Godongwana and Mdwaba’s out-of-court settlement squabble

Finance minister Enoch Godongwana and businessman Mthunzi Mdwaba sparred for hours on Thursday in the Joburg high court trying to decide a R1-million damages claim stemming from corruption allegations in a R5-billion jobs-creation tender, but the duo still has not had enough.

The latest war of words between the two camps involves a settlement agreement discussed ahead of Thursday’s heated hearing, and while both sides agree that they sought to bury the matter out of court, they cannot agree on who was the first to table the proposal.

At stake is the perception that the side that acknowledges they were the first to propose the failed offer will look guilty in the public eye. Neither Godongwana nor Mdwaba is willing to back down and take an egg in the face.

Judge Dario Dosio on Thursday reserved judgment on Godongwana’s R1-million damages claim against Mdwaba over allegations of a R500-million kickback to facilitate the smooth sailing of the government tender the Unemployment Insurance Fund awarded last year to Mdwaba’s Thuja Capital.

Other ministers mentioned in the alleged scheme were Employment and Labour Minister Thulas Nxesi and Higher Education Minister Blade Nzimande, as well as ANC secretary general Fikile Mbalula.

They have all since taken legal action against Mdwaba, and on Thursday, Godongwana was the first to test the strength of their respective cases.

But all that would not have mattered had a last-minute deal to settle the matter out of court succeeded.

Mdwaba placed the initiative for a settlement squarely in Godongwana’s corner. “We were approached by the minister via his lead counsel, Tembeka Ngcukaitobi, with a view to withdrawing the matter, and we refused outright. It was by our insistence that the matter must be heard, as we had gone through letters of demand and refused to retract and apologise.

“We want the truth to come out, as we know of many people whose lives have been destroyed, dreams shattered, bullied, and manipulated by these people… and they drag people’s names in the mud, drag legal matters because of the insurmountable resources at their disposal, and so on. The truth shall prevail.”

Godongwana, who was in Davos for the World Economic Forum, referred questions to his legal team, only saying: “The little information I have is that Mdwaba’s legal team approached my legal team with a settlement proposal.”

A few emails between the parties, which Sunday World saw, offered a clue as to who may have initiated the settlement offer, but they are also inconclusive. The record showed that both parties were involved in talks as far back as Monday evening. The earliest correspondence, from Mdwaba’s attorney, Khumusi Kganare, read: “Thank you for your call earlier today. As discussed, please find herewith the attached draft for your kind attention, the only change made is on paragraph 3 adding the word “direct”, otherwise other paragraphs are not contested. If you are in agreement I am sure we can settle accordingly.”

The statement suggested Kganare modified a draft from the other side.


Godongwana’s attorney, Rudolph Baloyi, responded: “We have discussed, and the consensus is there is no settlement on the proposed terms and we should rather just argue the matter”. He aportioned the proposed terms to the opposing camp.

Two hours later, Baloyi warned Kganare: “In the best interests of our client and time, should we not have an agreement by 9pm then the position will be that we are proceeding with argument tomorrow and for the relief contained in the
notice of motion.”

Baloyi told Sunday World: “They came to us with a settlement proposal, which we rejected because we’ve always believed the allegations against the minister are a figment of Mdwaba’s wild imagination. He failed to provide a sound answer to the minister’s suit and proposed an ‘empty settlement’, which we rejected. Any suggestion that we tried to settle is fictional.

“They approached us with a settlement, which we rejected. The version you have is totally sanitised and is an attempt to paint the minister as guilty and desperate. We reject it wholly.”

Ngcukaitobi provided another clue when the two teams briefed the judge ahead of Thursday. He is heard in a video recording saying the settlement talks made “no progress”.

 “The history to that settlement draft that you saw was sent by my team. It was an agreement between me and the counsel for Mr Mdwaba. It turned out that he did not have instructions, and they retracted it.”

Mdwaba explains: “On Saturday night, Ngcukaitobi called his counsel, Advocate Phazha Ngandwe, and offered to withdraw, and each party would pay the other’s costs.”

He said Ngandwe talked to his team on Sunday and presented the offer. The team questioned the move and preferred to proceed, but Ngandwe persuaded them to consider it. “On Monday, they drafted the withdrawal, now with a clause that we lack direct evidence and we must retract. We confirmed then we were not interested in the deal.

“So when they got to court on Tuesday, the judge said, I’m sorry, but I have received many instructions because there was a draft order they drafted as per their offer and their approach, and we then sent ours. Our draft order was that the application was not urgent and must be dismissed with costs.

“So the judge said, ‘which one should I listen to’? So in the video clip, Ngcukaitobi is explaining that he is the one who came with the offer, but Ngandwe had no instructions, obviously because they approached us.”

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