Gangster State

functions of the Free State Investment and Promotion Agency after the
latter was closed. The loans were made to funeral parlours, a pharmacy
and a car dealership, among other businesses, and Magashule
apparently approved the transactions himself.^14
Lekota appointed Peter Goldhawk, a chartered accountant who had
helped establish accounting giant PricewaterhouseCoopers’ forensic
unit, to probe the allegations. The Goldhawk report was released
towards the end of 1996 , and it made some scathing findings. The
FDC had made ‘irregular’ loans totalling about R 3 million without
following proper procedure, the report found.^15 Goldhawk could not
find any evidence that Magashule or anyone close to him had benefited
from the loans, but he did conclude that the former MEC had
unlawfully interfered in the decision-making processes of the FDC
board.^16
In August 1996 , the Mail & Guardian reported that police were
investigating some of the allegations around the Department of
Economic Affairs and Tourism. Magashule’s alleged ‘fraud’ formed
part of their probe.^17
Kganare and a former member of Magashule’s camp said there was
much more going on at Magashule’s department than what came out in
the media at the time. ‘When Ace was MEC, he awarded a tender for
cleaning services to a company that would have massively overcharged
government,’ Kganare claimed. ‘We’re talking about paying R 200 for a
one-kilogram box of Omo washing powder, R 100 for a bar of soap that
costs R 6 .’ He said that the businessman would have made a 500 per
cent profit through the deal, and that it was someone connected to
Magashule. ‘This was the start of Ace’s looting,’ Kganare observed.
‘Terror [Lekota] picked up that Ace was issuing instructions for