Tag Archives: Zuma and Guptas

South Africa – Zuma to face state capture and resignation issues in parliament


2017-06-22 08:03

President Jacob Zuma.  (Phill Magakoe, AFP File)

President Jacob Zuma. (Phill Magakoe, AFP File)


Cape Town – President Jacob Zuma is due to face some tough questions on Thursday during his quarterly appearance in Parliament to answer questions from MPs.

MP’s are expected to focus on some of the controversial developments since his last question and answer session in March.

Since then, there has been a mass Cabinet reshuffle, three sovereign credit rating downgrades, and the leak of the infamous #GuptaEmails seen as detailing the extent of the Gupta family’s influence on him, his family, Cabinet and State Owned Enterprises. Zuma has in the past defended his relationship with the family, describing them as friends.

VISIT our #GuptaEmails Special Report

The six scheduled questions on Thursday are:

– ACDP leader Kenneth Meshoe has asked if Zuma will ensure matters relating to a judicial commission of inquiry into state capture will be expedited.

– ANC MP Phumuzile Ngwenya-Mabila asked what programmes are involved to deliver radical socio-economic achievements in rural areas.

– DA leader Mmusi Maimane has asked if Zuma’s government is still intent on pursuing a new nuclear build programme in light of the Western Cape High Court ruling the previous procurement process unlawful.

– ANC MP Fezeka Loliwe asked what factors are at play in the rise of unemployment in the country.

– AIC leader Galo wants to know if Zuma intends to step down ahead of a Constitutional Court bid to have him impeached.

– ANC MP Hope Malgas has asked how government’s National Social Security Fund will operate.

Maimane also attempted to add an urgent question to the order paper on Wednesday, to get Zuma’s response to South Africa’s current economic recession.

Speaker Baleka Mbete had not responded to Maimane’s request at the time of publication.

Resilient strength 

Zuma has shown a resilient strength in questions sessions over the last 12 months, even when tested with unprepared questions.

He had a also faced criticism for cancelling sessions in prior years, particularly after the Constitutional Court’s Nkandla ruling in March 2016.

In terms of process, the President answers a prepared statement to each of the six written questions. The original questioner then gets to ask a follow up on the subject.

Thereafter, three unprepared questions on the subject are allowed from any member of the House.

The President is Constitutionally obligated to appear four times a year for questions, usually one a term. His past appearances have gone uniterrupted after the Economic Freedom Fighters decided to boycott his appearances, because they don’t recognise him as President.

The sitting will begin at 14:00.

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

Daily Maverick (South Africa)

    • Ranjeni Munusamy
      ranjeni munusami BW



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 – how the Guptas captured Eskom and Zuma


#GuptaLeaks: How Eskom was captured

Jun 09 2017 09:18

amaBhungane and Scorpio

An explosive cache of emails from inside the Gupta empire has provided evidence of how the family captured the president, the government and key state-owned entities. This is the story about one of their most important conquests: Eskom.

In 2015, as Brian Molefe and his key lieutenant Anoj Singh moved across to Eskom, the Guptas turned their attention to the power utility’s R40bn primary energy budget.

The feast was about to begin.

May 2014-September 2014: The Negotiations

To understand how the Guptas captured Eskom, one needs to go back to May 2014, when a company called Goldridge came looking for an Eskom coal contract.

At the time, the Guptas were well known, having landed both literally and in the public discourse at Waterkloof airforce base in 2013. However, the Guptas’ fledgling mining companies, Goldridge and Tegeta, were still unknown entities.

Minutes from the meeting held at Megawatt Park on May 9 2014 show that there was some confusion about who actually owned their Brakfontein coal mine – Tegeta or another Gupta-owned mining company, Goldridge. It was Tegeta.

It was Ayanda Nteta, now Eskom’s acting head of fuel sourcing, who pointed out during that first meeting that “Eskom prefers dealing with companies that are 50%+1 black-owned”, which Tegeta was not.

At the time, almost 50% of Tegeta was owned by Oakbay Investments, and indirectly Gupta brothers Atul and Ajay and their wives Chetali and Shivani.

