South Africa Paid a Beauty School US$8.8 Million; Audit Flags Insider Deals
Key Facts
- The country South Africa has about 65 million people and a US$427 billion economy, a little smaller than Denmark’s. Gauteng, home to Johannesburg and Pretoria, is its richest province.
- Why it matters Provinces run welfare with public money. Gauteng’s social development department funds nonprofits that care for children, older people and the poor, so every grant competes with basic care.
- Why now On Monday, 28 September, the investigative outlet GroundUp reported on a draft forensic report it obtained and grant records it won in court. They show where one beauty school’s money went.
- What happened The department paid Beauty Hub Academy about US$8.8 million from 2017/18 to 2023/24 to train 1,800 beauticians and hairdressers.
- The numbers In 2023/24 the school got about US$1.8 million. An average child and youth care centre got about US$158,000.
- What it means for you Investors and firms dealing with South African provinces should expect weak grant controls. Checking beneficial owners and related parties is essential.
- Still open Disciplinary cases against four senior officials, recommended in April 2024, are unfinished. No recovery of money has been announced.
Gauteng beauty training grants worth about US$8.8 million are under scrutiny in South Africa. A forensic audit found welfare subsidies for a nonprofit school passed to a private company run by the school’s own officials.
Gauteng is South Africa’s economic heartland, home to Johannesburg and Pretoria. Its welfare department paid Beauty Hub Academy R144 million (about US$8.8 million) from the 2017/18 to the 2023/24 financial year.
That made the academy one of the department’s highest-funded organisations. An April 2024 forensic report by audit firm FSG Africa found subsidies moved to a for-profit company with the same name.
Where the money went
The grants were meant to train 1,800 beauticians and hairdressers at sites in Johannesburg, Tshwane, Carletonville and the Lenasia military base. Tshwane is the metropolitan area that includes Pretoria, the capital.
In 2017/18 the academy received R14 million (about US$853,000) for 150 students. By 2023/24 it received R30 million (about US$1.8 million) for 500 students, the department’s second-largest grant that year.
The average child and youth care centre received R2.6 million (about US$158,000) that year. The academy also received R14 million (about US$853,000) between 2017 and 2023 for beauty services at old age homes.
Rand figures are converted at R16.41 per US dollar, the open.er-api.com rate for 29 September 2026.
What the audit found
FSG Africa found the nonprofit periodically paid department subsidies to Beauty Hub Academy (Pty) Ltd, a private company, without the department’s approval. Private, for-profit companies are not eligible for this funding.
The private company’s two directors, Joel Nkomo and Daisy Gama, were also the nonprofit’s principal and treasurer. The auditors called it “strange” that the 2021/22 and 2022/23 accounts combined both entities.
The academy rented its headquarters for almost R1.2 million (about US$73,000) over three years from Sehlule Properties. Nkomo and Gama are directors of that company.
It also rented two vehicles from the private company for R50,576 (about US$3,080) a month. The department separately funded two property renovations in 2022 of R750,000 (about US$45,700) each.
Between 2020 and 2023 the academy paid R8.4 million (about US$512,000) for catering to a company owned by Gama’s daughter. The auditors said Gama did not recuse herself when the board approved that contract in 2019.
After a site inspection, FSG was satisfied the academy had systems to manage its affairs. Its concerns were conflicts of interest, related-party transactions and breaches of the nonprofit’s own policies.
How the records came out
The department is supposed to publish details of the nonprofits it funds, but has not done so for years. GroundUp, a South African investigative news site, asked for the records under the country’s access-to-information law.
The request was refused, and GroundUp won an appeal in the Western Cape High Court. It published its findings on Monday, 28 September, and Daily Maverick, a national news site, carried the report.
Daily Maverick had reported a malpractice probe into the grant in January 2024. GroundUp says the Beauty Hub story is the first of three on the department’s forensic audits.
The officials named in the report
FSG said department leaders failed to oversee the grants and approved multimillion-rand payments without checking whether projects were viable. It recommended disciplinary action against four senior officials.
They are Onkemetse Kabasia, Solly Ndweni, Themba Msimanga and Mbali Ndlovu. Kabasia, then a deputy director-general, recommended a R6 million (about US$366,000) grant in 2022/23 that the academy had not formally applied for.
Msimanga, then director of partnerships and funding, approved budget deviations of over R7 million (about US$427,000) in 2023 without authority. Kabasia now heads the social development department in KwaZulu-Natal province.
The auditors said two officials’ phones had been reset to factory settings before hand-over. They recommended charges for destroying evidence, and a charge against Kabasia for not unlocking his phone.
Where the case stands
The officials were suspended under a previous provincial social development minister, Mbali Hlophe, but returned to work after her term ended. The disciplinary processes are still not complete more than two years later.
Department spokesperson Motsamai Motlhaolwa told GroundUp the processes are ongoing. He said four officials got final written warnings, one was not recharged for lack of evidence and hearings for eight others continue.
Kabasia, Msimanga, Nkomo and Gama did not respond to GroundUp’s questions. A public-sector union speaking for Ndlovu and Ndweni said they had not seen the report.
What to watch next
The department stopped funding the academy in the 2024/25 financial year after the audit. It has not announced any plan to recover money from the Gauteng beauty training grants.
GroundUp has two more reports on the department’s audits to come. For foreign investors, the case shows why due diligence on South African public partners must cover related companies.
For wider context, see our pillar on Africa: The New Scramble.
More: South Africa news in English, every day from The Rio Times.
Frequently Asked Questions
How much did Gauteng pay Beauty Hub Academy?
Gauteng’s Department of Social Development paid the academy R144 million (about US$8.8 million) between 2017/18 and 2023/24. The Gauteng beauty training grants were meant for 1,800 beauticians and hairdressers.
What did the forensic audit find?
FSG Africa found subsidies were paid from the nonprofit academy to a for-profit company with the same name, without department approval. It also flagged rent and catering deals with companies linked to directors.
Is the academy still receiving funding?
No. The department stopped funding the academy in the 2024/25 financial year after the audit findings.
Have any officials been disciplined?
The auditors recommended action against four senior officials. More than two years later those cases have not been completed, and the officials returned to work.
Connected Coverage
Sources
- Daily Maverick / GroundUp: Gauteng government’s gift to beauty training company (28 Sep 2026)
- World Bank: South Africa population and GDP (2025)
- open.er-api.com: USD/ZAR rate, 29 Sep 2026
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