Tag Archives: Gupta state capture

South Africa – Captura Continua: Will the Guptas determine the ANC succession race?

Daily Maverick (South Africa)

    • Ranjeni Munusamy
      ranjeni munusami BW

 

ranjeni-Succession-post-GuptaLeaks.jpg

Three weeks after the Guptas’ private email correspondence began cascading into the public domain, revealing the depth of the capture of the South African state, we are yet to see outrage and a fightback from the ANC. The party elected to govern by South African people, but now essentially cuckolded by the Guptas, has shown it is powerless against the family. The Guptas appear to be still pushing buttons behind the scenes and their main focus is to ensure that they stack the deck at the ANC’s 54th national conference, mostly to secure their new Number One. By RANJENI MUNUSAMY. 20

Nkosazana Dlamini-Zuma has publicly accepted nomination for the position of ANC president, making her the first woman in the history of the 105-year-old organisation to contest the top leadership post. But far from this being a notable moment in history, it is the occasion for despair. Dlamini-Zuma has, without reservation, consented to becoming top of the ticket sponsored by the Gupta family. 31

Up to this point, one could still give Dlamini-Zuma the benefit of the doubt that she was simply riding the ANC Women’s League (ANCWL) wave and would distinguish herself from the Gupta herd. But last week the ANC Youth League (ANCYL) announced its leadership slate, the first ANC structure to do so formally. 27

“Comrade Nkosazana Dlamini-Zuma is the president of the ANC, comrade David Mabuza as the deputy president of the ANC, Comrade Ace Magashule as the secretary general of the ANC, Comrade Nathi Mthethwa as the national chair of the ANC, DSG for monitoring and evaluation Comrade Jessie Duarte, DSG for organising and campaigns Comrade Fikile Mbalula and the treasurer general Comrade Maite Nkoana-Mashabane,” ANCYL secretary general Njabulo Nzuza announced at a media briefing following their national executive committee meeting. 29

The ANCWL’s endorsement of Dlamini-Zuma and declaration that it wanted more women in the top leadership of the party at least had the veneer of punting the gender ticket. There was no such effort by the ANCYL. Mbalula, a former ANCYL president, was nominated for a position that does not even exist constitutionally in the ANC. Besides, Mbalula is now 46 years old and can hardly qualify as a “youthful” candidate in the leadership race. The second youngest person on the ANCYL slate is Mthethwa, who at 50 years old is hardly a spring chicken himself. 24

So what is the Youth League up to? And why is Dlamini-Zuma such a willing participant in this agenda? 7

In January ANCYL president Collen Maine indicated that their choice of presidential candidate would send “shockwaves” throughout the ruling party. 12

“These candidates who have been mentioned are part of the system. They have been part of the system we want to change. We need bold leadership. We need a second revolution that will cause ruptures in the economy,” Maine told Reuters back then. 36

Either Maine overestimated the impact of their endorsement of Dlamini-Zuma or their hand was forced to change the “shockwave” candidate they had in mind. There was also talk a few months ago that the ANCYL slate would include Malusi Gigaba, now the finance minister, and Mbalula, for top posts. Clearly that did not materialise. 19

The #GuptaLeaks exposed that Maine was being scripted by the family’s PR firm Bell Pottinger to further their manufactured white monopoly capital narrative. 29

So what else are Maine and his organisation doing on behalf of the Guptas? 19

Since the release of their emails, there have been no public moves by the Guptas. They have gone to ground and not responded publicly to any of the revelations against them. Clearly the family does not believe their ecosystem has been significantly disturbed by the revelations or the reaction to them. 25

While Gigaba and his public enterprises counterpart Lynne Brown are floundering to keep their heads above water, the people who should be most affected by the leak of the tranche of emails are manoeuvring from their place of seclusion. They are doing what they do best – arranging the political playing field to protect themselves and advance the interests of their business empire. 37

There are two positions in the ANC leadership that the Guptas need in particular to keep their project on track: president and secretary general. The ANCYL slate stitches that up for them. 21

President Jacob Zuma and his son Duduzane have been worthwhile investments for the family – both performing as lead marionettes in the Gupta extravaganza. But when Zuma ceases to be ANC president, his power diminishes and he would become a lame duck in the state. Duduzane will then be expendable – unless he is able to act as middleman to the successor as well. 19

Enter Dlamini-Zuma, his stepmother and willing advocate of the “radical economic transformation” narrative that Duduzane and Bell Pottinger conjured up. 26

There have been many moments in the chaos of this year when the former African Union Commission chairperson could have distanced herself from the chaos of the Zuma presidency. If hers was to be a clean, capture-free presidency, the most obvious move would have been to put fresh air between herself from Zuma’s disastrous midnight Cabinet reshuffle. After all, as a potential president, Dlamini-Zuma would inherit the consequences of that suicidal move – a downgraded and junked economy. Surely it would make sense to separate herself from that mess. 32

It would also have been logical for Dlamini-Zuma to distance herself from the stench of the Gupta emails, especially considering they had nothing to do with her. The campaign of her main competitor, Cyril Ramaphosa, has been significantly strengthened by him speaking out against state capture and repeatedly calling for a judicial commission of inquiry into the mounting allegations. Ramaphosa’s campaign has morphed into an anti-corruption ticket basically by him stating the obvious: a full-scale, credible investigation is required. 30

But Dlamini-Zuma is doing no such thing. She is not making any effort to separate herself from the capture contagion. Clearly it serves her agenda. 41

The secretary general position is essential to control the functioning of the ANC. While the Guptas might not have captured Gwede Mantashe, his erraticism and volatility did not do much to protect the ANC from their influence. But the Guptas did have a handy insider in the office of the ANC secretary general in the form of Mantashe’s deputy, Jessie Duarte. She is entangled in their network and also exposed as talking to their script. 32

The Guptas are now looking to seize control of the office of the secretary general entirely. Free State Premier Ace Magashule is the candidate who will deliver the ANC in its entirety to the family. 34

Magashule has already been a handy asset for the Guptas, delivering massive provincial deals and feeding their media entities through the provincial coffers. His sons, Tshepiso and Thato, were exposed in the emails as having been ensnared in the Gupta network for some time. Magashule clearly has ambitions and a higher calling now. 33

Opposition to his candidacy came from a surprise source in the past few days. Mbalula indulged in a spontaneous Twitter blast in which he recommended Gauteng Premier David Makhura for the position of secretary general. 25

“Ace Magashule a definite no no no the man will finish what is remaining of our movement he will kill it inffect #Thinkingaloudbeyond,” Mbalula tweeted. This was followed by: “Ancyl let’s rally behind David Makhura as a replacement to Gweede Mantashe #ThinkingBeyondFactions”. 12

Mbalula reaffirmed his sentiments to the Sunday Times, saying he had nothing against Magashule personally but believed the secretary general position was essential to the ANC’s survival. 16

