- In December 2023, PetroSA selected Equator Holdings – owned by controversial businessman Lawrence Mulaudzi – to fund and refurbish its offshore gas infrastructure, a deal potentially worth R21.6 billion.
- It has since emerged that Equator Holdings (Pty) Ltd was also trading as Tshakhuma Tsha Madzivhandila (TTM) Football Club in Limpopo. And in March, Equator was liquidated for failing to pay one of TTM’s soccer players.
- Documents suggest PetroSA was unaware of Equator’s liquidation and kept pursuing the multibillion-rand deal, raising questions about PetroSA’s due diligence on a deal that had already raised eyebrows.
- For more financial news, go to the News24 Business front page.
In December 2023, PetroSA entrusted a potential R21.6-billion gas infrastructure deal to notorious wheeler-dealer Lawrence Mulaudzi.
Three months later the deal was dead, killed not by environmental groups or Russian sanctions, but by 34-year-old soccer player Cheslyn Chase Jampies.
Last year, Jampies asked the Johannesburg High Court to liquidate Tshakhuma Tsha Madzivhandila Football Club (TTM), after the club failed to pay his R35 000-a-month salary.
With time and interest, Jampies’ claim against the club rose from R70 000 to R725 000.
TTM, which is owned by Mulaudzi, failed to oppose the case. And on 7 March this year, the court ordered that TTM be placed in final liquidation.
Records from the National Soccer League, filed in Jampies’ case, show that Tshakhuma Tsha Madzivhandila Football Club (Pty) Ltd is NOT the legal entity behind the club. Instead, Mulaudzi registered the club in the name of his investment company, Equator Holdings (Pty) Ltd.
This is where PetroSA and the R21.6-billion gas deal come in.
Gas baron
In January 2023, Equator bid for the R3.7-billion contract to refurbish PetroSA’s gas-to-liquids refinery in Mossel Bay (RFP 0001/2023). That deal went to Russia’s Gazprombank Africa. But Equator bid for and won an even bigger contract: RFP 0004/2023 to finance and refurbish PetroSA’s offshore gas infrastructure, at a potential cost of R21.6 billion.
A joint venture between Equator and another company, Theza Oil and Gas, was also appointed to develop PetroSA’s offshore gas wells.
The two deals meant Mulaudzi was poised to become one of the most significant players in the gas industry, with control over offshore gas wells and the infrastructure to bring the gas onshore.
In our original investigation, we pointed out that Equator had been eliminated from the Gazprombank tender – scoring 0 out of 100 – because the “[a]uthenticity of entity could not be established”, making the decision to hand it two other deals highly suspect.
READ | PetroSA taps notorious political operator for massive offshore gas deal
In January this year, Mulaudzi told us: “We are … pleased as a company to enter into this partnership with PetroSA which will provide security of gas supply and unlock infrastructure bottlenecks in the energy space for South African economy… We have every intention to deliver, and we will!”
What was not apparent at the time was that PetroSA had just awarded two multibillion rand gas infrastructure deals to a soccer club that now plays in the third division Motsepe League.
No assets worth mentioning
In terms of the Gas Financing and Infrastructure agreement, signed with PetroSA in December, Mulaudzi’s Equator Holdings would have until 8 June 2024 to show that it could secure a funding commitment for the refurbishment project, estimated by PetroSA to require R21.6 billion.
Unbeknownst to PetroSA, however, Equator Holdings could not even come up with R725 000 to pay Jampies.
“If you can’t properly run a football club that’s worth about a few million, how are you going to juggle R21.6 billion?” the former Bafana Bafana player told us in a recent interview.
Back in 2020, TTM had bought the Premier League status of Bidvest Wits for a rumoured fee of R35 million, but two years later, the club was struggling.
“The first month came, our monies were short. Obviously, me as the club captain I stand as the mouthpiece between the management and the players,” Jampies told us. “When we go and ask, ‘Hey, what do we tell the boys?’ Because we are the senior players, they come to us to help them financially… so we needed answers and we never got that. We were brushed off many times, we were told, ‘just hang on’.”
Meanwhile, Mulaudzi, the club’s owner and chair, continued spending lavishly. Jampies recalled how a member of the club’s management team came in one morning “reeking of alcohol and he has the audacity to tell us, the chairman was at a funeral [this] weekend and spent R200 000 on alcohol”.
In October 2022, TTM stopped paying Jampies altogether.
“Every piece of furniture I’ve accumulated over the past 14 years, I had to sell one by one because I didn’t have an income… I was being ignored, I was being lied to … the chairman wasn’t taking my calls, he just rubs it off,” he told us.
He added:
I lost my cars, I lost my furniture, I lost my bed, I lost my TV, my microwave, every fork, spoon and knife I had to sell.
In January 2023, just as Mulaudzi was gearing up to bid for PetroSA’s multibillion rand gas deals, Jampies filed a case with the Dispute Resolution Chamber of the National Soccer League, which governs all the leagues in the country.
