Publication: Parliamentary Monitoring Group Issued: Date: 2002-05-08 Reporter:

Memorandum from Mandla Msomi; MP to F Mohamed - Parliamentary Ethics Committee Secretary

 

Publication 

Parliamentary Monitoring Group

Date

2002-05-08

Reporter

Shoshana Kordova, Sara Leibovich-Dar

Web Link

www.pmg.org.za

 

To      :       F Mohamed - Ethics Committee Secretary

From    :       Mandla Msomi; MP

Subject : ADDITIONAL INFORMATION ON DIFFERENCES IN DATES

1. Our telecon of today has reference.

2. You put a question to me to clarify a difference in dates; between the date of the invoicing of the vehicle in 1998 July 24, and the actual date of the close of the sale of the vehicle in 1998 December 15 and the date on which the HP agreement was signed with Wesbank in 1999 February 24.

'The invoice in my possession indicates that the Mercedes Benz E320 Vs was invoiced on the 24th July, 1998 (and does riot indicate to whom); and it reflects an amount of R220 000-00 excluding VAT under the column headed "Unit Price". Below that, it states that the price was calculated on the 13th August 1997. Further investigation revealed that this' vehicle was released and dispatched from the factory production line on the 14th August 1997 and reached the yard of Daimler Chrysler on the 13th September 1997. On the 15th September 1997 it was allocated to Fleet Management Division of Daimler Chrysler to be used by the staff of Daimler Chrysler Aerospace -

Almost a year later it was invoiced on the 24th July 1998 (and it is not clear to whom it was invoiced). Here an inference is made that it must have been invoiced to r MD Msomi since he became the ultimate buyer in December 1998. 'The apparent use of the vehicle (by Mr Msomi) from July to December 1998 must have constituted in undeclared benefit to Mr Msomi; and further that the difference between the price indicated on this invoice and the actual price paid by Wesbank will indicate a discount not declared in Parliament in terms of the rules f the code of ethics binding on all Parliamentarians

5. The information on this invoice shows the factory unit rice calculated on the 13th August 1997 by the manufacturer (Daimler Chrysler) to a sister company Daimler Chrysler Aerospace. I am informed that it is a company policy that the staff vehicles would be sold off as a used vehicle after a certain period has lapsed. There are many variations to calculate a price of a company vehicle. A normal depreciation and inventory price would be worked out based on the original price when the vehicle, was despatched from the factory production line.

6. The invoice in my possession shows the original factory Unit price. The price ultimately paid by Wesbank was the price calculated after the normal depreciation and inventory price had been worked out on a used vehicle over a period of one year that is August 1997 to July 1999, the condition of which has been described on the question and answer already submitted

7. I did not take possession of the vehicles until they were paid for by Wesbank in December 1998. There is no evidence supporting the above inference and therefore, there was no benefit accruing which would have cried out for investigation. There is nothing irregular about signing the HP agreement in February 1999 with Wesbank, as this does not constitute special benefit that should have been declared in terms of the Code of Ethics as a Member of Parliament.

Finally as I indicated to you and as per information supplied to you telephonically of the people I spoke to, Daimler Chrysler indicated that they have complied fully with the investigative teams in the past and all the information required was disclosed to the investigative teams. They are willing to co-operate further through their legal channels if required to do so provided that specific questions are directed to them in writing to consult with their legal council before furnishing us with answers if so required.


 

To      :       The Chairperson, Ethics Committee

From    :       Mr Msomi, MP

Dear Chairperson

I thank you for your consideration to have the time extended for me to respond adequately to the questions contained In your loner to me dated 19th February 2002.

As you will see In my response, most of the information required could only be supplied from elsewhere since I am not privy to the administrative and official information as requested by yourself The delay In answering your questions was therefore caused by circumstances beyond my control.

I have endeavoured to co-operate with your committee In the best way I know how, despite the fact that too much media speculative reporting has undermined the integrity of my responses us discussed With you prior to the Easter Holidays.