Another 21.5% was owned by Bhatia International, a controversial Indian coal company that only a few months before had been charged by India’s Central Bureau of Investigations with allegedly supplying substandard quality coal to India’s version of Eskom, complete with forged lab results.

Only the remaining 30%, held by Aerohaven Trading and Oakbay chief executive Ronica Ragavan, was considered black-owned.

Throughout 2014, Eskom officials did not seem overly interested in the coal resources Tegeta had to offer, as minutes of various Eskom meetings reveal. Goldridge had offered the same resource to Eskom in 2012, which Eskom declined.

Still, Eskom’s coal procurement officials agreed to play along and do another round of tests.

The results were not promising: only a small seam of coal from Brakfontein mine known as “seam 4 lower” was considered suitable.

At a meeting in September 2014, Tegeta “asked if there is any way Eskom can accommodate them as they are only looking to supply [a] small amount of coal” from their stockpile.

Nteta responded that “the power stations that could potentially take coal from Brakfontein have all their needs met for this financial year”.

Tegeta persisted, asking about “the possibility of moving some coal in the interim”. Eskom did not budge.

But the Guptas were not going to take no for an answer.

Ajay and Atul Gupta. (Pic: Gallo Images)

Ajay (left) and Atul Gupta. (Photo: Gallo Images)

November 2014-January 2015: Enter the Gupta-controlled board

AmaBhungane understands from sources familiar with the negotiations that Eskom’s coal procurement officials held out as long as they could, but by January 2015, they were receiving pressure “from above” to sign a contract with the Gupta-owned mine.

By this point, Eskom also had a new board. In December 2014, Public Enterprises Minister Lynne Brown replaced eight members of Eskom’s board. Six out of the eight new appointees – Ben Ngubane, Mark Pamensky, Nazia Carrim, Maria Cassim, Devapushupum Naidoo and Romeo Khumalo – were either family of or had business ties to the Guptas and their business partners, according to the Public Protector’s report.

On January 23 2015, Tegeta came with a new offer. Although Eskom tests found that Brakfontein’s blended product (seam 4 upper and lower) was unsuitable, Tegeta offered to supply the blended product at R15/GJ.

Eskom told Tegeta that the price was too high and to come back with a new offer.

Instead of lowering their price, Tegeta came back a week later with reasons why it needed a higher price. Minutes from the meeting show that Tegeta’s chief executive Ravindra Nath told Eskom “they have increased their BBBEE ownership and a higher price would be needed to finance the BBBEE partners”.

This was not true – Tegeta only acquired new black shareholders six months later when Salim Essa and Duduzane Zuma were brought on board.

Minutes show that Nath also tried to argue that “changes in environmental law as well as royalties justified the need for a higher price”.

Eventually, Eskom agreed to accept Tegeta’s offer to supply 65 000 tonnes per month of blended coal for five years at R13.50/GJ, roughly R277/tonne.

It is unlikely that Eskom officials were aware that around the same time, questions about Brakfontein’s coal were being raised in court. As part of a case brought by a former mining contractor against Goldridge, an expert geology report was submitted to court that concluded that “…Brakfontein coal deposit could never support a mine of economic importance”.

“Theoretically the poor quality [coal] can be mixed with another coal supply source to produce an acceptable Eskom quality coal feed, but [this] is a pipe dream,” geologist Gerhard Esterhuizen wrote in his report.

The pipe dream was about to be put to the test.

February 2015-March 2015: The Guptas demand more

The Guptas had finally been promised their first Eskom coal contract, but it is apparent they were not satisfied with their relatively modest contract of 65 000 tonnes/month.

Just four days after Eskom relented and agreed to take Brakfontein’s coal, Tegeta’s chief executive wrote back to Eskom’s general manager of fuel sourcing, Johann Bester, with a new request:

•    Increase the amount of coal supplied from 65 000 tonnes a month to 100 000 tonnes a month, starting in October,

•    Increase the contract from five years to 10 years, and

•    Allow Tegeta a grace period of three years before it needed to become 50%+1 black-owned.

Minutes show that during negotiations, Eskom had requested first right of refusal to coal from the as-yet-unopened part of the coal mine known as Brakfontein Extension. Tegeta was now seeking to convert Eskom’s first-right-of-refusal into a cold, hard contract.

