Scorpio has learned that the Directorate for Priority Crime Investigation, or the Hawks, on Wednesday arrested businessman Edwin Sodi, former FSHS department boss Nthimotse ‘Tim’ Mokhesi and former national human settlements director-general Thabane Zulu. 

It is understood that the Hawks also arrested other individuals, but Scorpio has not been able to confirm this.

The asbestos deal has, since August 2019, received considerable attention at the Commission of Inquiry into State Capture. The latest development marks the first arrests relating to a matter presented to Deputy Chief Justice Raymond Zondo, the commission’s chairperson.

The arrests relate to a contract the FSHS awarded in late 2014 to a joint venture between Sodi’s company, Blackhead Consulting, and Diamond Hill Trading, a company that had been owned by murdered businessman Ignatius “Igo” Mpambani.

Although the contract for the asbestos audit was valued at R255 million, the FSHS ended up paying the joint venture R230 million between late 2014 and August 2016. 

This reporter’s book, Gangster State, first revealed details of a suspicious spreadsheet Mpambani had created before Blackhead Consulting and Diamond Hill started receiving their first payments from the Free State’s housing department. 

The spreadsheet detailed what appeared to have been suspicious payments the joint venture intended making to several roleplayers involved in the saga, including top government officials. 

The letters ‘AM’ are among several initials included in the spreadsheet. Leaked documents and emails from the late Mpambani’s businesses showed that then Free State Premier Ace Magashule’s office had on several occasions been in contact with Mpambani during and after the asbestos project. Magashule’s then personal assistants on more than one occasion requested money from Mpambani after the joint venture received payments from the FSHS. One email showed that these requests had been made on Magashule’s instruction.

The Zondo Commission subsequently heard that Sodi had paid R600,000 to a car dealership as a deposit for a Range Rover acquired by Zulu, a former Director-General at the National Department of Human Settlements. Zulu’s former department played a key role in securing approval for transferring an earlier asbestos audit contract from the Gauteng Department of Human Settlements to its counterpart in the Free State. 

Evidence recently presented to the commission also detailed a contribution of R650,000 Sodi had made towards a property Mokhesi bought in Bloemfontein. Mokhesi was the Head of the Department (HOD) for FSHS at the time it awarded the asbestos audit contract to Sodi and Mpambani’s joint venture.  

A Public Protector report released in May 2020 found that the contract had been unlawful. 

The PP report also confirmed the shocking financial wastage at the heart of the deal - of the R230 million paid to the Blackhead Consulting-Diamond Hill joint venture, only R21.3 million went towards covering the costs of the project. Those involved in the scheme had therefore made off with more than R200 million in pure profit. 

The contract had been classified as irregular by the Auditor-General as early as July 2015, but Mokhesi’s department nevertheless continued making payments to the joint venture.

The Hawks’ spokesperson in the Free State, Warrant Officer Lynda Steyn, said the DPCI would release a statement on the arrests later on Wednesday.

Daily Maverick