“The office of the SG comes with a lot of integrity. It must not take sides and annihilate people and run comrades to the ground,” said Mbalula. Clearly the police minister does not think too highly of the candidate nominated by the ANCYL. But Mbalula’s tweets do open the debate beyond the Gupta-endorsed slate and the faction rallying behind Ramaphosa. 12

This weekend, Gauteng ANC chairperson Paul Mashatile threw his weight behind Ramaphosa, saying he could protect the country from all forms of capture. He told the ANC’s West Rand regional general council that the ANC did not need cowards who would put the country up for sale. He also dispelled the debate over a woman president, saying the ANC needed a capable leader of whichever gender. 28

While Mashatile’s endorsement is indicative that Gauteng is likely to rally behind Ramaphosa, the province might be disorientated if there are more calls for Makhura to be deployed as a consensus candidate for secretary general. Gauteng is resolved that Mashatile should occupy one of the top six posts and has been negotiating with other provinces in this regard. 13

But all the debates and negotiations around succession might come to nothing if the ANC remains powerless to the interference of the Guptas in its processes. The infusion of dirty money to influence the votes of branch delegates has been a successful lobbying tactic in the past and will no doubt be used again. The Guptas have sufficient resources to splurge on this project, particularly as they have a massive vested interest in the outcome of the leadership elections. 28

Buying off a president has turned out to be a boon for the Guptas. Even though the state capture edifice is cracking, the Guptas know that capturing the top leadership of the ANC in December will allow them to regain their foothold and have unrestricted access to the state machinery and resources. 31

There is nothing to indicate that the ANC has the ability or willingness to stop them. The party has six months to fight off the biggest demon since apartheid – or be conquered by it. DM

  • Ranjeni Munusamy is a survivor of the Salem witch trials and has the scars to show it. She has a substantial collection of tattered t-shirts from having “been there and done it” – from government, the Zuma trials, spin-doctoring and upsetting the applecart in South African newsrooms. Following a rather unexciting exorcism ceremony, she traded her femme-fatale gear for a Macbook and a packet of Liquorice Allsorts. Her graduation Cum Laude from the School of Hard Knocks means she knows a thing or two about telling the South African story.

  • South Africa

South Africa – #Guptaleaks reveals how Guptas screwed Denel

News24

2017-06-10 08:15

 

(Felix Dlangamandla/Gallo/Foto24)

(Felix Dlangamandla/Gallo/Foto24)

 

Johannesburg – Leaked records from the heart of the Gupta business empire help solve the mystery behind Denel Asia, the controversial arms marketing partnership that national treasury has tried to block.

The #GuptaLeaks show:

  • The Guptas tried to sell Denel’s intellectual property to India, while watering the state arms company’s stake down by half.
  • Acting as middlemen, they took the biggest stake for themselves and cut in a powerful Indian tycoon – close to Prime Minister Narendra Modi – for his “influence”.
  • They primed, wined and dined Denel’s then new chairman, Dan Mantsha, who sent them confidential government documents.

The Gupta family set themselves up to sell state arms manufacturer Denel’s weapons to India in a deal involving a shady Indian fixer and a powerful tycoon close to prime minister Narendra Modi.

The Guptas arranged to sideline Denel and take the biggest share for themselves even though it was Denel’s proprietary technology that was to be sold.

These details are revealed in the #GuptaLeaks, a trove of electronic data sourced from the heart of the Guptas’ business empire.

In January 2016, Denel announced the formation of Denel Asia, a Hong Kong-based joint venture that it controlled, holding 51%. The rest belonged to a company registered to Gupta lieutenant Salim Essa.

Defending themselves against criticism at the time, Denel and the Guptas claimed that the Gupta family had no interest in the Essa company, VR Laser Asia, and by implication in Denel Asia.

The #GuptaLeaks show they were misleading South Africans.

Emails in the trove show Denel officials knew the overriding purpose of setting up Denel Asia was to sell arms to India – targeting more than $8bn in deals there – via a second joint venture called Denel India.

In Denel India, Denel’s participation was watered down to just 25%.

The Guptas, who brought little to the table besides their political connectivity in SA and India, planned to wield a controlling 42% stake – exercised via Essa and their brother-in-law, Anil Gupta.

Anil, a former minister in the Indian state of Uttarakhand, is married to Achla, the Gupta brothers’ sister. The controversial Gupta wedding at Sun City celebrated the marriage of Anil and Achla’s daughter, Vega.

The files contain emails and draft contracts that show that as Denel Asia was being established in Hong Kong, the Guptas were putting together a second-tier company in India called Denel India, in which their Indian brother-in-law would hold a significant stake.

They also show the Guptas had a direct involvement in the establishment of Denel Asia, suggesting Essa was little more than their proxy.

Denel India was to be owned by Denel (25%) and Essa (24%) via Denel Asia, as well as Anil Gupta (18%) and the Indian multinational Adani Enterprises (33%).

Thus, Denel’s participation was to be diluted significantly – and the emails show Denel executives were well aware the company would enjoy only a minority stake in the Indian venture.

Adani was key to the plan, the emails suggest.

Its billionaire founder and chairman, Gautam Adani, is often reported to be close to Narendra Modi, the Indian prime minister.

Much like the Guptas and President Jacob Zuma in SA, commentators link the rise of Adani’s business empire to the political rise of Modi, starting in the early 2000s when Adani supported Modi when he was politically weak.

In one 2016 email, the CEO of the Gupta-owned VR Laser in SA, Pieter van der Merwe, objected to a draft contract in which Adani suggested it use nominee shareholders.

Van der Merwe made Adani’s role clear:

“We are entering into an agreement with [Adani] as a result of their name, history and connections. If it means they are going to appoint an affiliate who doesn’t have any know-how or influence, we do not need a partnership.”

Companies in the Adani group have been accused by Indian authorities of money laundering and tax avoidance to the tune of about $750m.

Adani did not respond to an emailed request for comment.

But it was another controversial Indian businessman who appeared to introduce the Guptas to Adani: Kolkata businessman Parasmal Lodha.

Indian authorities recently arrested Lodha for money laundering. He was released on bail last week.

Lodha is very close to the Guptas, the #GuptaLeaks show.

They attend each other’s family weddings and holidays and a senior Gupta manager once used contacts in the department of home affairs to arrange a South African visa for Lodha.

It was Lodha who in 2013 emailed Tony Gupta, asking him to invite Gautam Adani, among “a few friends”, to another Gupta wedding, this time of Anil Gupta’s son.

In 2015, as the Guptas were assembling their partnership with Denel and Adani, Lodha reviewed an Adani Enterprises contract within the Denel India structure and emailed comments to Tony Gupta.

Around the same time, Lodha twice helped to arrange for Gautam Adani to visit SA.

Lodha did not respond to questions.

The involvement of tainted figures such as Lodha and politically exposed persons such as Adani – along with Essa and the Gupta family – suggest Denel was willing to pursue a recklessly high-risk strategy.

Denel was previously blacklisted from selling arms to India because it had used commissioned agents, a banned practice there.

However, the Denel Asia and Denel India structures circumvented this by including the Guptas – effectively Denel’s agents – within the company structures.

