Tag Archives: South Africa

South Africa – ANC enslaved by struggle habits

Mail and Guardian

Dated: The youth base their vote on whether a party can deliver a just South Africa, not on struggle credentials. Photo: Mujahid Safodien/AFP
Dated: The youth base their vote on whether a party can deliver a just South Africa, not on struggle credentials. Photo: Mujahid Safodien/AFP

There is no compelling reason for the ANC to remain enslaved by liberation struggle habits. Almost 23 years into democracy it is time for the governing party to habituate itself to new political ways of being.

Take the cringeworthy way in which the battle for the leadership of the ANC is (not) unfolding. The party leadership pretends there isn’t already a debate raging in its ranks about who should be elected to the top positions in the party later this year.

Lobbying has started already. Factions have already emerged. Former political foes within the tripartite alliance have started, behind the scenes, to co-operate with each other to ensure their slates might have the best chance of being elected. Horse trading is well under way.

So why on earth is the party leadership telling its members, the media and the public not to talk of succession?

A vow of silence doesn’t help to ensure cohesion within the party. Differences about who should lead and what the next vision and plan for the country’s future is to take to the electorate in 2019 aren’t going away just because you are not debating these issues openly and publicly.

There is no legitimate fear about letting candidates speak in the first person, own their ambition and make a case for their fitness to hold office within the party and ultimately within the state.

There is no reason why the party shouldn’t embrace transparency.

There are two parts to the party’s misplaced attitude towards open contestation for leadership positions. The first is that this attitude is rooted in the fairly opaque nature of liberation-era politics. When you are fighting a monster like the powerful and immoral apartheid state, maximum transparency can be costly in the fight for freedom.

Liberation movements need a mix of limited freedoms in their deepest structures — because ideas still need to be debated to ensure the best ones guide the fight for freedom — but also an acceptance of a degree of command structured leadership. Liberation movements aren’t wholly opaque, of course. But they certainly aren’t blueprints for what political parties should aim at in a democratic culture premised on deliberation and participation.

The ANC’s current leadership sounds archaic in its insistence that no one should talk about leadership succession. They are showing us how hard it is to teach old political dogs new tricks. The awkward truth of course is that the ANC never really got the point of internal democratic culture. It fears democratic habits rather than embracing them as a means to choosing the brightest and the best to lead the party and the country.

And that is why the party makes a bizarre distinction between debating the ideal traits one wants in a leader, and directly naming and evaluating actual candidates for these positions that will soon be vacant. This is disingenuous.

Not least because in reality ANC members are already doing both: thinking about what kind of leadership it needs as our country marches towards the next general election, and who should be elected to that leadership structure.

The second issue here is a continued refusal to make full sense of the thumping that the party received in the local elections last year. The youth are disproportionately affected, as a demographic, by the stubbornly high levels of unemployment and low economic growth that will remain features of our economy for a while yet.

Young people have disproved the lie that they are apolitical. They are engaged. They are protesting. They are deeply committed to justice and fighting exclusion. That is why we see protests in the academy and also why many unemployed young people are often visibly present in service-delivery protests.

A crucial characteristic of this demographic that the ANC isn’t paying enough attention to is weak loyalty to any one of the main political parties. Struggle memory has little effect on their political orientation. They want a responsive state that is demonstrably committed to bringing about a more just South Africa regardless of who it is that is in charge of that state.

The implication for the ANC is that liberation-era habits that have no resonance with this increasingly younger set of active citizens is a recipe for failure. The party needs to embrace the structural changes in how society works that have become everyday reality over the past 20 years.

These includes technological and social changes that must influence the party’s internal processes and habits if they are to remain relevant.

Unlike in the Sixties, Seventies and Eighties, we now have digital identities and online platforms that facilitate the free flow of information and continuous 24-hour debate between citizens. In that context you cannot control the minds of citizens. They know too much. They have more agency than ANC elders had. They can organise easily.

