Tag Archives: South Africa

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.


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.

Get top stories and blog posts emailed to me each day. Newsletters may offer personalized content or advertisements.

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.



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.


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”.


‘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.



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.


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.

Read more on:


South Africa – COSATU says Minerals Minister Zwane must go


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”


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.

Swaziland’s rhino horn trade bid defeated at CITES – but what are the alternatives?

Talking Humanities


In the last of his series on the rhino horn trade debate, Professor Keith Somerville calls for a new and effective solution to protect these endangered animals. He says the ban on all trade, which has been in effect for 39 years, has not worked and maybe the answer is a more realistic mix that includes biting the bullet of adopting regulated trade that brings in funds to make conservation self-sustaining.

Swaziland’s proposal to trade in rhino horn has been decisively defeated by member states of CITES (the Convention on International Trade in Endangered Species of Wild Fauna and Flora).

In a secret ballot on 3 October 100 members voted to reject the country’s request to sell its stocks of rhino horn and small annual quantities resulting from natural morality. Twenty-six voted for and 17 abstained. It is believed that Namibia, South Africa and Zimbabwe (which have the majority of Africa’s black and white rhinos) supported the Swazi bid, while states like Kenya, which has a small and threatened population, voted against.

According to Ted Reilly, who heads the country’s parks, Swaziland would have used the funds from the sale to increase protection and conservation measures and provide incentives for local people to support their efforts.

In an emotional speech to the conference in Johannesburg, he appealed for a vote in favour of the trade, reminding delegates of the financial and human and costs of protecting rhinos, notably the number of wildlife rangers killed by poachers. He said the ban wasn’t working and a regulated trade was the only answer.

Swaziland’s official bid claimed ‘proceeds from the sale of stocks will raise approximately $9.9 million at a wholesale price of $30,000 per kg. That amount will be placed in an endowment fund to yield approximately $600,000 annually’, which would make a huge difference to resources available for protection, development of wider conservation programmes in protected areas and benefit staff and local communities. Private rhino owners is South Africa are currentlyfighting their own government in the courts to get a moratorium on domestic trade in horn lifted. Their success would enable trade within South Africa but not legal exports of horn.


Ted Reilly (left) on top of a 60 foot ranger watchtower in Mkhaya Royal National park, Swaziland

NGO’s welcome continued ban
Western conservation and animal welfare NGO’s were jubilant about the vote against Swaziland’s proposals. Kelvin Alie, director of wildlife trade at the International Fund for Animal Welfare (IFAW), said ‘At a time when rhinoceros are more under threat than ever from poachers due to rapidly increasing black market prices in their horn, this decision by parties to deny Swaziland’s request to trade in white rhino horn is to be applauded.’ He didn’t, however, say how the fight to conserve rhinos could be sustainably financed without a legal trade.

The IFAW view and that of other NGOs is best summed up by a speech by Will Travers, head of the Born Free Foundation based in London. Debating the issue at London’s Royal Institution, he made it clear that he and many other NGO activists in the conservation field would never support a legal trade – even in natural mortality horn or horn removed without injury to the rhino to deter poachers from killing the animals (see The Conversation).

He believes Western governments and NGOs should finance conservation and enhanced anti-poaching in Africa range states – something which disempowers those states and hands power over their wildlife resources to NGOs and foreign governments. But this would add to local populations’ sense of alienation from wildlife. In addition, it may increase the likelihood that they will help poachers as they feel that have no power over their own wildlife and receive no benefit from it. Voicing the concern for a lack of sustainable income for conservation Tom Milken, the veteran monitor of international wildlife trade and its effects, said after the vote, ‘The underlying issue is, who pays for it?’

The answer is the NGOs that support a ban on all rhino horn trade. They are a major source of funds for conservation and use the funding, or the denial of it, to persuade countries to adopt anti-trade policies and move away from community-based, sustainable use approaches to wildlife. As the former head of the Natal Parks Board, David Cook and veteran South African conservationist John Hanks, told me recently, this approach denies countries like Swaziland, Namibia, Zimbabwe and South Africa, greater influence over rhino conservation policy and the chance for self-funding conservation and rural development.

What next?
The CITES vote against legal trade comes at a time when a brief period of optimism that the rate of poaching was being reduced by anti-poaching operations is being replaced by evidence of a sharp rise in poaching in KwaZulu-Natal (KZN). Just before the CITES meeting opened Edna Molewa,  South Africa’s minister of environmental affairs, confirmed 702 rhinos had been killed in the country as a whole this year, compared with 796 in the same period last year. She said between January and August 458 poached rhino carcasses were found in Kruger compared with 557 in 2015. But there is growing evidence that poaching has not been halted. It has been diverted from Kruger to other areas – particularly the Hluhluwe-iMfolozi Park in KZN.

On 23 September (Wold Rhino Day) the Hluhluwe Park reported that six rhinos had been found dead that day with their horns removed. This brought the number poached there to 113 this year – up 20 per cent on 2015. Twenty were killed in September alone. When I visited the park in early September, the head of rhino protection, Cedric Coetzee, said poaching gangs were switching to the park because of the tightening of security in Kruger National park and because, as I saw when I toured the park, the rhinos are easy to find. He said that whereas a poacher in Kruger might take two to three days to kill rhinos, in Hluhluwe-iMfolozi they could be in and out of the park in two to three hours having killed and removed the horns of several of the animals.

The KZN wildlife authorities are fighting back. Last month they announced that three poachers had been shot dead there. A spokesman for KZN Ezemvelo Wildlife (which runs the park) said in addition, so far this year rangers and the police had arrested 91 poachers, compared with 49 for the whole of 2015.

This demonstrates that with rhino horn fetching $65,000 a kilo in Vietnam and China, the illegal trade will persist. Poor rural dwellers, former professional hunters, corrupt ex-staff of wildlife parks and even some current wildlife personnel are part of a complex mix of people who work with criminal syndicates to poach rhinos and smuggle their horn. Anti-poaching patrols can kill or catch poachers but have had little success in smashing the syndicates, as Kruger Park’s chief ranger Nicholus Funda told me recently.


Black rhino in Mkhaya Royal National Park, Swaziland

A more realistic mix, biting the bullet of adopting regulated trade that brings in funds to make conservation self-sustaining seems to me the only answer in the long run. The rejection of the Swazi bid will not end attempts to find solutions involving the reintroduction of legal and regulated trade, despite the emotively-expressed opposition of wildlife NGOs. Rhinos are in danger and new methods are needed, as the 39 years of a ban on all trade has not improved protection of the rhino. It has only created a continuing demand, hiked prices and encouraged poaching. Something new and effective is needed – fast!