After amaBhungane first wrote about Denel Asia in early 2016, the national treasury confirmed that it viewed the partnership to be illegal.

It said it had not approved the deal under the Public Finance Management Act (PFMA).

Denel publicly disagreed and is now suing treasury and the finance minister.

In a court affidavit, former treasury head Lungisa Fuzile said that in its PFMA application, Denel “discusses two potential partners in India: Adani Group and PIPAVAV, both of which are leading Indian conglomerates expanding into the defence industry. It is not clear why these companies were overlooked by [Denel] in their review of the market and what led [Denel] to the conclusion that VR Laser Asia was the most suitable partner.”

The implication seems to be that he too was concerned that the Guptas were simply inserted as agents – although it was via taking a stake in a Denel subsidiary, rather than receiving a fee.

A Denel spokesperson said: “We have been advised that the Hawks are carrying out an investigation on the matters pertaining to the #GuptaLeaks emails. We would rather give space to the Hawks to undertake their investigations on all these matters fully before making any comments.”

Gupta lawyer and regular spokesperson Gert van der Merwe has refused to comment on #GuptaLeaks claims, saying: “I have no documents or context or instructions. It is inappropriate.”

The #GuptaLeaks suggest the Guptas pursued an intricate plan to push their Denel project through, involving inside information and the positioning of sympathetic decision-makers, including four-day finance minister Des van Rooyen.

They contain a number of email threads in which intricate details of the Denel Asia joint-venture are discussed between October 2015 and February 2016.

Inevitably, these lines of correspondence ended up on Tony Gupta’s or Gupta managers’ desks.

For example, the PFMA required Denel to get permission from the ministers of public enterprises and finance before it can strike up a public-private partnership like Denel Asia, which consisted of state-owned Denel on the one hand, and privately owned VR Laser on the other.

One day after Denel submitted its PFMA application to treasury on 30 October 2015, Denel chair Dan Mantsha forwarded the confidential document to Ashu Chawla, a senior Gupta executive.

The #GuptaLeaks have already exposed how the Guptas hosted Mantsha on lavish trips to Dubai.

But the timing of his meetings and communications with the family and their factotums adds to the impression he was their cats-paw.

On 24 July 2015, Public Enterprises Minister Lynne Brown announced sweeping changes to Denel’s non-executive board, leaving only Gupta beneficiary Nkopane “Sparks” Motseki in place and removing experienced directors in favour of relative unknowns.

Key among them was Mantsha, appointed as the new chair of Denel, despite that fact he was struck off as an attorney in 2007 and only re-admitted in 2011.

Just days after his appointment, on August 3, Mantsha forwarded a copy of his outstanding municipal account for R14 238 to Gupta lieutenant Ashu Chawla.

The same account was again forwarded to Chawla in October. Both were marked “for your urgent attention”.

By August 5, the emails show Mantsha was listed to join Tony Gupta and others on a flight from Johannesburg to Mumbai aboard the Guptas’ private jet ZS-OAK.

It is not clear if he was aboard, but he was booked a room with the family at the ITC hotel in Mumbai for August 6 and 7 and he was listed as a passenger for the subsequent Mumbai-Delhi and Delhi-Johannesburg legs.

A few weeks after his return from this jaunt, the new Denel board moved against the existing Denel executive.

On September 24, the board suspended chief executive Riaz Saloojee, financial director Fikile Mkhontlo, and company secretary Elizabeth Africa.

(Since then, their supposed disciplinary infractions have all melted away and they have been paid severance packages.)

By September 29, Chawla was handling the application for a Dubai visa for Mantsha and by the next day the Guptas’ travel agent had booked a business class ticket from Dubai to Johannesburg for him, invoiced to a Gupta company for R33 280.

Mantsha failed to respond to detailed questions about his relationship with the Guptas.

But Mantsha was also not the only source the Guptas had providing top-level intelligence on the Denel project.

On 23 November, Public Enterprises Minister Lynne Brown provisionally approved Denel’s negotiations with VR Laser Asia to form Denel Asia. One day later, the emails show, Chawla had a copy of her approval.

A few days later, Denel chair Mantsha sent the same confidential document to Chawla.

To its PFMA application to Minister Brown, Denel attached a spreadsheet of “opportunities that Denel feels confident will be secured jointly with VR Laser Asia”. This detailed $9.3bn worth of potential weapons deals in the region. Of this, $8.2bn would be sourced from India.

From November 26 to 29, the Guptas’ chosen Indian partner, Adani, was their guest in SA.

Mumbai fixer Lodha was instrumental in the arrangements and the emails show his assistant wrote to an Adani staffer noting: “Meeting with the [South African] President, Ministers and CEOs of mining, power and port has been arrange [sic] on 27th and 28th… Car and necessary security will be arrange [sic] by Mr Gupta.”

By this time the Guptas were already shopping for a new finance minister, according to evidence provided to the public protector, and it seems they wanted the Denel Asia joint venture PFMA application to be on his desk when he landed.

Although Brown at public enterprises had given provisional approval, the law required the finance minister to approve the joint venture too.

The #GuptaLeaks show that on December 7, Chawla emailed a copy of Brown’s in-principle approval and briefing document directly to the finance minister’s personal assistant.

On that day, the minister was still Nhlanhla Nene, but three days later, on December 10, it was Des van Rooyen.

The very next day Denel submitted its formal PFMA application for Denel Asia to the new finance minister, according to an affidavit delivered in the High Court dispute between Denel and treasury over the establishment of the Hong Kong joint venture.

Van Rooyen was removed on December 13 before he could approve Denel Asia – and the status of the joint venture has been in dispute ever since.

That didn’t stop the Guptas from trying to forge ahead.

After Van Rooyen’s sacking, Mantsha joined a procession of influential figures in a pilgrimage to the Oberoi hotel in Dubai and an audience with the Guptas at their new R325m pad.

Invoices from the #GuptaLeaks show he stayed at the Oberoi between January 3 and 6, 2016 at the expense of the Guptas’ Sahara Computers and was chauffeured to their home at L35 Emirates Hills.

Mantsha failed to respond to questions about the purpose of the visit, but presumably it was to regroup.

During this time VR Laser SA chief executive Van der Merwe, Tony Gupta and others continued to exchange thoughts on draft contracts with Adani Enterprises, the emails show.

In one instance, Van der Merwe forwarded to Tony Gupta a chain of correspondence between himself and Denel officials in which they debated whether or not Denel India, the Denel Asia joint venture with Adani, was separately subject to the PFMA.

He said Denel and VR Laser had previously agreed that when Denel applied to the ministers of finance and public enterprises for consent, their planned new Indian company should be disclosed so “as to play open cards with what the parties intend to do”.

And to Tony Gupta, Van der Merwe complained: “They are missing the point and the reason why we entered into this transaction. In the private sector, time is of the essence. This is the basis on which we have decided to invest in a funding facility.”

In a February 2016 email to colleagues – after they received questions from amaBhungane – VR Laser CEO Van der Merwe explained that the SA VR Laser was going to loan Denel Asia R20m a year for five years to cover certain costs.

