PAPER TRAIL: Invoices reveal millions in anomalies in Daybreak Foods’ payments to PIC-linked law firm

The invoices at the centre of the Daybreak Foods scandal point to millions of rand that forensic investigators could not properly account for. A Nexus Forensic Services report found that entities linked to attorney Pule Malahlela received approximately R123.9 million from the troubled poultry producer over two years.

Within that total, investigators flagged R39.9 million as completely unlinked to any invoice and identified another R8.8 million in suspected duplicate payments. The report also found hourly rates above approved limits and charges lacking proper supporting documents.

The firm’s connection to the Public Investment Corporation had already raised questions. The Sunday Times reported the ties in 2021, linking Malahlela’s practice to Bongani Mathebula, then the PIC’s company secretary. Mathebula had been placed on precautionary suspension in 2017 over allegations that she leaked confidential board documents, which she denied. She was later cleared and reinstated. During the suspension, Malahlela asked her to join his new practice, PJM Attorneys, as an associate. Mathebula said she ended the relationship after returning to the PIC, although she remained on the firm’s paperwork.

The practice later operated as Malahlela & Co and billed Daybreak under the name Black-White. It was nevertheless appointed to investigate corporate misconduct at Daybreak, placing a firm linked to a PIC executive at the centre of the inquiry. The Democratic Alliance is now calling for a formal Special Investigating Unit investigation and criminal probes, with the legal fees central to its complaint to the president.

According to evidence reviewed by Daily Maverick, Daybreak’s board initiated the appointment, company secretary Kgabo Mapotse recommended it, and board chair Lerato Nage approved it in January 2021. Chief financial officer Vangile Masisi said the attorneys reported directly to Mapotse, who personally confirmed and approved the billed services. Matshela Seshibe, appointed chief executive in May 2022, said the appointment substantially predated his tenure. The publication said a verified invoice trail supported a conservative estimate of R57 million, while the business rescue plan put the figure higher. The business rescue practitioner also recommended criminal prosecution and civil recovery.

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Malahlela and Company Attorneys/Black-White: This appointment also substantially predated my tenure.