The backstory — Lucky Montana’s tax woes and the R4.5bn Prasa State Capture scandal

The names Mario Ferreira and Riaan van der Walt were absent from news reports on recent ructions involving the South African Revenue Service (SARS) and Lucky Montana, the disgraced former CEO of the state-owned Passenger Rail Agency (Prasa).

While SARS passingly refers to Van der Walt in its court filings and related correspondence with Montana, the tax collector’s paper trail makes no mention of Ferreira.

However, to understand not only Montana’s tax troubles but also his alleged State Capture crimes, one has to factor in the nexus that binds Montana, Van der Walt and Ferreira to Prasa’s dodgy R4.5-billion contracts for security upgrades at train stations across South Africa.

First, let us briefly unpack SARS’ eye-popping R55-million tax claim against Montana.

The receiver audited Montana’s financial affairs for the 2009-2019 tax period. The period includes Montana’s stint as Prasa CEO, which ran from 2009 to 2015. His reign at the rail operator ended after this journalist exposed the infamous R3.5-billion Swifambo “tall trains” scandal. Many of the financial dealings that form part of SARS’ latest assessment transpired while Montana was in charge of Prasa.

From SARS’ audit findings, it is clear that the revenue collector is after Montana for the following reasons:

• Montana received “undeclared non-employment related deposits” in his various bank accounts amounting to R13.39-million. In other words, unknown, third-party persons or entities channelled millions of rands into the then Prasa CEO’s accounts. These payments may have constituted alleged kickbacks stemming from Prasa contracts. Given its mandate and core focus, SARS isn’t really concerned with the possible criminal implications of such payments. Or, to be clearer still: SARS would have an interest in the possible criminal implications of undeclared taxable income, but not in those triggered by alleged bribery, money-laundering and related forms of alleged criminal misconduct. The latter crimes are policed in accordance with the Prevention of Organised Crime Act and the Prevention and Combatting of Corrupt Activities Act.
• A third-party benefactor or benefactors contributed nearly R10-million towards deposits, instalments and settlement payments for a range of luxury vehicles Montana owned or drove during the period in question. The SARS investigators couldn’t find a single payment for these cars from Montana’s own bank accounts. The revenue service views these payments as undeclared income, so, naturally, there is a tax implication. Again, though, there would also be criminal implications if any of these transactions are found to have sprouted from Prasa contracts.
• Finally, there is the matter of Montana’s contentious property dealings. SARS argues that Montana owes outstanding capital gains tax from the sale of some of these fixed assets, while there are also outstanding tax obligations triggered by yet more money that benefited Montana via payments from third parties towards his property purchases. It is in relation to this leg of SARS’ audit that we can with great certainty highlight material financial links between Montana, Ferreira and Van der Walt, the latter two figures being core characters in Prasa’s dodgy R4.5-billion contracts for security upgrades.

Siyangena Technologies, Zuma buddy Roy Moodley, Pretoria businessman Mario Ferreira and his dodgy lawyer 

Back in 2009, South Africa was in full-on preparation mode for the following year’s Fifa World Cup.

Prasa too was tasked with getting its house in order, as it was due to experience larger volumes of rail commuters for the duration of the tournament. It is a blight on the rail operator’s legacy that it commenced with these preparations far too late. Some of the key refurbishments at train stations were only attended to long after the tournament had wrapped up, while others were never concluded.

For one major Prasa contractor, however, none of this really mattered. The World Cup preparations opened the door to massively lucrative contracts.

Enter Siyangena Technologies and Mario Ferreira.

Ferreira is the founder, CEO and main shareholder of TMM Holdings. Among TMM’s subsidiaries is a company called Siyangena Technologies.

In 2009, Prasa appointed Siyangena to perform security-related upgrades at the Nasrec and Doornfontein stations.

Soon after that, Prasa began allocating staggering portions of its budget for more work that it assigned to Siyangena. In the 2010/2011 financial year, Siyangena clinched a contract to upgrade security infrastructure at 62 train stations across South Africa, valued at R1.95-billion.