The ANC must embrace modernity and accept that the world has changed irrevocably since demo-cracy’s dawn. Voters are not blank slates onto which the ANC can spray archaic political rhetoric. The ANC must embrace transparency and open contestation.

After all, the struggle was for democracy, wasn’t it?

South Africa – how Guptas laundered kickbacks millions

Huffington Post

Guptas ‘Laundered’ Kickback Millions — Here’s The Evidence

A year-long investigation points to an intricate system President Jacob Zuma’s friends, the Gupta family, allegedly used to extract bribes from companies doing business with a state institution.

08/12/2016

Evidence of millions flowing to a Gupta company has tied the family directly to an apparent racket of shaking down companies that sought state contracts.

For more than a year, amaBhungane has investigated how a letterbox company called Homix secreted away hundreds of millions; apparent kickbacks from companies doing business with Transnet, the state-owed transport operator.

There were signs all along that this had something to do with the Guptas. Homix’s self-proclaimed chief executive used to manage a Gupta company. Some of the money flowed to a Hong Kong firm that shared an address with a Gupta lieutenant’s companies.

Now, papers filed in the High Court in Johannesburg have provided direct evidence of Gupta involvement: after Homix was exposed, a seemingly round 10% of the first year’s fee on another big Transnet contract flowed to Gupta-owned TNA Media.

The amount, R17,1 million, was allegedly laundered through two companies on the strength of a backdated contract and bogus invoices before arriving at TNA, which publishes The New Age, court papers show.

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The latest evidence adds substance to the claim at the centre of the “state capture” debate: that the Guptas squeeze kickbacks from companies doing business with the state by using their political connections and officials they have deployed or bought.

We fully respect genuine media enquiries but will no longer reply to … amaBhungane.Gupta family

The Gupta family did not reply to questions this week, saying via a spokesperson: “AmaBhungane has consistently printed innuendo, speculation and lies about the Gupta family, its businesses and its friends. We have replied in good faith many times, but still suffer from total rubbish being printed. We fully respect genuine media enquiries but will no longer reply to … amaBhungane.”

Transnet denied wrongdoing, saying it was “confident in [our] processes”.

The emergence of Homix

The story so far starts in early 2014 when Homix made contact with telecoms provider Neotel. In a letter, it offered to land Neotel a Transnet IT equipment contract — in return for which it wanted 10% of the contract value.

Despite internal misgivings, Neotel paid Homix R35 million and landed the contract, worth over R300 million.

During August 2014, an even bigger prize came up. Transnet nominated Neotel as preferred bidder in a tender for a wide suite of network services, saying that it would get the contract if terms could be agreed by a December deadline.

With two weeks to go, Transnet withdrew from the negotiations without giving reasons, according to information from an investigation later ordered by Neotel’s board. In apparent desperation, Neotel reached out to Homix again.

A single person used to come in irregularly, generally after hours.

A Neotel employee told the board’s investigators that Homix again demanded 10%. Neotel bargained it down to 2% of the R1.8 billion contract value — R41 million including VAT.

Transnet returned to the negotiating table and Neotel got the contract.

There can be little doubt the payments were kickbacks. Homix was not a sophisticated consulting business whose work could justify millions in fees. When amaBhungane visited its Wierda Park, Centurion office address last year, we found a locked blue door abutting a latrine in a neglected office block.

amaBhungane

amaBhungane

A neighbour said a single person used to come in irregularly, generally after hours.

Homix’s only registered director, Yakub Bhikhu, was hard to trace. When someone claiming to be him finally answered a phone number stuck to the blue door, he did not respond to questions.

However, when the Neotel investigators started asking questions, one Ashok Narayan identified himself as Homix’s chief executive and tried unsuccessfully to convince them that the company had done real work for Neotel.

Narayan was a former managing director of Gupta IT company Sahara Systems.

amaBhungane

The Homix laundry

Homix bank records later seen by amaBhungane confirmed the impression that it was a front to launder kickbacks, not a legitimate business.

