this to SAA.
• Fraudulently misrepresenting that parties would serve on his project team when they had never even heard of BnP Capital.
• Fraudulently misrepresenting that there were parties on his team with aviation experience when the other party was in fact a luxury motor vehicle salesman, not part of Mahlangu’s team and also unaware of the existence of BnP Capital. 
• Fraudulently attempting to persuade SAA to pay a cancellation fee of R49, 9 million as a result of costs incurred by the international financier responsible for sourcing the funding when in fact the international financier had not incurred or invoiced for any such costs.
• Herselman says his team does not believe Mahlangu acted alone. “We know Mr Mahlangu was not the mastermind behind this shady deal, and hope that he will use this window of opportunity to reveal the truth about the true beneficiaries and the people behind this seemingly corrupt deal. Our evidence shows that this was an orchestrated attempt to defraud South African taxpayers of a large sum of money. We implore all those involved to come forward and tell the truth about the real beneficiaries of and masterminds behind this shady deal.”

 
OUTA warned that those within SAA who assisted in putting together the fraudulent transaction, are not off the hook. “Legal action against them will commence in due time. Our investigation into this is still continuing, but we already have solid evidence.”
 
Herselman said OUTA will keep a close eye on the criminal case against Mahlangu. “We are hopeful that the investigating officers and prosecuting authorities will do the right thing and convict Mahlangu of fraud.”