By 2014, Siyangena had been given contracts to do upgrades at a further 151 stations, with a price tag of R2.5-billion. In other words, Siyangena had clinched Prasa contracts worth some R4.5-billion, all triggered by an initial contract to work on only two Prasa stations.

Siyangena’s Prasa windfall and the manner in which it clinched these contracts have come under fire on various platforms. A high court ruling has found that the company and Prasa’s management were complicit in corruption, impropriety and maladministration.

Perhaps the biggest indicator that the Siyangena contracts were marred by State Capture came in the form of revelations involving contentious Durban businessman Roy Moodley, known for his close links to the then President, Jacob Zuma. This journalist in 2016 revealed that Siyangena, after clinching the Prasa deals, passed on an eye-watering R550-million to two of Moodley’s entities. What Moodley or his entities did with that money is a riddle that still needs solving.

Van der Walt and the Parkwood pad

What is beyond doubt, however, is that Montana benefited from highly suspicious transactions that can all be traced back to Siyangena.

These dealings relate to Montana’s assets splurge during the time that he served as Prasa’s CEO. Some of these properties now feature in SARS’ latest inquiries into his affairs.

In 2015, this journalist revealed that Montana had sold a house in Parkwood, Johannesburg, for an exorbitant price.

This is where Riaan van der Walt enters the picture. Using a shelf company called Precise Trade and Invest, Van der Walt bought Montana’s house for double its market value. What’s more, all indications were that this was no arms-length property deal. My investigations showed that Van der Walt was closely associated with Ferreira, the effective owner of Siyangena Technologies.

If the optics at the time looked bad, evidence later obtained by the Zondo Commission’s investigators showed that the deal indeed constituted alleged malfeasance. To buy Montana’s Parkwood property, Van der Walt’s shelf company used funds that could be directly traced back to none other than Siyangena’s holding company, Ferreira’s TMM Holdings. The affected parties have all strongly denied impropriety, but any reasonable person would suspect that the property was a clever scheme to divert an alleged kickback from Siyangena into Montana’s pocket.

The Zondo Commission harboured this very suspicion and recommended that the Parkwood transactions and related property dealings involving the trio be subjected to criminal investigations.

The Hurlingham mansion

Montana’s heftiest property acquisition was in March 2015, just as Siyangena Technologies was raking in hundreds of millions of rands in payments from Prasa.

The Prasa CEO bought a palatial property in Hurlingham in Johannesburg for the sum of R13.5-million. My investigations revealed that Montana didn’t have to fork out a cent of his own money to take ownership of this impressive real estate.

Van der Walt, Ferreira’s lawyer friend, again played a key role. His shelf company, Precise Trade and Invest, channelled R2-million to the transfer attorneys. The Zondo Commission heard evidence that Van der Walt had again made use of funds that could be traced back to Ferreira’s TMM Holdings.

The biggest chunk of the funds to buy the property came from an entity called Midtownbrace.

My investigations, based on reams of documents and source accounts and later backed up by the Zondo Commission’s forensic experts, showed that Midtownbrace had used funds that emanated from another Ferreira entity, Triple Trade and Invest. Again, the Hurlingham transaction had all the makings of a scheme devised to launder funds from Ferreira or his entities to the then Prasa boss.

Van der Walt, meanwhile, has since skipped the country and, according to my sources, now lives in Texas in the US.

It is not too late for the relevant authorities to extradite him so that he can answer for his role in one of South Africa’s foremost State Capture scandals.

Montana, now a member of Parliament, should also be held accountable for his alleged crimes, as should Ferreira.

There are reams of court filings, Zondo Commission testimony and related material that all point to one thing: the Siyangena contracts were mired in alleged corruption. They also brought about highly inflated prices for security infrastructure like CCTV systems and access gates that, in many instances, were poorly installed or didn’t function properly.

The wheels of justice may very well turn as slowly as those of an ageing locomotive, but it is high time that the Hawks and the NPA bring to book the likes of Montana, Ferreira and Van der Walt. DM