The terms of this loan have never been explained, but it is clear from the #GuptaLeaks and court records that the plan was for Denel Asia to repay it.

On February 5 2016 amaBhungane broke the story of the Guptas’ involvement in Denel Asia and treasury began issuing the first of a series of statements questioning the legality of the joint venture.

Denel appeared undaunted.

On 24 February Denel’s acting chief executive Zwelakhe Ntshepe signed a board memorandum recording Denel’s approval to negotiate the formation of Denel India, in which Denel Asia would have 49% and Adani Enterprises 51%.

Two days later he jetted off on another Gupta jet, ZS-AKG, bound for the Indian city of Goa, which was hosting the 2016 Defexpo, a defence trade show.

Denel’s exhibition stand was confidently hosted under the banner of “Denel Asia” – a company that barely existed but promised a turnover of billions.

Now those dreams are shattered.

• Scorpio is the Daily Maverick’s new investigative unit. If you’d like to support its work, click here.

South Africa – have Zuma and Guptas reached the parting of the ways?

Rand Daily Mail

 

——

How Jacob Zuma and the Guptas have parted ways

President Jacob Zuma’s association with the Guptas has been much reported. There is no question that he and his family business interests were entangled in such a way that he was compromised. Two revelations demonstrated how deep this entanglement ran.

The deputy minister of finance, Mcebisi Jonas, revealed that the Guptas had offered him the position of finance minister, an extraordinary breech of Zuma’s responsibility to hire and fire ministers.

And Themba Maseko revealed how he was removed from his position as government spokesman after he failed to humour the Guptas.

The conventional wisdom is that Zuma is in the Gupta’s pockets and he will always do their bidding.

Except, he hasn’t. Not recently anyway.

We may have entered the post-Zupta era, one in which the Guptas no longer require the services of Zuma. His ability to install or remove ministers without the concurrence of Luthuli House has been severely curtailed following the failed attempt to appoint Des van Rooyen as finance minister.

More than that, he is a political liability. What happens when he goes?

It could be that the Guptas are now working directly through the ministers they influence, cutting out the middle-man as it were.

This is, in some respects, a more frightening scenario. It suggests that big chunks of government business are being conducted without the knowledge of cabinet or the president in collusion with a private party.

How else do you explain the strange case of Mosebenzi Zwane? The minerals minister waited for Zuma to be out of the country before announcing that cabinet had agreed to rein in financial regulators and to investigate banks over their refusal to bank the Guptas.

If the old Zuma-Gupta relationship was still functioning, Zuma would have remained silent or, at least, issued a statement fudging the issue, perhaps even stating that he concurred with Zwane’s viewpoint but that the fellow had taken it too far.

Instead, Zuma roundly condemned Zwane’s statement and made it plain that no such cabinet discussion had taken place. These hostile actions were hardly those of an ally.

Here’s what the statement said:

The unfortunate contents of the (Zwane) statement and the inconvenience and confusion caused by the issuing thereof, are deeply regretted. Zwane does not speak on behalf of Cabinet and the contents of his statement do not reflect the position or views of Cabinet, the Presidency or government. 

Although I must stress that there is no evidence that the head of the National Prosecuting Authority, Shaun Abrahams, is on the Gupta pay-roll, a similar scenario played itself out in recent days.

Zuma was out of the country. Abrahams announced that the finance minister, Pravin Gordhan – the number one thorn in the flesh of the Guptas – would face fraud charges over an HR decision about the early retirement of a SARS official.

Zuma, we now know, was kept informed of developments through the justice minister, Michael Masutha. But when he commented on the issue, he hardly issued a ringing endorsement.

This time, he said:

Our society is anchored on the rule of law as well as fair and just judicial processes. In this regard, Minister Gordhan is innocent until and unless proven otherwise by a court of law. This is a fundamental pillar of our constitutional democracy and the rule of law.

The accompanying statement read:

The President has reaffirmed his support for the Minister and added that the decision by the NPA came at the most sensitive time for the country when Minister Gordhan was successfully leading initiatives towards economic revival, bringing together business, government and labour in efforts to reignite growth so that jobs can be saved and created.
Again, hardly a ringing endorsement of the prosecution of Gordhan.

The following day, Abrahams prepared the ground for a strategic retreat, saying the decision to charge Gordhan had not been his and that Gordhan could review the case if he so wished.

What appears to be taking place is that the ANC is holding Zuma in check, controlling his public responses and ensuring that there is distance between himself and the Guptas.

You can, of course, develop a convoluted, wag-the-dog theory about how Zuma is behind it all, manipulating everything while presenting a different face to the public. But sometimes, the obvious explanation is the obvious explanation.

There is no doubt that Zuma would love to fire Gordhan and he may still do so. But, if he does, he will be breaking ranks with the ANC consensus and find himself more politically isolated.

How ANC’s path to corruption was set in South Africa’s 1994 transition – Roger Southall

The Conversation

Nelson Mandela and FW de Klerk played a critical role in the making of the 1994 political transition in South Africa. Reuters

There are suggestions that the African National Congress (ANC) in South Africa lost the plot after the ascension of Jacob Zuma as the party’s president in 2007. There may be important elements of truth in this. However, there are compelling reasons that situate the morality challenges faced by the ANC – and by extension the country – in the 1994 political transition.

Recent developments do indeed place Zuma, who is now also the president of the country, at the centre of the web of corruption at the present time. And it is clear that some within the ANC hold him personally responsible for the drastic decay in the party’s morality. For many, the present battle between Zuma and his minister of finance Pravin Gordhan is viewed as the culmination of between those who view the ANC as a machinery for accumulation and those who hold true to its historical mission as a vehicle of liberation fighting for a more socially just society.

The harassment suffered by Gordhan at the hands of the Hawks, an elite police unit, is seen as an extension of the “state capture” agenda that led to the firing of Nhlanhla Nene in December 2015. This comes after a host of allegations that the country’s key state owned enterprises, like South African Airways and the power utility Eskom, have been captured by the Zuma faction of the ANC elite.

This might look like a factional battle with good guys on one side and bad guys on the other. But I would argue that the challenge of economic transformation within a racially polarised capitalist economy provided opportunities for careerism, personal enrichment and corruption.

At the heart of the morality problems faced by the ANC are fundamental forms of relations it has carved with capital as driven by two principal factors. Firstly, as a political party the ANC has needed funding. Secondly, there is the factor of how the ANC has chosen to promote what it terms the National Democratic Revolution, most notably through Black Economic Empowerment.

Partner with large scale capital

In the mid-1980s, South African capitalism had begun to lose faith in the capacity of the National Party government to stem the rising tide of revolution. Increasingly, therefore, business looked for an accommodation with the ANC. For its part, the ANC leadership recognised the unreality of strategy premised on a revolutionary seizure of power. It presented itself as a partner with which large scale capital could play.

