Businessman receives education contracts worth nearly 4 billion rand in Eastern Cape

A single entrepreneur's company received over one million rand per day for ten months last year, providing services for booking flights, hotels, and meals for officials of the Eastern Cape Department of Education, while the department publicly claimed a lack of funds to pay other service providers.

The department authorized payments to Khumzi Investments 1,317 times between January 14 and November 28 of last year, totaling R336,556,106.50. In one day in September, the company received 17 payments, and in November, 68.

These payments were part of nearly R4 billion in contracts that the department awarded to Khumzi over five financial years. Travel and accommodation expenses amount to R3.4 billion, increasing from R211.8 million in 2021/22 to R1.17 billion in 2025/26.

IOL investigated the activities of Khumzi's sole director, Saki Sahumzi Maghele, who acquired the provincial newspapers The Herald, Daily Dispatch, and others previously owned by Arena Holdings in May. Maghele did not respond to IOL's questions and subsequently blocked the journalist who asked them.

His lawyer, Hector Shooman of Peyper Attorneys, demanded that IOL first provide the documents on which the questions were based and warned of urgent legal proceedings. Khumzi Investments has no working website; entering its domain into a browser shows an empty server directory with three folders, one of which is named 'travel' and is empty.

The Eastern Cape MEC for Education, Fundile Gade, presented the contract figures in a written response to the provincial legislature, noting that the department had experienced financial difficulties in paying suppliers on time. Gade stated that 'there are payment delays due to internal departmental financial constraints, resulting in late or delayed payments.'

He also emphasized that no one had ever investigated Khumzi's activities. Gade reported: 'No internal investigations are being conducted regarding Khazimla Catering and Khumzi Investments concerning potential irregularities, conflicts of interest, or collusive practices in their dealings with the department.' He added: 'Currently, no payments are being disputed or flagged as irregular expenditure.'

Gade signed this response on October 31, 2025, in response to a query from Horatio Hendrix, a member of the provincial legislature, asking what work Khumzi and the catering firm Khazimla Catering had performed over five financial years.

An angered Gade faced IOL reports at a press briefing in Gugongo, formerly known as East London, on Wednesday, several hours after the publication that the 100 oldest department managers had been ordered at 4:11 am to clear a Khumzi account of R18.5 million within four days under the instruction of department head Sharon Maasdorp.

Gade noted that 'Maasdorp was appointed with delegated functions' and that 'policy states that the head must pay suppliers within 30 days.' He could not say whether this decision was 'right or wrong.' Maasdorp was present at the briefing but did not comment on the payments, stating: 'There is a proverb that dogs bark only at a moving car. Education is moving.'

Gade clarified that each contract concluded by the department lasted five years, and most of them did not have a fixed value because they were based on rates and depended on the available budget. Khumzi was one of four tourism companies dealing with accommodation, food, and transport, and one of seven suppliers for stationery under a contract that expired in 2024. He did not provide data on the other three agencies in this group.

Gade stated that 'the awarding of contracts in the Department complies with competitive bidding processes and proper procurement procedures in accordance with the provisions of the Public Finance Management Act.' He also added that 'all contracts prior to award undergo vetting by the Provincial Treasury and confirmation to ensure that necessary procurement processes are duly followed before the contract is awarded.'

The R1.17 billion allocated for the tourism contract in 2025/26 was a figure as of the end of October, with five months of that financial year remaining. Khumzi had two other contracts with the department, neither of which fit a stable supply scheme.

Expenditure on training educational materials increased from R20.5 million in 2021/22 to R146.7 million in 2024/25, then disappeared from the report. For 2025/26, the figure was not recorded. The cost of technical equipment ranged from R35 million to R51 million per year until 2023/24. In 2024/25, it dropped to R3 million, and in the following year, it returned to R55.8 million. Collectively, these three contracts amounted to R3,952,738,161.18.

Hendrix questioned the second supplier within the same inquiry, and the answer was limited to Khumzi's revenues. Khazimla Catering, appointed along with 55 other firms for hostel catering, received R111,625,392.63 over six financial years under two contracts. Khumzi, part of the group of four, received almost R4 billion.