The records showed minimal office and no salary expenses. But they did show money flowing in and out of Homix at an astounding rate: R144 million in and R189 million out over just six months.

The inflows consisted largely of transfers from Neotel and four other companies, each of which benefited from Transnet contracts.

Almost all of the outflows went to Bapu Trading, a company more obscure even than Homix. There the trail went cold.

But a month later, in May 2015, Homix made 16 transfers totalling about R66 million to two Hong Kong companies, according to an official report seen by amaBhungane.

The Reserve Bank got suspicious, as the outflows did not match claimed imports. It froze the last three transfers at the end of that month.

One of the two Hong Kong companies on the receiving end, Morningstar International Trade, shares a registered address with companies formed by Gupta lieutenant Salim Essa.

“Confinement” is Transnet’s term for appointing a supplier without a competitive tender.

CCTV contracts

During this entire history, two more very large contracts came up at Transnet, this time to install CCTV cameras at ports. Again they went to Neotel, and again 10% appears to have been laundered.

But this time it ended discernably in a Gupta account. It went like this:

In May 2014, Transnet approved the confinement of the first CCTV contract, worth R329 million, to Neotel. “Confinement” is Transnet’s term for appointing a supplier without a competitive tender.

Nine months later, on February 20, 2015, Transnet management recommended confining a second CCTV contract to Neotel too, Transnet procurement records show.

The timing was interesting. The day before, Neotel records show, Neotel had signed a “business consultancy agreement” with Homix finally to give effect to its promise to pay Homix R41 million to get the unrelated Transnet network services contract.

Transnet notified Neotel that it had won the second CCTV contract, worth another R505 million over three years, at the end of March 2015, Neotel records show. Two weeks later Transnet formally placed the order with Neotel.

Neotel in turn subcontracted a CCTV specialist company, Technology and Procurement Holdings, better known as Techpro.

Homix exposed

If Neotel or Techpro had promised a kickback on this latest contract too, paying it via Homix would have been risky.

In mid-April 2015, when Transnet placed the CCTV order, Neotel’s auditors were crawling all over the earlier Homix payments. They blew the whistle to Neotel’s board, which commissioned an investigation that ultimately led to Neotel’s chief executive and chief financial officers resigning.

And the air was not about to clear. By the end of April, Neotel’s auditors had reported the Homix payments to the Independent Regulatory Board for Auditors, which in time notified other authorities, including the Hawks.

By the end of May, the Reserve Bank had frozen Homix’s remittances to Hong Kong.

Wanted: a new kickback channel

So if a kickback could not be paid via Homix, then who?

The answer appears to lie in the dirty washing of financial advisory firm Regiments Capital, hung out to dry in rancorous litigation between its directors at the Johannesburg High Court.

On June 4, 2015, days after the Reserve Bank froze Homix’s transfers to Hong Kong, Wood received an email from Narayan — the former Gupta manager and self-identified Homix chief executive.

Directors Litha Nyhonyha and Niven Pillay on the one hand, and Eric Wood on the other, fell out after Wood sided with the Guptas and Essa when a Gupta offer to buy Regiments fell through.

Though Wood joined Essa in the competing Trillian Capital Partners this year, the two sides are still trying to have each other removed from Regiments’ board.

In an affidavit filed last month, Nyhonya describes, and attaches, evidence he says was discovered after Wood left.

What it shows is this:

On June 4, 2015, days after the Reserve Bank froze Homix’s transfers to Hong Kong, Wood received an email from Narayan — the former Gupta manager and self-identified Homix chief executive.

Narayan asked Wood to get Regiments to invoice Techpro, the Neotel CCTV subcontractor, for R17,1 million. Wood complied.

The next day Narayan emailed Wood again, attaching three invoices, also totaling R17,1 million, from TNA, the Gupta media company, to Regiments. The TNA invoices purported to be for Regiments advertising in The New Age.