Bester sat on the request for a few days and then wrote back on February 12:

•    Eskom would still only agree to take 65 000 tonnes a month; come October Tegeta could offer Eskom another 35 000 tonnes a month from Brakfontein Extension, but it would be up to Eskom to decide if it wanted or needed the coal.

•    Eskom would still only agree to a contract of five years but there would be an option to extend for another five years when the contract ran out.

•    On the BEE requirements, Eskom would agree to a grace period, as it had done with other suppliers, provided that Tegeta remained 50%+1 black-owned for rest of the contract.

Considering that Tegeta’s first coal contract was still not signed – a contract that was awarded without a competitive bidding process – this was an unusually generous concession from Eskom.

Tegeta was not happy though. Nath immediately forwarded Eskom’s letter to Tony Gupta and Salim Essa, saying:

I am not very happy with the wording “Eskom shall [have] an option to enter into an offtake agreement for the additional coal”. Further, ‘option to extend for further five years’. This shows that there is no commitment on the part of Eskom.

Majuba Power Station. (Photo: Eskom)

It is worth taking a minute to consider this – Tegeta had already used their connections to pressure Eskom to take low quality coal. Now, by refusing to more than triple the contract from roughly R1bn to R3.8bn on the basis of a single letter, Eskom was deemed to be showing “no commitment”.

Commitment to what, exactly?

The reply that came from Gupta and Essa is not included in the #GuptaLeaks. But the following day, an emboldened Tegeta wrote back, this time to Nteta, who reported to Bester.

“Kindly recollect our discussions in which I mentioned that we want a 10 years’ contract to satisfy our funders as the loan period is going to be more than 7 years… for the sustainability of the mines we request you to kindly consider the following changes favourably.”

Nath included his proposed changes to the wording of the contract, which would include a 10-year contract and a guaranteed 100 000 tonnes a month, starting in October.

At this stage, there’s clear evidence that Eskom was aware that Tegeta’s Brakfontein coal mine did not represent the best value-for-money for Majuba power station.

A list of coal suppliers disclosed in the unredacted version of the Denton’s Report shows that in 2015, Majuba power station had seven suppliers – Tegeta delivered the lowest quality coal yet commanded the highest rand per gigajoule rate.

For example, while Tegeta scored R13.50 per GJ, another Delmas-based mine, Kuyasa Mining, was paid R10.41 per GJ. And while Kuyasa as well as four other Majuba suppliers reached Eskom’s target of being 50%+1 black-owned, Tegeta had still not concluded their promised BEE deal.

It is not clear from the #GuptaLeaks what happened over the next two weeks, but on March 9, Eskom relented – Nteta wrote back to Tegeta confirming that Eskom would take 113 000 tonnes of coal from Brakfontein, starting in October 2015.

The following day, Eskom and Tegeta signed the Brakfontein contract worth R3.8bn over 10 years.

An unexplained footnote to this saga is that the day after the Brakfontein contract was signed, Eskom’s board suspended four senior executives, including chief executive Tshediso Matona and Matshela Koko, group executive for commercial and technology. Of the four suspended, only Koko would eventually be reinstated.

March 2015: Problems emerge

Tegeta was due to start delivering coal on 1 April 2015, provided that its coal first passed a combustion test at Eskom’s Research, Testing and Development lab in Germiston – this was not as simple as it sounds since Tegeta’s blended coal had failed to pass two previous tests.

The results of the combustion test, conducted by Eskom’s special-purpose built lab, were delivered two days after the contract was signed. The report, which forms part of an ongoing investigation by Treasury, concluded that Brakfontein’s coal was “not suitable for all power stations”.

Of the 14 power stations in Eskom’s fleet, the coal was considered “not acceptable” for 10, while four were considered “marginal”. Majuba, where Brakfontein’s coal was contracted to go, was one of the power stations marked “not acceptable”.

In particular, the report warned that Tegeta’s plan to blend higher and lower quality coal was risky, saying: “…producing a consistent blend … is difficult to maintain. This can result [in] producing a blend with a hardgrove [index], which is worse than the one analysed, and also surpassing the … ash and CV rejection limit.”