While it was the political negotiation process which grabbed the attention, much was happening behind the scenes. Individuals at the top of the corporate ladder struck up relationships with the incoming ANC leadership. Above all, this was exemplified by a focus on Nelson Mandela, who after his release from jail came to enjoy the company of the very rich. He forged strong relationships with both Harry Oppenheimer, Chairman of Anglo-American, and Clive Menell, vice chairman of the rival Anglo-Vaal mining group.

Just as the ANC was unable to overthrow the political, so it was unable to overturn the economic order. The collapse of the Soviet Union, one of the ANC’s principal supporters, fundamentally changed the international landscape. This played to the strengths of those leaders within the ANC who were less than enamoured with state socialism. Such factors, along with pressure from bodies like the International Monetary Fund, underlay the shift away from the left.

State-owned enterprises

At base, the ANC was a nationalist movement whose principal focus was on the capture of the state and the pursuit of democracy. Within this formula was embedded the commitment to the overthrow of “internal colonialism” (the domination of whites over the majority black population). It followed that capture of the state and internal decolonisation would require the rapid growth of the black middle class and indeed, the expansion of a class of black capitalists. This was true both in terms of social justice and the needs of the economy.

However, the problem facing an emergent black capitalist class was its lack of capital and capitalist expertise. One of the solutions was that, from the moment it moved into office, the ANC viewed its control over the civil service and parastatals as the instrument for extending its control “over the commanding heights of the economy”. Parastatals accounted for around 15% of GDP.

This included the strategy of transferring state-owned enterprises on discounted terms to blacks via privatisation. In the event, this did not prove to be particularly successful simply because the amounts of capital required for the purchase of all but non-core assets were too large for aspirant black capitalists to raise.

Nonetheless, the national democratic revolution charged the ANC with using state power to deracialise the economy. This predisposed the ANC to regard the parastatals as “sites of transformation”. The ANC’s control of the state machinery became a source of tenders for its cadres. This aspect has lent itself to corruption, patronage and the monetarisation of relationships within the ANC.

The extent of corruption in tendering is difficult to estimate. The ANC is appropriately anti-corruption in its official stance, and indeed has put in place important legislation and mechanisms to control malfeasance. Equally, however, it has proved reluctant to undertake enquiries which could prove embarrassing.

There have also been two other activities at work. First, certain corporations have distributed financial largesse to secure contracts and favour from government. (Their success in so doing is hard to prove given the secrecy of party funding). Second, ANC politicians at all levels of government have sought to influence the tender process in their favour.

Odd combination of power and money

One of the key challenges is that the South African political economy continues to revolve around “an odd combination of new (political) power without money and old money without power”. Each needs the other to advance its interests. This is structurally disposed to favour corruption, as is indicated by the incestuous relationship which has developed between Chancellor House and parastatals. Chancellor House is listed as a charitable trust designed to facilitate economic transformation. However it has become clear that its intent is to fund the ANC.

And the need for party funding is more likely to increase than diminish. Although the case for public disclosure of private funding of political parties is by no means so strong as its supporters proclaim, it remains difficult to exclude influence peddling from this particular terrain.

As the ANC acknowledges, it is a multi-class movement composed of capitalists, middle class, workers and the poor. As such it is a host to class struggle within a society imbued with capitalist values and consumerist temptations. Despite the early efforts of Congress of South African Trade Unions and the South African Community Party to shift policy to the left, many within their own ranks have fallen victim to the temptation of following a political path to personal enrichment. In such a situation, it is not surprising that it is the rich and the powerful who have benefited overwhelmingly from our democracy.

This article was adapted from a paper titled The ANC for Sale? Money, Morality & Business in South Africa published in the Review of African Political Economy

South Africa -Gupta files sent to Hawks by ANC whistleblower

City PresVytjie Mentor’s Gupta files

2016-07-10 06:51

 

 

image

Former ANC MP, Vytjie Mentor. Picture: Gallo Images / Sunday Times / Esa Alexander

Former ANC MP Vytjie Mentor defied the ANC-led investigations into state capture by taking her dossier – detailing allegations of the existence of a corrupt relationship between the Gupta family and President Jacob Zuma – directly to the Hawks.

Mentor’s claims are contained in two sets of affidavits handed to the elite police unit in May and June.

This week Hawks head, Major-General Mthandazo Ntlemeza, confirmed to City Press that they were investigating a corruption-related case against the brothers Ajay, Atul and Rajesh (also known as Tony) Gupta.

However, on being approached by City Press about her submissions to the police, Mentor emphatically refused to respond, saying she did not wish to discuss the case in the media.

Those named as having been involved in the alleged wrongdoing in her documents, seen by City Press, include Zuma as well as Cabinet ministers Lynne Brown, Rob Davies and Nosiviwe Mapisa-Nqakula.

According to the statement made before Western Cape top cop Major-General Jeremy Veary, Mentor wrote: “I am of the conclusion that the Gupta family, the son of the president (Duduzane Zuma), and some ministers I have named in this statement – as well as the president, to a certain extent – all have [a] corrupt relationship that gives unfair advantage to the Gupta family and their associates at the expense of the state, using state resources and agencies all the way for their own benefit.”

Mentor states that, while she was working in Parliament between 2004 and 2009, the Gupta brothers had approached the Industrial Development Corporation (IDC) and secured a loan to establish a company that would partner with aerospace conglomerate Denel.

“The amount borrowed was R300 million … The Guptas were supposed to service the loan amount immediately.”

However, according to Mentor’s statement, this did not happen. As a result, “R300 million became R350 million that the Gupta brothers owed the IDC. They used the money to buy Oakbay Investments, which gave birth to Shiva Uranium and VR Laser,” she wrote in her statement.

Mentor’s allegations appear to be confusing the IDC loan that was made to Oakbay Resources for Shiva, and not for the Denel partnership, which was only made at the end of 2015.

Mentor further alleges that, instead of paying the IDC, the Guptas made a deal with the state entity to forego the loan in exchange for a minority shareholder stake at one of the Gupta companies.

IDC spokesperson Mandla Mpangase disputed the figures, saying: “The original loan was an amount of R250 million, which accrued R256 million in interest … [and] was specifically for the acquisition of Shiva Uranium mine. To date, R167.5 million (of the R250 million) has been paid to the IDC.”

Mpangase went on to say that the IDC “did not convert the original debt of R250 million that remains secured in the assets of the company”.

“However, we agreed to convert R256 million (of the accrued interest) into a 3.75% shareholding in Oakbay Energy Resources, based on an independent valuation of the company at the time.

“It is also important that we re-emphasise that our investment decisions were based purely on commercial [considerations],” Mpangase said.

Mentor also states that Shiva Uranium was “strategically placed to supply uranium to the government for a nuclear power plant that was still to be built”.

The Guptas told her that, through Shiva, they would “show the government how to build a nuclear plant, to which they would supply uranium”.

The brothers also told her she could “help them acquire contracts to supply Eskom with coal”.

In a wide-ranging interview with City Press this week, Ntlemeza said: “The investigation is moving very smoothly. I have combined complaints by the DA, the Congress of the People (Cope) and Mrs Mentor, and appointed a team of investigators.