Next, Narayan emailed Wood an agreement purporting to be between Regiments and Techpro. It was already signed by Techpro and backdated five months to January 2015.

The agreement provided justification, on paper at least, for the Techpro payments to Regiments, saying Regiments would do “cost analysis and financial modelling” for Techpro “in respect of the second phase of CCTV installation at Transnet”.

amaBhungane

‘Fictitious transactions’

Nyhonyha states in his affidavit that Regiments did not advertise in The New Age and that Regiments did not provide the claimed services to Techpro. Wood, he charged, “knowingly allowed Regiments to be used as a conduit for an entirely fictitious set of transactions” to launder money from Techpro to TNA.

Wood denies this, saying his version will be provided when he files a replying affidavit.

But Nyhonyha’s version is supported not only by the emails, invoices and backdated contract annexed to his affidavit, but also by a Regiments bank statement which shows the symmetrical flow of R17,1 million from Techpro to Regiments and Regiments to the Gupta company on two consecutive days.

When the R17,1 million washed up at TNA, it not only swelled the Guptas’ purse but gave the clearest indication yet that they were the true beneficiaries of the Homix kickback laundry.

The backdated contract, perhaps carelessly in retrospect, tied the R17.1 million payment to the second Transnet CCTV contract. The amount also ties back neatly back to it.

Neotel records show that it recognised R150 million in revenue immediately on getting the contract from Transnet.

R17,1 million — R15 million excluding VAT — is a round 10% of that first year’s revenue.

And so, when the R17,1 million washed up at TNA, it not only swelled the Guptas’ purse but gave the clearest indication yet they may have been the true beneficiaries of the Homix kickback laundry.

amaBhungane

Responses

Narayan and Essa did not respond to requests for comment.

Wood said via a spokesperson: “Suffice to say that all of the allegations made by his former partners are strenuously denied and will be comprehensively traversed in his answer to the court papers which his attorneys are presently preparing on his behalf and which will be filed in short order.

“It would be improper and possibly prejudicial to his case to answer your questions prior to the filing of his answer.”

He also said he “would advise that these matters” be left to an independent investigation led by Advocate Geoff Budlender, appointed by Trillian chair Tokyo Sexwale.

“As you can imagine it is quite a shock getting this kind of information and we’ve sent it to [our attorneys] to investigate further.”

Techpro manager Craig Smith said about the allegations contained in the court papers: “As you can imagine it is quite a shock getting this kind of information and we’ve sent it to [our attorneys] to investigate further.”

He added: “Whether the insinuations that you are making are true or not true I don’t know…. If there is wrongdoing we want to know about it.”

Neotel chair Kennedy Memani said that during the company’s initial investigation the board “took all the necessary steps on the basis of what came out”.

He said he did not want “to go back to that debate … unless anything else comes out”.

A Transnet spokesperson said the company was “confident in its processes… In addition, Transnet was advised by Neotel that an independent investigation commissioned by Neotel revealed no wrongdoing or corruption by Transnet or any of our executives”.

“Please note that Homix is not a Transnet supplier. All matters related to Homix should be directed to Neotel. Transnet has never engaged with Homix or its executives.”

He said the confinement of the CCTV contracts was justified by Transnet’s urgent need to replace outdated CCTV equipment to comply with international standards and not lose its status as a ports authority. Neotel was chosen as service provider as the existing infrastructure belonged to Neotel and “the need to integrate new and existing equipment and systems was crucial”.

The amaBhungane Centre for Investigative Journalism, an independent non-profit, produced this story. Like it? Be an amaB supporter to help it do more. Sign up for its newsletter to get more.

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MORE: Gupta Gupta Money Laundering Evidence News

South Africa amaHlubi king’s game of thrones

City Press

2016-12-02 18:47

The self-proclaimed king of the amaHlubi clan, Eshowe businessman Bryce Mthimkhulu, faces arrest after defying a court interdict last weekend that bans him from referring to himself as a king.