In other words, the coal from Brakfontein mine was too marginal, the risk of the coal quality dipping below the rejection limit on a regular basis too high.

At this point, Eskom should have told Tegeta the deal was off. Instead, Eskom ignored its own technical experts and okayed Tegeta to start delivering coal to Majuba.

March 2015: Ben’s board

By this point, the Guptas were also starting to throw their weight around with the Eskom board.

On March 19, Nazeem Howa, then-chief executive of Oakbay Investments, sent Salim Essa a statement that he had drafted for the Eskom board to send out announcing that it had decided to relieve chairperson Zola Tsotsi of his duties.

In the email Howa refers to the statement as “a first draft”, saying to Essa:

“Let me have your thoughts and I will work to polish further.”

Although Tsotsi would only step down two weeks later, it appears the Guptas were not only given advanced warning that the Eskom chairperson would resign, but had taken the liberty of drafting a statement for the new chairperson, Ben Ngubane.

On Thursday, Tsotsi said he was “not surprised” that the Guptas were privy to information about his removal:

“I suspected my removal was orchestrated by them. In fact, the Guptas told me a couple of weeks before, at the State of the Nation Address [February 12], that if I would not co-operate with them that they will see to it that I am removed as they were the ones who made sure that I was retained as chairman.”

Tsotsi said that at the time he was not aware that his replacement, Ngubane, and several members of the Eskom board had connections to the Guptas.

The #GuptaLeaks show that Ngubane and Essa were already well-acquainted, being business partners in Gade Oil and Gas, a company that tried to gain oil concessions in Central African Republic in 2013.

Two weeks later, the day after Tsotsi resigned, Howa sent Essa an “amended version of the statement for Ngubane, “for your approval”.

The statement that Ngubane released on behalf of the Eskom board later that day differs substantially from Howa’s final draft, but Howa’s fingerprints are clear in a few of his sentences that survived.

One of Howa’s phrases that did not make it into the final statement was that the board “will not tolerate incompetence, tardiness, any dereliction of duty from any member of the Eskom team, saying:

“We know that there is no alternative but to implement several radical solutions.”

Things were about to get a lot more radical at Eskom.

Eskom CEO Brain Molefe and chairperson Dr Ben Ngub

Former Eskom CEO Brian Molefe and Eskom chairperson Ben Ngubane (left).

April 2015-June 2015: Enter Molefe and Singh

With Eskom chief executive Tshediso Matona on suspension, Minister Brown announced that she would be moving Transnet chief executive Brian Molefe across to Eskom. Coming with him would be Transnet chief financial officer Anoj Singh.

Invoices show that Singh had already made four trips to Dubai by this point, where he stayed in the luxury Oberoi Hotel, enjoyed spa treatments and was chauffeured around in a limo – all paid for by the Guptas’ Sahara Computers.

Although there’s no record of Molefe visiting the Guptas in Dubai, the Public Protector’s State of Capture report detailed 58 phone calls between Molefe and Ajay Gupta starting soon after Molefe joined Eskom.

The arrival of Molefe and Singh at Eskom ushered in a new era for the Guptas’ mining ambitions.

When Tegeta started delivering coal to Eskom’s Majuba power station in April 2015 production was slow – just 54 041 tonnes in the first month – but deliveries soon ramped up and by July, Tegeta was delivering and being paid for more than 100 000 tonnes; far more than the 65 000 tonnes Eskom agreed to take for the first six months of the contract.

Considering that Tegeta had scored a 10-year contract without participating in a competitive bidding process, this was a major triumph. But Tegeta now wanted more.

In a new proposal sent to Eskom in June, Tegeta proposed that come October, its mine would deliver 200 000 tonnes of coal to Eskom, up from the already inflated 113 000 tonnes agreed to in the contract. Eskom agreed, provided that Tegeta’s coal passed the required quality tests.

However, as production volumes increased at Brakfontein mine so too did the problems.

A technical report commissioned by Treasury and based on documents from Eskom shows that in August 2015, 34% of Tegeta’s stockpiles were rejected because the quality did not meet Eskom’s specifications.