“Shaun Abrahams (the National Prosecuting Authority head) gave the Hawks a prosecutor for guidance.”

He added that the deadline targeted for the investigation to be completed was December.

Asked whether it was not career limiting to investigate the friends of the president, who appointed the police minister who then appointed him, Ntlemeza said: “When I am investigating a case, I stick to my mandate, which is to serve without fear, favour or prejudice, no matter whose friend is involved. To me it is immaterial.”

Mentor states in her documents that she got to know the details because she had held several positions, including that of chairperson of Parliament’s caucus, as well as of the joint standing committee on intelligence, of the rules committee and of public enterprises.

She also argued that under Public Enterprises Minister Lynne Brown, the corrupt partnerships between Denel, VR Laser, Oakbay as well as Shiva Uranium were cemented.

“Under her, Denel Asia was formed with VR Laser, but Denel carries the capital and financial burden for that venture. The main profiteer at that company is the Gupta family.”

Brown’s spokesperson Colin Cruywagen said the minister “welcomes any investigation that will bring an end to all these false accusations. However, she also reserves her right to take action.”

Mentor’s documents were unclear as to what Trade and Industry Minister Rob Davies was alleged to have done wrong.

Mentor also detailed how, as early as 1994, the Guptas allegedly approached the ANC requesting to be introduced to then president Nelson Mandela and his then deputy, Thabo Mbeki.

“They (the Guptas) requested to be introduced to the leadership of [the] ANC and the government in Luthuli House,” the affidavit reads, adding that “they specifically wanted to meet [then] president Mandela, [then] deputy [president] Mbeki and [then minister] Essop Pahad. They were willing to donate R50 000 towards the ANC’s election [campaign].

“They eventually managed to meet with [then] minister Pahad in Luthuli House and they did donate R50 000,” she wrote.

Mentor stated that Pahad still had a relationship with the Guptas and was responsible for the content of their journal, called The Thinker.

“He (Pahad) was responsible for putting a Gupta brother [on] the board of the Brand SA government entity/agency,” the statement reveals.

This is now a matter of public record.

The affidavit also details how, after struggling to secure a meeting with President Jacob Zuma, Mentor was called by the Guptas.

“I struggled for two months to arrange a meeting with the president. I went to Tuynhuys (the president’s Cape Town office) with a letter requesting a meeting. I followed protocol in arranging the meeting. I also phoned Ms Lakela Kaunda (the presidency’s chief operations officer) at Luthuli House,” she said.

Mentor states that one Sunday evening after 10pm “on my official phone”, Kaunda called, saying a person would call her regarding setting up a meeting with the president. A man then phoned and made travel arrangements for Mentor to fly from Cape Town to Johannesburg.

“I was worried because I was on crutches and asked the man how I [would] travel. He assured me that my flight was already booked and transport [was] sorted out,” she wrote.

She arrived in Johannesburg and “two men dressed in black and dark glasses with ear-pieces”, driving a black vehicle ferried her. She thought she was being taken to the Union Buildings, but she was instead taken to Sahara Computers in Midrand.

She met one of the Gupta brothers, who spoke to her about her family and children. “I told him my son [was] playing cricket for Western Province. He then offered to buy a cricket bat, but I told him I [had] already bought my son a new cricket bat made of English wood.”

Mentor revealed in the affidavit that “he then hinted that the president was not available yet, because he [was] at that stage [attending] a meeting at Luthuli House. I became agitated and impatient because it was strange that this man [knew] about my visit and [seemed] to know the whereabouts of the president.”

After spending 45 minutes at Sahara, Mentor states that she thought they would be going straight to the Union Buildings for her meeting with the president.

Instead, they drove to a cluster mansion with big houses. It was a private complex. “After a while, the big brother [Ajay Gupta] arrived.” According to Mentor, he said that, as the chairperson of public enterprises, she was probably aware that Denel had been having legal problems in India. “I pretended to be aware, because I wanted to know more about this man.

“He also touched on my agenda with the president. I was very surprised and angry. He told me they [the Guptas] are very close to the Indian government.

“He spoke about the SAA … route between South Africa and India. He wanted me to commit myself to making a deal that [would] influence [the] SAA to stop flying between [South Africa] and India. He also said [I] could be minister of public enterprises in [a] week’s time, when [Zuma] reshuffles Cabinet and removes [minister of public enterprises] Barbara Hogan.”

“Asked how, the Gupta brother said he would put in a word with the president to appoint me. I was doubtful and he could see it. So he said that they [had] done it previously [and] I must just play along, meaning I must agree to influence SAA to stop the route.

“I requested in a loud voice to be taken back to the airport. At [that] time the president entered. When he walked in I stood up on my crutches to show him respect. The president remained standing and shook my hand, but this guy remained sitting and did not show respect to the president.

“Instead, as we [were] still exchanging pleasantries and greetings with the president, he interjected and offered the president food in a demeaning tone. This got me very angry. The president rejected the food offer, saying he would go and eat next door where his son lived,” she wrote.

Mentor said she told the president of what had transpired, but he remained calm and tried to calm her as well. “He was fatherly and apologised for all that I had been put through,” said Mentor.

The Gupta family have repeatedly and publicly denied these allegations. Atul Gupta was last week approached for comment, but did not respond to SMS messages and phone calls. Gupta family spokesperson Gary Naidoo also failed to respond to a list of questions at the time going to press. Despite undertaking to respond, the presidency has not replied to City Press’ enquiries.

City Press
2016-07-10 06:51

 

Former ANC MP, Vytjie Mentor. Picture: Gallo Images / Sunday Times / Esa Alexander
Related Links
Vytjie Mentor: ‘I sent my son to jail’
Vytjie Mentor calls for an independent probe into ‘state capture’
Newsmaker: Do the right thing — Mentor
Former ANC MP Vytjie Mentor defied the ANC-led investigations into state capture by taking her dossier – detailing allegations of the existence of a corrupt relationship between the Gupta family and President Jacob Zuma – directly to the Hawks.

Mentor’s claims are contained in two sets of affidavits handed to the elite police unit in May and June.

This week Hawks head, Major-General Mthandazo Ntlemeza, confirmed to City Press that they were investigating a corruption-related case against the brothers Ajay, Atul and Rajesh (also known as Tony) Gupta.

However, on being approached by City Press about her submissions to the police, Mentor emphatically refused to respond, saying she did not wish to discuss the case in the media.

Those named as having been involved in the alleged wrongdoing in her documents, seen by City Press, include Zuma as well as Cabinet ministers Lynne Brown, Rob Davies and Nosiviwe Mapisa-Nqakula.

According to the statement made before Western Cape top cop Major-General Jeremy Veary, Mentor wrote: “I am of the conclusion that the Gupta family, the son of the president (Duduzane Zuma), and some ministers I have named in this statement – as well as the president, to a certain extent – all have [a] corrupt relationship that gives unfair advantage to the Gupta family and their associates at the expense of the state, using state resources and agencies all the way for their own benefit.”