The provincial cooperative governance MEC Nomusa Dube-Ncube went to court seeking an order to stop Mthimkhulu from continuing to act as a monarch. His rival for the title, Muziwenkosi Johannes Radebe of Estcourt, also known as King Langalibalele II, also secured a similar order against Mthimkhulu from the same court on Friday.

Several thousand members of the amaHlubi clan participated in an Umkhosi wokwe shwama (celebrating first fruits) ceremony presided over by Mthimkhulu at his family home at Mbongolwana near Endumeni in Zululand last weekend. This was despite the interdict granted by the Pietermaritzburg High Court last Friday.

In terms of the court order, Mthimkhulu should not use the title, appoint amakhosi [chiefs] or izinduna [headmen] or carry out any other activity aligned to the leadership of the amaHlubi clan.

The defiant Mthimkhulu claims to be a descendant of AmaHlubi King Mthimkhulu II, also known as Ngwadlazibomvu, who ruled between 1800 and 1818. He ignored the court order and went ahead with a gala dinner on Friday night at his family homestead.

Mthimkhulu also embarrassed the government in 2014 by lodging a massive land claim “on behalf of the amaHlubi”, covering most of South Africa’s eastern seaboard.

Rival Inkosi Musawenkosi Radebe (Langalibalele II) of Estcourt.

He told City Press on Wednesday that he would continue with his activities, which include pushing for a land claim to be resolved. He and his supporters want compensation for the loss of the amaHlubi nation’s ancestral land and livelihood. They argue that this happened after their kingdom was obliterated and King Langalibalele was imprisoned on Robben Island in 1875 following the battle of Bushman’s Neck. Mthimkhulu has appointed a team to quantify the claim.

Mthimkhulu also set up several business ventures on behalf of the amaHlubi – including a HlubiMobile cellular network that allows users free calls to other Hlubis registered on the network. He said all his business initiatives were continuing in spite of the threats from provincial department of cooperative governance and traditional affairs (Cogta).

“Everything is legitimate and in place. I wish you were here to see this,” said the flamboyant Mthimkhulu. “We have initiatives in agriculture and we are busy training young people in various skills projects. The mobile telephone initiative is going well and we have several other new initiatives that we are looking at.

“We recently held a meeting to consolidate our assessment of the extent of the land claim and are getting ready to press ahead with that. Things are absolutely on track here.”

He vowed that the provincial government would not arrest him. “It will never happen … I have been recognised by Cogta nationally and by international forums of traditional leaders. Cogta in KwaZulu-Natal is acting in a partisan manner because of our land claim and the contestation with King Goodwill Zwelithini. That is the crux of the matter here,” he said.

However, Lennox Mabaso, spokesperson for Dube-Ncube, said the court order would be enforced and that harsher measures would be taken against Mthimkhulu.

Mabaso said they had received complaints from community members and other traditional leaders
in the province that Mthimkhulu had been acting as a “self-appointed king” and had been creating confusion by appointing izinduna and amakhosi illegally.

“As a government department that oversees traditional institutions in KwaZulu-Natal, it is our duty to protect the integrity of these institutions and the legitimacy of all recognised royalty,” he said.

“The conduct of this individual is in direct violation of the legislation that governs the recognition of traditional leaders.

“Neither the president nor the premier has recognised this individual in any capacity,” Mabaso said.

“We are collating evidence and analysing references to him as king or traditional leader and studying his pronouncements to verify if there is contempt of court. We are also checking to see if the police managed to serve him the interdict on Friday,” he said.

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South Africa – COSATU says Minerals Minister Zwane must go

News24

2016-11-24 21:07

Cosatu deputy general secretary Bheki Ntshalintshali (Netwerk24)

Cosatu deputy general secretary Bheki Ntshalintshali (Netwerk24)

Johannesburg – Minerals and Energy Minister Mosebenzi Zwane must go, labour federation Cosatu has said.