Eskom insists it did not pay Tegeta for stockpiles that were rejected, but the records provided to Treasury show that Tegeta was still paid for well over 65,000 tons of coal it was contracted to deliver – R35.3m for 122,617 tons in July, R33.2m for 112,207 tons in August, R42m for 139,386 tons in September.

August 2015: Problems emerge

By the end of August 2015, Eskom could not ignore the problems with Tegeta’s coal. On August 31, Koko – who had recently been reinstated to his position as group executive of technology and commercial – suspended Tegeta’s contract as well as two independent laboratories that were testing Tegeta’s coal.

The suspension of its contract came at an inopportune time for Tegeta. Just three days before Tegeta had written to Eskom with yet another offer, this time to supply an additional 150 000 tonnes of coal a month – Tegeta would source the coal from other mines and blend it, not as a middleman per se, but a “value-adding trader”.

For most junior coal suppliers, the suspension of a coal contract would be a major crisis. Tegeta seemed undeterred. On September 4, Tegeta increased their offer to supply coal as a value-adding trader to 200 000 tonnes.

At the same time, Nath wrote back to Koko explaining that despite accredited independent laboratories rejecting numerous samples of being too high in sulphur, Tegeta’s own in-house tests found the sulphur levels to be acceptable.

There is no indication in the #GuptaLeaks that Tegeta sent the result of the in-house tests to Eskom. Despite this, Nath’s letter seems to have sufficed. The following day, Koko lifted Tegeta’s suspension “whilst [Eskom] continues its investigation”.

Koko would later claim in an interview that their investigation found that one of the labs was at fault, saying: “…We had conclusive proof that this lab was fabricating results … that is why we suspended them,” Koko told Carte Blanche in June 2016.

However, an October 2015 report by Dr Chris van Alphen, Eskom’s chief adviser on coal quality, lays the blame squarely on Tegeta and its apparent inability to produce a consistent blend of coal.

According to a technical report prepared for Treasury’s investigation, when three labs analysed what were supposed to be identical samples of Brakfontein’s coal from August 2015, the results varied so dramatically that one technician remarked: “They do not look like the same coals never mind the same samples.”

For Tegeta it was business as usual, but the episode also resulted in four Eskom employees being suspended. That included Dr Mark van der Riet, Eskom’s most senior coal scientist, who was tasked with investigating the discrepancies in Brakfontein’s coal qualities.

Almost two years later, Van der Riet remains on suspension. After Van der Riet and his union representative approached the Labour Court, Eskom finally agreed to hold an internal disciplinary hearing later this month.

“If Mark’s matter is such a serious matter why has it taken more than a year for Eskom to deal with it? Eskom seems to be using delaying tactics, hoping the employee will eventually resign,” Numsa’s Bonny Nyangwa said on Wednesday.

Eskom’s official line is that Van der Riet’s 22-month suspension is not linked to his role in investigating Brakfontein’s coal qualities.

Nyangwa disputes this, and confirmed that Eskom added new charges against Van der Riet earlier this month: breaching Eskom’s confidentiality policy by allegedly forwarding information about the Brakfontein investigation to his personal email address.

September 2015: Tegeta ups the game

Even after Tegeta’s contract was reinstated, Brakfontein’s coal continued to periodically fail lab tests, according to Treasury’s technical report. In September 2015, for instance, 38% of Tegeta’s stockpiles were rejected, most for having excessively high sulphur levels, the cause of toxic sulphur dioxide air pollution.

There’s no evidence that Eskom was deeply concerned by this development. Instead, starting October, Tegeta increased deliveries to Majuba power station to more than 200 000 tonnes a month.

Keep in mind that this was during summer, when Eskom’s coal requirements have always been lower. Despite this, Tegeta was now delivering three times what was originally agreed to in the January 2015 negotiations with Eskom.

For the next several months, Tegeta reaped the rewards despite there being no evidence that any other mines were given an opportunity to bid to supply extra coal to Majuba.

At the same time Tegeta was also pushing Eskom to agree to their long-standing proposal to become a “value-adding trader”. Finally, at the end of September, Eskom official Thabani Mashego pushed back.

In a tone that the Guptas must have been unused to hearing, Mashego told Tegeta chief executive Ravindra Nath in an email:

“Eskom will be going out on open enquiry to fulfil their coal shortfall requirements going forward. Tegeta is therefore advised to respond to such enquiries, which will be advertised in the print media and the Eskom Tender Bulletin shortly.”