The payment schedule demonstrated how money left the department. Last year, Khumzi received payments on 136 separate days. The median payment was R44,291.20, and 279 of the 1,317 authorizations were for less than R10,000, totaling R1.46 million or 0.4% of the total. On the other hand, 42 payments exceeding R1 million brought in R204.5 million, which is more than 60% of everything Khumzi received. Just ten payments accounted for 45% of this amount. Four payments exceeded R10 million, the largest of which, R37,946,423, was made on September 23. This was followed by another on R35,234,049.30 on April 30 and R34,910,452 on July 2.

Each of these three payments was approximately double the entire bill the department was rushing to settle in four days in June. The department's financial figures for contracts and payment records did not match. Khumzi received R336.5 million in calendar 2025. Over two financial years covering this period, Gade reported contract values of about R2 billion. None of the documents explained this discrepancy.

The email that triggered the four-day rush was sent at 4:11 am on June 26, 2025, under Maasdorp's instruction. The companies were supposed to be paid R18,485,154.69, and most of this amount was not yet overdue. The email stated: 'Dear members of senior management. See attached as per the Chief Executive's instruction (sic), all outstanding Khumzi payments must be completed.'

The attached reconciliation listed 167 invoices dating back to October 2019, distributed across 48 directorates and categories, from school feeding to internal audit. Twelve of these, amounting to R1,632,314.10, lacked a purchase order number.

A departmental official previously told IOL: 'He has so much influence in the department that even Maasdorp is just one phone call away when he needs to resolve payment issues for his company.' He added: 'He is a big man and makes decisions. No one stops him when he wants to speak to the department head.'

This official requested anonymity for fear of losing his job. Maasdorp herself is under investigation. Premier Oscar Mabuyane forwarded the list of charges against Gade to the Public Service Commission in December, and Commissioner Vusumuzi Mavuso conducted an investigation in Gugongo City in April. These charges, as previously reported, included allegations of Maasdorp attempting to influence a relative's assessment results, irregular suspension and demotion of senior officials, interference in procurement, and signing off on the transfer of R80 million intended for the purchase of a school that was never bought.

One of the charges is that she suspended a director who refused to sign a contract for a service provider who allegedly bought her a house or helped pay for the house she lives in. Mavuso's report was submitted to Mabuyane and was not made public.

Maghele became the owner of the newspapers three months before these events became public knowledge. IOL identified him as the buyer of the Eastern Cape publications last week, tracing the path through vehicle registration and corporate documents after Arena Holdings refused to disclose the purchaser. Arena Group CEO, Paul Molebeleledi, informed employees on April 30 only that the group was collaborating with a 'private investment group from the Eastern Cape.' He did not name this group.

Corporate documents obtained by IOL showed that the buyer was Ubuntu Media Holdings, which was previously listed under the inactive name K2026154195 until it was renamed on the day Molebeleledi issued the statement. Its registered address is Arena's headquarters in Parktown, and until May 5, Molebeleledi was its sole director. Maghele joined the board of directors four days after the transfer of the newspapers, along with Johannes Germanus Peer from Peyper Attorneys in Bloemfontein, the firm representing Maghele's interests.

July salaries for the publications were not paid on the scheduled payday, the 25th. After IOL reported this, their salaries were paid late on Thursday evening and early Friday morning last week. Bongani Sikoko, who edited Daily Dispatch and Sunday Times, has since resigned as CEO of Ubuntu Media Holdings.

Maghele's activities are not limited to education. Buffalo City Municipality announced a tender last year for a group of four tourism agencies, received 11 bids, and awarded Khumzi exclusively, giving it a score of 100 and citing the reason as 'only responsive bidder.' Hendrix stated this week that the Democratic Party would submit Khumzi's contracts and payment records to Scopa to request the Premier and Provincial Treasury to audit the province's spending on official travel.

Hendrix stated: 'The Eastern Cape government must explain how one company can receive over R3.4 billion in contracts for official travel and accommodation over five financial years, while qualified students are excluded from school transport because supposedly there isn't enough money.' He continued: 'Hundreds of thousands of qualified students still do not receive school transport due to significant underfunding of the program. School transport is critical for poor and rural students who have no other way to get to school.'