Cosatu has slated Zwane for allegedly sowing division and failing to lead.

“He is a weak and polarising figure that has failed to deal with the biggest issues, like retrenchments, illegal mining and ongoing violence,” general secretary Bheki Ntshalintshali told the media on Thursday.

The federation held its central executive committee (CEC) meeting from Monday to Wednesday where it concluded that it had no confidence in the minister.

Ntshalintshali said if Zwane doesn’t step down “then he must be dismissed”.

Statistician General Pali Lehohla announced on Tuesday that the mining sector alone shed 9 000 jobs in the third quarter of 2016 after two successive quarterly losses.

‘Collusion with unions’

A Cosatu official told News24 that they were told by some shop stewards that Zwane was working with rivals the Association of Mineworkers and Construction Union (Amcu). He alleged Zwane was meeting them secretly ahead of joint meetings to resolve the continuing tensions at several mines that have led to the deaths of several mineworkers.

“His collusion with other unions to isolate and attack the National Union of Mineworkers (NUM) was the last straw for the CEC,” Ntshalintshali said.

Despite repeated attempts to get hold of Zwane, he could not be reached for comment.

NUM general secretary David Sipunza, who was not attending the CEC, confirmed that Zwane failed to meet with them on numerous occasions to deal with some of the crises in the industry, especially the killings in the mine sector.

Another Cosatu affiliate leader told News24 that members of the CEC were also infuriated by Zwane’s lack of action at Lily Mine in Barberton where three mineworkers remain trapped since a shaft collapse nine months ago despite a continued campaign by Cosatu and NUM.

The families of Solomon Nyarenda, Yvonne Mnisi and Pretty Nkambule have still not received money promised by Zwane following the tragedy in February.

It is understood the Cosatu CEC also discussed other ministers including Health Minister Aaron Motsoaledi with regards to the “collapse” of the National Health Insurance.

Support for judicial inquiry

“However it was felt Zwane had failed dismally, instead of dealing with the crisis in the mining industry, he was trying to resolve the Gupta family’s bank problems,” the official said.

President Jacob Zuma has previously reprimanded Zwane and the minister apologised for releasing a statement saying that Cabinet had called for a judicial inquiry into the closure of Gupta company accounts by four banks.

Zwane also courted controversy earlier this month when he tried to interdict the release of former Public Protector Thuli Madonsela’s State of Capture report.

Cosatu has supported her recommendation for a judicial inquiry.

“The meeting supported the call for a judicial inquiry to look into the alleged corruptive relationship between President Jacob Zuma and other Cabinet ministers and the Gupta family,” Ntshalintshali said.

He however would not be drawn into comment on Zuma’s statement in the National Assembly on Wednesday that he would not “jump to establish an inquiry”. Zuma said Madonsela’s report was unfair.

Cosatu wants the scope of “state capture” investigations extended as more government institutions are “captured”.

Read more on:    cosatu  |  mosebenzi zwane  |  jacob zuma

South Africa – Madonsela: “Some do not want the truth to come out”

News24

2016-11-08 09:11

Thuli Madonsela (Amanda Khoza, News24)

Thuli Madonsela (Amanda Khoza, News24)

Durban – Former Public Protector Thuli Madonsela on Monday night declined to comment after the ANC Youth League called her a drama queen and said she needed to “rest in peace”.

“I knew that there were those who’d rather the truth never come to light, and I knew that those that don’t want the truth to come to light would be angry with me, there is nothing that I can do about that,” said Madonsela.

She was speaking at the 2016 Mahamta Gandhi Awards at the Durban City Hall, where she received The Second Satyagraha Award for her tremendous contribution during her tenure as the Public Protector.

During a press briefing on Monday, the ANC Youth League reportedly called Madonsela “a drama queen” that needed “to rest in peace”.