Mentor states that, while she was working in Parliament between 2004 and 2009, the Gupta brothers had approached the Industrial Development Corporation (IDC) and secured a loan to establish a company that would partner with aerospace conglomerate Denel.

“The amount borrowed was R300 million … The Guptas were supposed to service the loan amount immediately.”

However, according to Mentor’s statement, this did not happen. As a result, “R300 million became R350 million that the Gupta brothers owed the IDC. They used the money to buy Oakbay Investments, which gave birth to Shiva Uranium and VR Laser,” she wrote in her statement.

Mentor’s allegations appear to be confusing the IDC loan that was made to Oakbay Resources for Shiva, and not for the Denel partnership, which was only made at the end of 2015.

Mentor further alleges that, instead of paying the IDC, the Guptas made a deal with the state entity to forego the loan in exchange for a minority shareholder stake at one of the Gupta companies.

IDC spokesperson Mandla Mpangase disputed the figures, saying: “The original loan was an amount of R250 million, which accrued R256 million in interest … [and] was specifically for the acquisition of Shiva Uranium mine. To date, R167.5 million (of the R250 million) has been paid to the IDC.”

Mpangase went on to say that the IDC “did not convert the original debt of R250 million that remains secured in the assets of the company”.

“However, we agreed to convert R256 million (of the accrued interest) into a 3.75% shareholding in Oakbay Energy Resources, based on an independent valuation of the company at the time.

“It is also important that we re-emphasise that our investment decisions were based purely on commercial [considerations],” Mpangase said.

Mentor also states that Shiva Uranium was “strategically placed to supply uranium to the government for a nuclear power plant that was still to be built”.

The Guptas told her that, through Shiva, they would “show the government how to build a nuclear plant, to which they would supply uranium”.

The brothers also told her she could “help them acquire contracts to supply Eskom with coal”.

In a wide-ranging interview with City Press this week, Ntlemeza said: “The investigation is moving very smoothly. I have combined complaints by the DA, the Congress of the People (Cope) and Mrs Mentor, and appointed a team of investigators.

“Shaun Abrahams (the National Prosecuting Authority head) gave the Hawks a prosecutor for guidance.”

He added that the deadline targeted for the investigation to be completed was December.

Asked whether it was not career limiting to investigate the friends of the president, who appointed the police minister who then appointed him, Ntlemeza said: “When I am investigating a case, I stick to my mandate, which is to serve without fear, favour or prejudice, no matter whose friend is involved. To me it is immaterial.”

Mentor states in her documents that she got to know the details because she had held several positions, including that of chairperson of Parliament’s caucus, as well as of the joint standing committee on intelligence, of the rules committee and of public enterprises.

She also argued that under Public Enterprises Minister Lynne Brown, the corrupt partnerships between Denel, VR Laser, Oakbay as well as Shiva Uranium were cemented.

“Under her, Denel Asia was formed with VR Laser, but Denel carries the capital and financial burden for that venture. The main profiteer at that company is the Gupta family.”

Brown’s spokesperson Colin Cruywagen said the minister “welcomes any investigation that will bring an end to all these false accusations. However, she also reserves her right to take action.”

Mentor’s documents were unclear as to what Trade and Industry Minister Rob Davies was alleged to have done wrong.

Mentor also detailed how, as early as 1994, the Guptas allegedly approached the ANC requesting to be introduced to then president Nelson Mandela and his then deputy, Thabo Mbeki.

“They (the Guptas) requested to be introduced to the leadership of [the] ANC and the government in Luthuli House,” the affidavit reads, adding that “they specifically wanted to meet [then] president Mandela, [then] deputy [president] Mbeki and [then minister] Essop Pahad. They were willing to donate R50 000 towards the ANC’s election [campaign].

“They eventually managed to meet with [then] minister Pahad in Luthuli House and they did donate R50 000,” she wrote.

Mentor stated that Pahad still had a relationship with the Guptas and was responsible for the content of their journal, called The Thinker.

“He (Pahad) was responsible for putting a Gupta brother [on] the board of the Brand SA government entity/agency,” the statement reveals.

This is now a matter of public record.

The affidavit also details how, after struggling to secure a meeting with President Jacob Zuma, Mentor was called by the Guptas.

“I struggled for two months to arrange a meeting with the president. I went to Tuynhuys (the president’s Cape Town office) with a letter requesting a meeting. I followed protocol in arranging the meeting. I also phoned Ms Lakela Kaunda (the presidency’s chief operations officer) at Luthuli House,” she said.

Mentor states that one Sunday evening after 10pm “on my official phone”, Kaunda called, saying a person would call her regarding setting up a meeting with the president. A man then phoned and made travel arrangements for Mentor to fly from Cape Town to Johannesburg.

“I was worried because I was on crutches and asked the man how I [would] travel. He assured me that my flight was already booked and transport [was] sorted out,” she wrote.

She arrived in Johannesburg and “two men dressed in black and dark glasses with ear-pieces”, driving a black vehicle ferried her. She thought she was being taken to the Union Buildings, but she was instead taken to Sahara Computers in Midrand.

She met one of the Gupta brothers, who spoke to her about her family and children. “I told him my son [was] playing cricket for Western Province. He then offered to buy a cricket bat, but I told him I [had] already bought my son a new cricket bat made of English wood.”

Mentor revealed in the affidavit that “he then hinted that the president was not available yet, because he [was] at that stage [attending] a meeting at Luthuli House. I became agitated and impatient because it was strange that this man [knew] about my visit and [seemed] to know the whereabouts of the president.”

After spending 45 minutes at Sahara, Mentor states that she thought they would be going straight to the Union Buildings for her meeting with the president.

Instead, they drove to a cluster mansion with big houses. It was a private complex. “After a while, the big brother [Ajay Gupta] arrived.” According to Mentor, he said that, as the chairperson of public enterprises, she was probably aware that Denel had been having legal problems in India. “I pretended to be aware, because I wanted to know more about this man.

“He also touched on my agenda with the president. I was very surprised and angry. He told me they [the Guptas] are very close to the Indian government.

“He spoke about the SAA … route between South Africa and India. He wanted me to commit myself to making a deal that [would] influence [the] SAA to stop flying between [South Africa] and India. He also said [I] could be minister of public enterprises in [a] week’s time, when [Zuma] reshuffles Cabinet and removes [minister of public enterprises] Barbara Hogan.”

“Asked how, the Gupta brother said he would put in a word with the president to appoint me. I was doubtful and he could see it. So he said that they [had] done it previously [and] I must just play along, meaning I must agree to influence SAA to stop the route.

“I requested in a loud voice to be taken back to the airport. At [that] time the president entered. When he walked in I stood up on my crutches to show him respect. The president remained standing and shook my hand, but this guy remained sitting and did not show respect to the president.

“Instead, as we [were] still exchanging pleasantries and greetings with the president, he interjected and offered the president food in a demeaning tone. This got me very angry. The president rejected the food offer, saying he would go and eat next door where his son lived,” she wrote.