Nath wrote back the next day, essentially instructing Eskom to sign the contract.

“[W]e have to advise that on the basis of the letter and the subsequent meeting thereafter we have already tied up the coal offtake and it is not possible to come out of it. We therefore request you to arrange for the contract in this regard.”

It is not clear whether Eskom capitulated and signed this contract – this is one of the many questions that Eskom chose not to answer. Either way, Tegeta did not need this off-take agreement – it was about to become a major coal supplier to Eskom.

April 2015-December 2015: Next Target: Optimum

It is worth taking a step back for a minute to understand how the Glencore-owned Optimum coal mine became a target in Tegeta’s rapidly expanding coal empire.

Hidden in the #GuptaLeaks is a letter addressed to Glencore’s chief executive Clinton Ephron. Dated April 13, the letter was from Dam Capital, representing the little-known Endulwini Consortium, and contained an offer to buy Optimum Coal as well as Optimum’s Richards Bay export allocation for $200m.

“We have commenced putting together a consortium of South African investors, led by black people, with an established presence in the mining industry,” the letter reads, “[t]he identity of whom will be disclosed as we reach an agreement that the assets are available for sale.”

No more is heard from Endulwini or Dam Capital in the cache of leaked emails, and it is not clear if the Guptas were the anonymous investors referred to in the letter. What we do know from the Public Protector’s report is that in July, Glencore received an almost identical offer to buy Optimum Coal from KPMG representing an anonymous client. When Glencore questioned KPMG, it discovered the bid had come from Oakbay.

Glencore refuses to comment on the Dam Capital offer, and we know from the Public Protector’s report that it rejected the similar overtures by KPMG.

Soon though, Glencore was facing new problems from Eskom as newly appointed Eskom chief executive Brian Molefe took a hardline approach, refusing to renegotiate the price Eskom paid for Optimum’s coal. At R150/tonne, Optimum was sinking deeper and deeper into financial trouble. In August, Glencore placed the mine in business rescue in a bid to stave off liquidation, but Molefe remained unmoved.

Instead, it is alleged that Molefe and Eskom chairperson Ben Ngubane tried to persuade mines’ minister (at the time) Ngoako Ramatlhodi to cancel Glencore’s other mining rights in a bid to force Glencore to capitulate.

On August 7, after Optimum’s mining licence was briefly suspended and then reinstated by the Department of Mineral Resources, a Gupta lieutenant, Ashu Chawla, received an email from someone only identified as “Business Man” using the email address “infoportal1@zoho.com”.

Attached to the email was a letter Optimum’s business rescue practitioners had sent to Eskom’s senior executives regarding Optimum’s mining right suspension. The letter itself is not particularly explosive, but what is apparent is that someone with access to confidential information in Eskom was leaking it to the Guptas.

“Business Man” features in the #GuptaLeaks again in November when Matshela Koko forwarded two emails from his private Yahoo email address to “Business Man”, both containing confidential Eskom information.

In one, Koko asks “Business Man” to pass the Eskom documents on to “the Boss” – the email was then forwarded to “Western”, another anonymous email address that appears to be a proxy for one of the Gupta brothers.

In the second email Koko passed on a sensitive legal opinion exposing how weak Eskom’s position was in their ongoing battle with Optimum Coal. Again, “Business Man” and “Western” passed these on to Chawla.

A day later, Koko sent a particularly vitriolic letter to the business rescue practitioners, threatening to review all of Glencore’s other Eskom contracts – it is not clear how, but the #GuptaLeaks show that Tony Gupta was given an advanced copy of Koko’s letter.

A few days later, the business rescue practitioners signed a term sheet with the Guptas, formally entering negotiations to sell Optimum Coal.

We can also see from the #GuptaLeaks that on December 2, when Mineral Resources Minister Mosebenzi Zwane failed to board his official flight from Zurich to Dubai, he was allegedly on board the Guptas’ Bombardier jet, ZS-OAK, along with Tony Gupta and Salim Essa.