The league criticised Madonsela’s explosive State of Capture report, saying she had used it to “further enhance the agenda of the Democratic Alliance”.

“The ANC Youth League has noted that the drama queen has left the office and therefore remains not busy these days.

“As the ANCYL, we want to wish her well in her DA endeavours. Now that she’s resting, can she rest in peace.” ANCYL spokesperson, Mlondi Mkhize, was quoted as having said by eNCA.

‘I have done the best that I could’

Speaking on the sidelines of the awards ceremony, Madonsela said she did not really have a response to the ANCYL’s utterances.

“I know that I have done the best that I could as a human being with the State of Capture report, but I also had no illusions as we completed this report. I knew that there would be people who would be happy that this would strengthen our Constitutional democracy and shed some light on a very difficult issue.”

Madonsela said she also knew that there were people who wanted the matter to be investigated “upfront to make sure we know who is lying and who is not because otherwise it creates turbulence when we don’t know whether our state or parts of our state are being controlled by outsiders”.

The former Public Protector has received widespread criticism following the release of the report, which investigated allegations of state capture by the controversial Gupta family and President Jacob Zuma’s son, Duduzane.

During her acceptance speech, Madonsela said “If there ever was a time for us to be reminded by the life and the message in the life of Mahamta Gandhi, it is today. A time when we are going through a serious turbulent country and world.

“A time when we are reflecting as humanity regarding what road brought us here and are there alternative roads that we could take towards that world where we can all be happy, there can be friendship and where we can embrace each other regardless of race, gender, disability and sexual orientation.”

Other recipients included Finance Minister Pravin Gordhan and Shaka Sisulu (both of whom could not attend due to ill health) and Judge Albie Sachs.

South Africa -‘I’m not afraid of jail,’ says Zuma to ANC supporters

Mail and Guardian

Addressing ANC supporters at KwaZulu-Natal, President Jacob Zuma said there is longer any space for democratic debate in South Africa. (Delwyn Verasamy, M&G)
Addressing ANC supporters at KwaZulu-Natal, President Jacob Zuma said there is longer any space for democratic debate in South Africa. (Delwyn Verasamy, M&G)

In his first public appearance since the release of former public protector Thuli Madonsela’s State of Capture report, President Jacob Zuma told supporters on Saturday he wasn’t scared to go to prison because he had been jailed during apartheid.

The public protector said last week that a judge should investigate whether Zuma, Cabinet members and some state companies acted improperly in their dealings with  the Gupta family.

The Gupta brothers, Ajay, Atul and Rajesh, who are friends of Zuma and work with his son, Dududzane, have been accused of influencing Cabinet appointments and securing government tenders. Zuma and the Guptas deny any wrongdoing.

Thousands of protesters called for the president to resign after the 355-page probe was released and some opposition politicians said Zuma should face criminal charges.

“I’m not afraid of jail. I’ve been to jail during the struggle,” Zuma told a cheering crowd in Kwa-Zulu Natal. Zuma spent 10 years as a political prisoner on Robben Island with Nelson Mandela during white-minority rule.

“There’s no longer any space for democratic debate. The only space there is for court arguments by lawyers. That’s not democracy,” Zuma added.

The public protector’s investigation stopped short of saying crimes had been committed, but recommended a judge take the investigation forward.

In one case, the report cited “extraordinary and unprecedented” government intervention in a private business dispute involving Zuma’s friends and his son.

This, it said, may have created “a possible conflict of interest between the president as head of state and his private interest as a friend and father”.

Zuma faces a no-confidence vote in Parliament next week. He has survived two similar votes this year, backed by the ANC, which controls about two-thirds of the assembly.