The complaints against me arise from the media allegations that I allegedly improperly acquired vehicles from a company involved in the Armament Procurement Deal at the ridiculously huge discount constituting a benefit to me personally that I did not declare to Parliament In terms of the Cod6 of Ethics, Alternatively that I had received a benefit which may have influenced my decisions as the Chairman of the Portfolio Committee for Public Enterprises.

Nothing could be further from the truth.

Detailed explanations have been given to the media to rebut these allegations. The truth is that I bought the two vehicles at market-related prices and accordingly received no benefit. The conditions of the vehicles as stated in my answers to your questions were in tact present; and I stated this time and again to the media, to the committee and to the IFP structures.

There is a contradiction in our democratic values where everyone is entitled to the presumption of innocence, but the media has unlimited right to tarnish your reputation beyond repair on the strength of irresponsible journalism. In fact the media has enough room to try you and Induce a verdict of guilt on you and ass public representative you have no recourse, because the damage to one's reputation can never be effectively repaired.

I urge your committee to consider a recommendation to Parliament to demand that those who have a responsibility to themselves, to the public and to the individual concerned are to prove on reasonable grounds mat a misdemeanour has In tact been committed refrain from speculative reporting which brings more harm to a public representative who is in the final analysis a person in his own right with social standing, family mends and economic value.

Up to now there is no evidence proving that I have breached any law or provision of the Code of Ethics. I have done everything possible to correct the media reports and rebut public accusations and had appeared before the Ethics Committee in my honest attempt to co-operate with your committee.

I therefore state that I am Innocent and that my purchase of the two vehicles was done in the normal course of events.

ANSWERS TO QUESTIONS FROM THE ETHICS COMMITTEE

QUESTION 1

Why was the vehicle LWD 3.9 Rodeo chassis number K35JNRTEO0G1O4 purchased through MM Worfel as indicated on the invoice? (Annexure 1).

ANSWER

I put this question to Daimler Chrysler and was informed that when the vehicles were ordered, the order was in the name of the departmental head of EADS, Mr Worfel. It is a normal procedure for Daimler Chrysler when supplying vehicles to staff members to invoice that particular head of the department (HOD) who in turn will assign the vehicle to any manager within the department in terms of their job title. When these vehicles are decommissioned, staff members remain the first title holder who will then pass the transfer to the second titleholder. The resale of these vehicles required a disclosure of the first title holder to enable the transfer of ownership to take place. The vehicle was purchased from Daimler Chrysler as the invoice indicates and the first holder of the title is displayed therein.

QUESTION 2

Did you receive any discount over and above a normal trade discount on the vehicle?

ANSWER

It is not clear to me as to what is meant by a "normal discount" What I do know, however, is that I have supplied the Ethics Committee with all relevant documentation as proof of purchase of pre-owned vehicles purchased, on the basis that they were used vehicles around one year old, having more than 30 000 kms on the clock, being in not perfect, even poor condition. I enclosed a technical report to your committee supplied by the service department to prove that one of the vehicles required extensive engine and electronic overhaul after purchase. The Colt Rodeo 3L clocked 32 000 kms at the time of purchase and the Mercedes Benz E320 clocked 39 000 kms at the time of purchase.

Therefore the question of discount did not arise during the sale's negotiations as the price was dictated by the condition, age and kilometres travelled as pre-owned vehicles.

QUESTION 3

Did you receive any preferential discount because you are an MP or because of your role as Chairperson of Portfolio Committee on Public Enterprises?

ANSWER

Clearly the answer is no, it was no secret to anyone that I, as a buyer, was employed at the time as Member of Parliament. This knowledge however, I never used or advanced as a determining factor in the sale and purchase of these vehicles.

The bank became involved immediately after the vehicles were identified to satisfy themselves that the product matched the price, as they were used vehicles.

The Chairmanship of the Portfolio Committee was never a criterion to determine the eligibility or otherwise to purchase these vehicles and I never used this status to influence any decision to sell those vehicles to me. In any event, there is no evidence to support such false speculation. It was solely a bank's objective business decision whether or not I was a good risk for them to extend a loan to me to buy the vehicle.

QUESTION 4

Who was paid for the vehicle?

ANSWER

The seller was Daimler Chrysler and the bank paid them as per invoice supplied to them.

