Tshwane Deputy Mayor Modise found to be 'unethically benefitting' from service provider

A forensic investigation report found Eugene Modise, Tshwane deputy mayor and MMC for Finance, was unethically benefiting from a company that’s currently doing business with the municipality.

Modise derived rental income from a property he owns and leases to Triotic Protection Services, a company that he previously owned, which holds a multi-million rand security contract with the municipality.

The report, conducted by Ncube Incorporated law firm, also found Modise committed several breaches of the Councillor's Code of Conduct by not declaring all his financial interests, as required of all councillors.

The confidential report, which was tabled before an in-committee council meeting on Thursday, recommended disciplinary action be taken against the African National Congress (ANC) councillor.

However, council voted to establish a special committee to consider the findings of the report and make a recommendation to the Gauteng MEC for Cooperative Governance and Traditional Affairs (COGTA).

This move has been described as a delay tactic by some opposition councillors, with the current political term ending in November next year.

SECURITY TENDER: TMPD 02-2016/2017

In 2016, the Tshwane Municipality advertised a tender seeking companies to provide security services for some of its properties, assets and personnel.

According to the report, the city’s Bid Evaluation Committee received 272 bids with only 22 of those being forwarded to the Executive Adjudication Committee (EAC).

On 14 March 2017, the EAC cancelled the tender after finding several "irregularities" in the process.

One of the highlighted irregularities was the unauthorised transportation of the bid documents from the supply chain management offices to another building.

"In addition, the arrangements for transporting the bid documents were done in metro vehicles not knowing whether the documents were transported in sealed boxes or containers or who whether those who delivered them had sight of the documents during this transporting stage," one of the annexures to the report read.

As a result, the tender was cancelled. However, three of the 22 bidders took the municipality to court and successfully got it reinstated.

After years of litigation, by 2022, the BEC eventually resolved to award the R300 million security tender to the 22 companies whose names were initially forwarded.

One of the companies was Triotic Protection Services.

TRIOTIC PROTECTION SERVICES AND THE MODISE LINK

Triotic Protection Services was registered as a close corporation in December 2003, according to data from the CIPC (Companies and Intellectual Property Commission).

Its company profile stated it offered security and cleaning services.

As a CC it had four directors, including Modise. In 2010, it changed to a private corporation with now only three directors, including Modise.

A year after Triotic was awarded the security tender along with 21 other companies, Modise resigned as its director in February 2023 and weeks later, he was revealed as a PR councillor for the ANC in Tshwane.

During his interview with the investigators, Modise told them it was important for both political and ethical reasons that he officially distanced himself from Triotic.

"He immediately resigned from Triotic when he became a councillor as he did not want to be the point of focus and further to put his party into disrepute. It is an open secret that the reputation as well as the image of the ANC is under scrutiny and it has been undermined even if they were doing good things,"the report read.

In his declaration form for the 2022/23 financial year, Modise listed Triotic as a company he had shares in.

However, in the following two financial years, Modise did not mention Triotic any longer.

Modise told the investigators he sold Triotic to his business partner and they agreed she would pay him on an instalment basis.

However, the report said the investigators reached out numerous times to the business partner and she did not respond.

More concerningly, the investigators noted Modise failed to provide any documentary evidence of the sale.

"Modise has not furnished the investigation team with documentary proof of the sale of Triotic such as a written sale agreement. We were therefore unable to verify the contents, terms, or commercial basis of the alleged transaction at the time of finalising this report,"the report read.

MODISE'S BREACH OF COUNCILLOR'S CODE OF CONDUCT

Due to Modise selling Triotic on an instalment basis, the report said he was still deriving benefit from a company doing business with the municipality.

This was listed as Modise’s first breach on the disclosure obligations set out under the Councillor's Code of Conduct.

In his declaration form, Modise listed seven properties he owned.

One of the properties Modise disclosed was located in Dumbarton Road, Pretoria.

Modise told the investigators he leased the property to Triotic and derived a rental income from it. This was not disclosed in Modise’s declarations.

The investigators said in an interview with Modise, he told them that he did not disclose this because he was not directly benefiting from Triotic but rather from his property.

However, investigators did not buy his reasoning.

"These two financial interests, namely, the instalment payments and the rental income, amount to continuing and material financial links to Triotic, which remained an active service provider to the City. However, neither of these interests was disclosed (by Modise)," the report read.

The report said Modise also failed to disclose at least four other properties he owned.

The report also raised concern over the municipality’s vetting processes, noting Modise’s declaration forms were not signed by the city manager.

"As a senior office bearer occupying the positions of Deputy Executive Mayor and MMC for Finance, Mr. Modise was subject to an elevated duty of integrity, transparency and compliance with all governance frameworks applicable to councillors. His failure to disclose financial interests linked to Triotic whether by way of rental income or ongoing instalment payments represented a material breach of statutory and ethical obligations," the report read.

ALLEGATIONS MODISE BENEFITED DIRECTLY FROM TRIOTIC TENDER

The complainant in this case was listed as Jacqui Uys, a senior leader in the DA Tshwane caucus and former MMC for Finance in Tshwane.

In her interview with the investigators, Uys alleged Modise used money the city paid to Triotic to settle his municipal bills.

According to the report, the municipality had made two payments to Triotic, totalling about R10 million.

The investigators examined the dates of the payments made by the municipality to Triotic against Modise’s properties.

On 22 July 2024, the municipality paid Triotic R3.3 million.

On the same day, according to the report, Modise paid rates and taxes for five of his properties in Tshwane, totalling R714,000.

Modise told the investigators he had resigned from Triotic at the time and he was not privy to its financials, adding that it was unlikely the money would have reflected on the same day.

The investigators agreed with him.

"While these transactions coincide in time, we could not establish a direct financial link between the two. Mr. Modise stated that the payments originated from income derived from his other business ventures and no evidence to the contrary was established," the report read.

The second payment made by the municipality to Triotic was on 24 July 2024, totalling R6.5 million.

WHAT HAPPENS NEXT?

The forensic investigation report made a number of recommendations, including disciplinary proceedings against Modise.

It also recommended stronger procedural structures from the municipality and workshops for councillors on financial interest disclosures.

On Thursday, the Tshwane council met to consider the report. Mncedi Ndzwanana, Council Speaker, ruled the deliberations must take place behind doors.

However, in documents seen by EWN, the recommendation of "disciplinary proceedings" was not considered.

Instead, councillors were only required to take note of the report and for feedback to be given to the COGTA MEC (Jacob Mamabolo).

One councillor who was present in the closed-door meeting told EWN this action, "constituted less than a slap on the wrist for Modise".

In multiple interviews conducted with councillors present at Thursday’s council meeting, EWN understands the DA proposed an amendment for Modise to be expelled as a councillor; however, this did not get enough support.

The governing coalition, spearheaded by the ANC, ActionSA and EFF, sponsored an amendment to establish a special ad-hoc committee which would consider the forensic report and make a recommendation to the Cogta MEC on the next steps.

In the meantime, the DA in Tshwane released a media statement, saying it intends on opening fraud charges against Modise.

"Modise’s misrepresentation in failing to declare his interest in Triotic and the prejudice suffered by the City by the irregular extension of the Triotic contract justifies a criminal charge of fraud against Modise," said Uys.

In the meantime, the ANC Greater Tshwane region is set to hold its elective conference this weekend where Modise is expected to run to retain his position of chairperson.

*EWN has contacted Modise for comment and his response will be added here once its received.