Since taking office in 2009, Zuma (74) has overcome several corruption scandals with the backing of top echelons of the ANC. – Reuters

South Africa – Madonsela inquiry uncovered lie about Denel and Gupta link

BD Live

Protector’s report catches Denel’s lie

A Denel G-6 howitzer tank. Picture: BUSINESS DAY
A Denel G-6 howitzer tank. Picture: BUSINESS DAY

Denel has been caught in a lie over the formation of its Hong Kong joint venture, Denel Asia, with Gupta associate Salim Essa, documents submitted to the public protector as part of the probe into state capture show.

Denel, which formed the joint venture without the permission of Finance Minister Pravin Gordhan, itself a contravention of the Public Finance Management Act, claimed at the time that the rationale for choosing VR Laser Asia as a partner was the strong relationship it had with its SA-based company, VR Laser.

President Jacob Zuma has taken legal action to prevent the release of the report into whether the Gupta family influenced the hiring of ministers, and whether they were given preferential treatment in state contracts.

The sole shareholder of VR Laser Asia, Essa, has denied in
a letter from his attorney, attached to the documents, that there was a link between the two companies.

His attorney, Charles van Staden of Hogan Lovells, states that Essa established VR Laser Asia “in his private capacity” and “it is not a subsidiary of the local VR Laser Services, (Pty) Limited.” Van Staden confirms that VR Laser Asia “is and remained dormant to date”, said the letter dating back to July 18 2016.

It has also emerged that Essa contravened exchange-control regulations when he established VR Laser Asia, because he used his travel allowance to do so, and did not obtain South African Reserve Bank permission.

He has since asked the Bank to regularise this transaction.

So while Denel insisted that it chose VR Laser Asia as its partner on the strength of its earlier partnership with VR Laser, it is now clear that the company was nothing but a shell, set up especially for the joint venture.

But while Denel has been caught in a lie, the claims by Essa that VR Laser and VR Laser Asia are not connected do not ring true either.

This claim was made presumably to put space between the Gupta family (which is the majority owner of VR Laser) and Denel, as the heat over the Gupta family and their involvement in state business has grown.

Essa is a Gupta associate with numerous business links with the family. In addition to this, the directors of Denel Asia include Kamal Kant Singhala, described as a “25-year-old nephew of the Guptas and co-director of VR Laser Services (Pty) Limited)”.

Other directors include CEO of VR Laser Services Pieter van der Merwe, Stephan Burger, CEO of Denel Land Systems, and Zwelakhe Ntshepe, acting CEO of the Denel group.

The documents, seen by Business Day, indicate that the Gupta family has been under investigation based on complaints from informants since 2000. The complaints relate to alleged import and value-added tax contraventions by Gupta-owned companies, including Sahara Computers (Pty) Limited. The matter was even reported to the then Scorpions in 2003, but nothing came of this.

According to the document, a probe into what appears to be another Gupta-linked company, Homix (Pty) Limited, showed that it “remitted exorbitant amounts of money offshore illegally”. This was linked to three applications to transfer foreign currency, in which a preliminary investigation showed that documents were falsified.

But the family has denied any links with the company.

The preliminary findings of the investigation into VR Laser Services and its interests in Denel Asia and foreign exchange irregularities found that while there were contraventions, no suspicious transfers of money were identified. “If it were to be found that substantial amounts of money were transferred from the republic, it is improbable that the Gupta family would have made use of entities in which they have a direct interest,” it said. “The possibility that funds are exited through more sophisticated methods cannot be excluded.”

Madonsela’s report, which was meant to be released two weeks ago, was blocked by an interdict from Zuma and Co-operative Governance Minister Desmond Van Rooyen. The matter may be heard in court on Tuesday, as Zuma on Thursday brought an application for a postponement so that he had time to respond to submissions made by former MP Vytjie Mentor.

Mentor, who also provided evidence to Madonsela, joined opposition political parties this week in opposing Zuma’s interdict and requesting that the report be released. New Public Protector Busisiwe Mkhwebane also confirmed to Zuma this week that the report was signed off and finalised by Madonsela.