“The reason I pursued this is because football is all I know,” he told us. “I cry, I bleed, I talk football, that is my life… And I cannot sit back and allow some incompetent people that doesn’t have any remorse… to just take it from me in the space of four months. I cannot do that.”
In June 2023, the National Soccer League ordered TTM to pay Jampies his outstanding salary plus damages.
The ruling, authored by advocate Fana Nalane, SC, is damning. Amongst other things, he raised doubts about the authenticity of a mutual separation agreement that TTM produced as evidence. Jampies had previously refused to sign such an agreement and denied that it was his signature on the document.
The panel agreed, ruling that TTM had “failed … to prove the authenticity” of the document and instructed the team to pay Jampies R725 000.
When TTM failed to pay, Jampies’ lawyers asked the National Soccer League for a copy of the club’s legal membership form, which showed that the club was registered to Equator Holdings trading as Tshakhuma Tsha Madzivhandila Football Club.
With this in hand, they asked the Johannesburg High Court to liquidate Equator Holdings.
In his affidavit, Jampies told the court: “[Equator’s] non-payment of the amount due to me provides confirmation of [Equator’s] distressed financial position … I hold no security for my claim and its apparent that [Equator] does not possess any assets worth mentioning.”
The Johannesburg High Court agreed, and ordered that Equator be wound up by a liquidator. Ewan Simmonds, one of the lawyers now representing the liquidated company, told us: “In terms of the liquidation process, the order is not provisional, but is final and no one has filed any appeal against it. To date we have not received a response from the director, Mr Lawrence Mulaudzi.”
AmaBhungane also had no luck reaching Equator. Calls, emails and WhatsApps to Mulaudzi and one of the other directors went unanswered.
Clueless
Embarrassingly, it appears that PetroSA was in the dark about Equator’s liquidation.
In terms of the agreement, Equator had 180 days – until June this year – to “deliver satisfactory evidence to PetroSA that it has secured the financing for the refurbishment project”.
“In line with our internal policies, satisfactory evidence includes proof that funds have been secured and are immediately available, without any conditions, from a reputable financier/bank or partner,” PetroSA told Mulaudzi.
Despite Equator’s liquidation, Mulaudzi appears to have written to PetroSA confirming that Equator had secured R1 billion in funding from Black Mountain Investment Management, a little-known asset management company.
However, in a letter dated 19 June 2024 – a copy of which we have seen – PetroSA told Mulaudzi that this was not good enough and noted that “the letter appears to be a mere expression of interest to provide funds, which falls short of the evidence required under the agreement. There is no evidence of the financial capacity of [Black Mountain] from a reputable bank or financier or a credit-approved/binding term sheet.”
Although the original tender documents estimated that US$1.2 billion would be needed for the refurbishment project, it appears that PetroSA was willing to settle for R1.2 billion plus contingencies. Black Mountain’s unconfirmed offer of R1 billion “falls short of the amount required”, PetroSA said.
PetroSA also raised concerns about the technical partner Equator had secured: Khewija Engineering & Construction, based in Fourways.
Until 2016, Khewija operated under the name Kellogg Brown & Root South Africa. Kellogg Brown & Root is a controversial US defence and construction firm; its employees have been implicated in everything from sexual assault to human trafficking, while the firm has been accused of exposing US soldiers to asbestos-contaminated “burn pits” in Iraq and Afghanistan.
In 2015, the local division of Kellogg Brown & Root was bought out and the company changed its name to Khewija. In its 19 June letter, PetroSA asked Equator to provide “CVs of the key personnel” as well as “evidence of Khewija’s track record of project execution in similar environment from 2015 (since management buyout) to date”.
According to PetroSA’s letter, Equator signed an agreement with Khewija to execute PetroSA’s offshore gas infrastructure project. Despite this, online company records show that Khewija was placed in final liquidation three weeks later. Phone calls to its office went unanswered and emails bounced back.
Last week, we asked PetroSA if the deal with Equator Holdings was still going ahead.
If the deal had been cancelled, we asked, when was it cancelled and why. And if the deal was still on, had Equator been able to come up with the money.
In a formal letter, PetroSA responded to our questions by saying “No comment”, “No comment” and “No comment”.
In follow-up questions we asked about the 19 June letter and pointed out that it appeared that PetroSA had awarded a critical gas infrastructure deal, potentially worth R21.6 billion, to a soccer team.
The response:
PetroSA cannot comment on [this] enquiry.
Developing the offshore gas industry is key to minister Gwede Mantashe’s plan to make the Eastern Cape the “gas capital” of the country.
The plan is not going well: TotalEnergies has hinted at plans to walk away from its long-held interest in the offshore gas block 11B/12B, and Gazprombank is yet to make good on its promise to provide the funding necessary to restart PetroSA’s gas-to-liquids refinery.
Last week Mantashe turned to the well-worn trope of blaming civil society for the gas industry’s woes, telling Parliament that it was imperative to “challenge the foreign-funded NGOs that oppose every initiative to explore oil and gas,” which he said “deject investments in this sector”.