QUESTION 5

The media have indicated that you corresponded directly with Mr Worfel regarding the service of the motor vehicle. If this is why did you not deal directly with the dealer? Please submit any correspondence in this regard to the Committee.

ANSWER

The media speculation is based on a letter in the possession of the media leaked to them anonymously to falsely create the wrong impression that I demanded favours. I will endeavour to find copy of that letter for the ease of reference by the Committee.

The truth is that the dealership network i.e. Macintosh Pinetown and NMI Durban checked the mechanical and electronic condition of the vehicles and established that extensive repair work was necessary on these vehicles.

The question that arose was whether these defects were to be paid for by the previous owner of title or whether there was any warranty extended with the vehicles as part of the resale agreement. This enquiry was processed electronically by the dealership network. Daimler Chrysler Technical Division, in response to this enquiry asked the previous owner of title the terms and conditions for the resale of the vehicle, to which Mr Worfel wrote to me to advise that the vehicles were sold 'voetstoets'; and as they were awaiting his response at the workshop of the dealership network he had to advise me and them that repairs were for my account and if I negotiated any motor plan with Daimler Chrysler it was a matter between me and Daimler Chrysler -

Mr Worfel stated clearly that when vehicles were decommissioned there were no extras. After that correspondence the matter was closed and the dealership network never pursued the matter further.

QUESTION 6

With regard to the purchase of the Auto Elegant V6 Chassis number 2100656A433302, can you please explain why the car was invoiced in 1998 and the price calculated in 1997? (See annexure 3).

ANSWER

As far as I could ascertain the position was as follows.

This is a pre-owned vehicle purchased by a company associated with Daimler Chrysler at a price calculated on the day of delivery i.e. 1997. In 1998 it was sold at a price dictated by the condition stated above as a second-hand vehicle. It would appear that the selling price at the time of purchase was based on the price at the time of delivery reduced by the condition of the vehicle as stated above in 1998. I am not able to interpret the detailed information not disclosed in the invoice since I am not privy to administrative and other company procedures used to capture information into their database to evaluate the information on the invoice.

QUESTION 7

The workshop enquiry report states that the Pretoria fleet sold the car on the 15 September 1997 (see annexure 4). Can you explain why the car was invoiced on 25 July 1998?

ANSWER

I am not privy to any information to the paper trail as to when and to whom they sell their vehicles within Daimler Chrysler and neither am I aware of the movement of vehicles within the company. All I know is that the vehicle in question was decommissioned sometime before I bought it as a second hand vehicle. I do not have access to their database that will indicate the movement of vehicles.

QUESTION 8

Can you provide the Committee with the motor vehicle registration papers and the transfer of ownership papers of both motor vehicles?

ANSWER

In the normal cause of events this paper work will be finalised between the seller, the financier and the local registration authorities. Wesbank signed agreements are enclosed as requested and they remain the owners of second title until they are fully paid in terms of the HP agreement.

QUESTION 9

Can you also provide the Committee with the copies of your motor vehicle HP agreements if motor vehicles were paid by other means, please furnish the Committee with the appropriate documentation?

ANSWER

This information is supplied with the rest of the information requested under question 8.

QUESTION 10

Can you please indicate what year the vehicles were manufactured?

ANSWER

Mercedes Benz E320 year of manufacture 1996. Colt Rodeo year of manufacture 1997.

QUESTION 11

Can you indicate what the kilometres of both cars were on the date of purchase and the condition of both vehicles?

ANSWER

All this information is available on the answer to question 2 and subsequently thereafter. In addition to my answer, I may add that both vehicles were in a reasonably clean condition except that the Colt Rodeo tyres were worn out, aircon needed attention, the motor of the window on the driver's side was not working and it had dents on the rear fender, the canopy was lose and the lock was not working. The vehicle had a high petrol consumption which needed urgent attention. In the case of the Mercedes Benz E320 engine and electrical components needed overhaul. Tyres were a bit worn out, aircon needed attention and it showed signs of an oil leak.

With acknowledgements to Mandla Msomi, F Mohamed and www.pmg.org.za.