Mentor said she told the president of what had transpired, but he remained calm and tried to calm her as well. “He was fatherly and apologised for all that I had been put through,” said Mentor.

The Gupta family have repeatedly and publicly denied these allegations. Atul Gupta was last week approached for comment, but did not respond to SMS messages and phone calls. Gupta family spokesperson Gary Naidoo also failed to respond to a list of questions at the time going to press. Despite undertaking to respond, the presidency has not replied to City Press’ enquiries.

South African public prosecutor wants fund to probe Gupta-Zuma links

Reuters

South African Public Protector Thuli Madonsela said on Tuesday she wants more resources to investigate whether President Jacob Zuma allowed a wealthy business family to decide on cabinet appointments.

The scandal surrounding the Gupta family took a dramatic turn earlier this year after deputy finance minister Mcebisi Jonas said they had offered him his boss’s job, an allegation that led to calls for Zuma to resign.

Madonsela told reporters she was looking at “specifically whether or not the government of South Africa and specifically the president unlawfully allowed the Gupta family to choose ministers and other occupants of high office.”

Zuma has denied Jonas’ claims, saying only the president appointed ministers, in line with the constitution. The Guptas have denied influencing Zuma, saying they were pawns in a political plot against the president.

When it first broke, the affair threatened to shake Zuma’s hold on his ruling African National Congress party. But the president won the backing of its top decision-making group, which is stacked with his loyalists, and the party has since set aside the Gupta issue.

Madonsela, the country’s anti-corruption watchdog, did not say what additional resources she required to carry out the investigation, which she said she hoped to complete before her term ends in October.

The Public Protector’s office was also investigating whether there was “unlawful awarding of government contracts and licenses to the Gupta businesses”, she said.

The Guptas, who moved to South Africa from India after apartheid fell in 1994, run businesses ranging from uranium and coal mining to media and information technology.

DEATH THREATS

Madonsela has received public support in South Africa for taking Zuma to task over the 240 million rand ($16 million) of state money spent upgrading his private home.

She was vindicated in March when the Constitutional Court, the highest court in the land, said Zuma had breached the constitution by ignoring her recommendation that he repay some money that was spent on non-security upgrades. Zuma has since then agreed to hand back some of the funds.

Madonsela said she was also investigating whether a surveillance unit set up at the national revenue service was above board. The revenue agency was led at the time by Finance Minister Pravin Gordhan.

Police have said they are not investigating Gordhan as part of their probe into the activities of the spy unit. Madonsela said her office was “wrapping up” its investigation of the unit, but gave no details.

She said although she had faced death threats, smear campaigns by targets of her investigative work and claims by some politicians that she was a CIA spy, she had no regrets about taking on the job.

“There are a few deviants who decide to play the person as opposed to the ball. They know we don’t make the rules – we enforce them,” she said.

“More recently it has been a case of setting a fire behind the guardians of democracy or the watchdogs. so then you are distracted by the fire behind your back.”

($1 = 14.8209 rand)

(Additional reporting by Tanisha Heiberg; Editing by James Macharia and Mark Trevelyan)

South Africa – Mantashe attacks banks over closure of Gupta accounts

Mail and Guardian

Mantashe stressed that the Reserve Bank must answer for the banks’ decision – even though it said last month that it would not get involved.

ANC secretary general Gwede Mantashe. (Oupa Nkosi, M&G)

ANC secretary general Gwede Mantashe said he was worried that the decision by South Africa’s top four banks to close the accounts of the Gupta-owned Oakbay Investments could become a trend of collusion between financial institutions.

Such a trend would involve the collusion of financial institutions to destroy small companies that posed a threat to bigger companies, he said.

Mantashe appeared to disagree with the approach of his comrades in Cabinet, who last month established a ministerial committee to intervene with the country’s major four banks, Standard Bank, Absa, First National Bank and Nedbank, on behalf of the Gupta’s Oakbay Investments.

Instead the ANC boss said the Reserve Bank – which regulates financial institutions in the country – must answer questions about the banks’ decision.

“[The Reserve Bank must tell us] is this [the decision by the four banks] a collision, or is it an order from the regulator because the regulator has the power to do so? What actually translated to this and that? [For] me, If I was in the government task team, that’s where I would start – with the regulator – and ask: ‘What’s happening here? How is it possible that all the banks [can] take the same decision, at the same time?’,” Mantashe said.

He added that the banks were obliged to disclose information to the Reserve Bank and law enforcement agencies should they expect illegal or irregular activity regarding the now closed accounts.

However, the Reserve Bank told the Mail & Guardian in April already that it would not get involved in the dispute.

The central bank also distanced itself from the ministerial committee. “The South African Reserve Bank (SARB) is not part of the ministerial committee,” Bulelwa Boqwana, the Reserve Bank’s chief of staff said.

“As a prudential regulator, the SARB regulates and supervises the prudential requirements of commercial banks. The SARB is not in a position to get involved in differences between banks and their clients.”

While Mantashe is one of the ANC politicians who have previously raised concerns about the Gupta family’s perceived influence on senior ANC politicians and government officials, he said he found “the coordinated efforts” by the financial institutions against the family strange.

“From where I’m sitting, I get worried where the economy is still dominated by white monopoly capital – where they can actually collude to destroy smaller companies. That would be a threat to me. The biggest threat out of this, it’s not about a particular family, it’s the threat overall of the ability of banks to close accounts for smaller companies if they posed a threat to big companies. What happened between the bank and the client has nothing to do with us, but the implications are far-reaching if you look at them in detail,” said Mantashe.

Barclays Africa turns down meeting with ministerial task team
On Wednesday evening Reuters reported that South African lender Barclays Africa had turned down a meeting with the ministerial team appointed to resolve the stand-off between the banks and Oakbay Investments.

“We confirm receipt of an invitation to a meeting from the office of the Minister of Mineral Resources on behalf of the inter-ministerial committee announced by Cabinet,” Barclays Africa said. “We have respectfully declined on account of client confidentiality.”

Although the Guptas’ relationship with Zuma has been a source of controversy for years, it burst into the open last month when senior figures said the family had exerted undue sway, including offering cabinet positions.

Zuma has acknowledged the Guptas are his friends, but denies anything improper. The Guptas, whose wide range of business interests include media and mining, have denied the allegations and say they are pawns in a plot to oust Zuma.

Nedbank, a unit of Anglo-South African insurer Old Mutual, said it would approach any meeting with government constructively, but would not discuss banking relationships of any client.

The government team, which also includes Finance Minister Pravin Gordan and Labour Minister Mildred Oliphant, is due to report back on its progress at this week’s cabinet meeting, Minister in the Presidency Jeff Radebe told Reuters.

Oakbay Investments’ Chief Executive Officer Nazeem Howa has said the company would not be able to pay its workers from June 7 if it cannot restore banking relations.

Other companies that have severed ties with the companies in recent months include the local unit of KPMG and fleet management company Eqstra.

Oakbay Investments did not immediately respond to requests for comment. – Additional reporting by Reuters