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Protector accused of threatening racing body

Bu­sisiwe Mkhwe­bane

Public protector Busisiwe Mkhwebane allegedly threatened SA’s largest horse-racing body with a far-reaching investigation into its operations after it refused to pay one of its main accusers a proposed R10m legal settlement.

Phumelela Gaming and Leisure Limited has said that a November 2018 letter Mkhwebane sent to it about its “regrettable” decision not to agree to a settlement proposal made by thoroughbred racehorse breeder Phindiwe Kema demonstrated that the public protector was biased against the company and failed to uphold the constitutional obligations of her office.

Kema has been involved in lengthy litigation since 2012 against Phumelela and the privatisation of the horse racing industry.

Part of her complaint to Mkhwebane included accusations that the transfer of Arlington racecourse in Port Elizabeth to Phumelela was dubious.

Mkhwebane has repeatedly faced accusations - and damaging findings - that she could reasonably be suspected of bias in her investigations.

She was found to have made harsh and unlawful recommendations about the mandate of the SA Reserve Bank without giving it the chance to respond, and without disclosing the “secret meetings” she had with the State Security Agency and the Zuma presidency.

Mkhwebane was also found to have failed to investigate properly the allegations of serious financial irregularities linked to the Estina dairy project. Kema’s complaints ranged from the 1997 privatisation of the horse-racing industry, the alleged creation of a horse-racing “monopoly” and Phumelela’s allegedly illegitimate ownership of the Arlington racecourse.

Kema had tried to buy the Arlington racecourse from Phumelela, but the deal never materialised because of disagreements about price.

Kema sought the R10m payout in relation to any future claim she would make in relation to the Arlington racecourse, and also “pain, suffering, public humiliation as well as to enable her to rebuild her life”.

In her final report, Mkhwebane said that only one complaint — about public funds intended for the development and construction of grooms’ quarters being misappropriated — had been substantiated. The gaming company says that her remedial action was a massive overreach of Mkhwebane’s powers, and it sent its

share price plummeting 74% to R2,95. Now it is taking her report on review.

Phumelela group CEO John Stuart condemned Kema’s allegations, saying that they are focused solely on her “self enrichment”.

Stuart says that Kema raised none of these pain and suffering claims in her complaint against Phumelela.

After Phumelela refused Kema’s offer, Mkhwebane sent a letter to the company’s lawyers, in which she stated that it was “regrettable” that Phumelela “was not amenable to a proposal” submitted by Kema for it to pay her a settlement of altogether R10m.

“As a result of the above, I will have to proceed with an investigation of a complaint and alleged prejudice suffered by Ms Phindiwe Kema,” she said.

Phumelela is now pushing for a personal costs order against Mkhwebane for 25% of the legal costs attached to its review of her May 2019 report on the privatisation of SA’s horse-racing industry, should she lose that case.

Mkhwebane’s office is adamant that she did no wrong, and it has rubbished any suggestion that the public protector was attempting to blackmail or coerce Phumelela into “paying off” Kema to make her complaints go away.

“The matter is before court, and the public protector will deal substantively with all the allegations contained in the Phumelela court papers in her replying affidavit,” her spokesperson, Oupa Segalwe, told Business Day.

“That said, the public protector denies claims that she asked Phumelela to pay Ms Kema any money, and confirms that settlement proposals were made among the parties, and that process failed.”