The former Public Protector’s report concluded that Zwane had played a central role during the negotiations in Zurich where Glencore agreed to sell Optimum to the Guptas. What her report was unable to explain however was how the minister got from Zurich to Dubai – from the #GuptaLeaks we now have evidence that Zwane spent the next two days in India with the Guptas before flying back to Dubai and catching his official flight back to Johannesburg.

Suspended Eskom executive Matshela

December 2015: The R1.68bn prepayment

By early December, the Guptas were finally about to get their hands on Optimum Coal. Thanks to Koko, insisting at the last minute that Glencore sell the entire Optimum Coal Holdings portfolio, Tegeta would not only be buying the loss-making Optimum Coal Mine, but also Koornfontein Mines and a 5.5m-tonne/year export allocation at Richard’s Bay.

Tegeta now needed to find a way to pay for it. The problem was that Tegeta would not be paying the R2.15bn purchase price to Glencore, but to a consortium of three banks, which had loaned money to Glencore during a period of several years.

On December 8, Tegeta chief executive Ravindra Nath met with First National Bank, Investec and Rand Merchant Bank and put a proposal on the table: Tegeta would settle an undisclosed portion of the debt now and the rest would be paid to banks in 11 monthly instalments.

The banks politely but firmly declined and told Tegeta they wanted the full debt settled.

Around the same time, Tegeta also called a meeting with Koko. We know about this meeting because it is referred to in a letter sent to Koko on December 9 and disclosed in the #GuptaLeaks. Based on the letter we can deduce that Eskom agreed in principle to give Tegeta a massive R1.68bn upfront payment for future coal deliveries from Optimum Coal.

It appears from the #GuptaLeaks that Tegeta wanted to use their yet-to-be acquired mine to secure a sizeable chunk of money from Eskom – money that could then be used to pay the purchase price of Optimum.

Tegeta appears to have been so confident of receiving the payment that Koko was requested “to kindly send us a written confirmation regarding the payment for supply of coal amounting to R1,680,000,000 (Rand one billion six hundred and eighty million)”. Nath finished off his letter by attaching the Guptas’ lawyers bank details to the bottom of the page.

It is not clear from the #GuptaLeaks if Tegeta received the R1.68bn prepayment it requested. On the same day Koko received the prepayment request, Zuma fired Nhlanhla Nene as finance minister, triggering the political equivalent of a nuclear bomb ripping through the markets.

By Monday 14 December, sanity had prevailed and the Guptas’ hand-picked finance minister Des van Rooyen was shifted out of Treasury. It is possible that the entrance of Pravin Gordhan as finance minister put any plans of a R1.68bn prepayment on hold. But the Optimum deal was by no means off the table.

On December 16, Eskom CFO Anoj Singh flew to Dubai – the trip, paid for by the Guptas, cost AED20454 (R71 610). In January, Koko followed suit, staying at the Oberoi Hotel for two nights at the Guptas’ expense.

The #GuptaLeaks provide no detail on whether Singh or Koko met with the Guptas during this time or what they spoke about if they did. However, based on the largesse that was about to flow in the Guptas’ direction, we should be deeply concerned by meetings such as these.

January 2016: A red-carpet welcome

Although Tegeta would only formally take ownership of Optimum Coal in April, from January 1, Tegeta was running the mine for its own profit or loss.

Tegeta was now supplying Majuba power station from their Brakfontein mine, Hendrina power station from Optimum, and Komati power station from Koornfontein mine.

The great mystery of the Guptas’ bid to grab Optimum was how they planned to turn a mine that was haemorrhaging R100m a month and turn it into a profitable venture.

The assumption was that Eskom’s reluctance to renegotiate the price of R150/tonne that Optimum received would fall away as soon as the Guptas took over the mine. But Eskom’s refusal to renegotiate the price had become such a cornerstone of Eskom’s fight with Glencore that there was no way to change the price now.

The dilemma was quickly solved because by January, Eskom had conveniently cleared the way for Optimum to start supplying coal to Arnot power station in Mpumalanga.

In 2015, Eskom had taken the decision not to renew Exxaro’s cost-plus contract to supply Arnot as the price Eskom paid for the coal had become unsustainably high, sometimes exceeding R1 000/tonne.

That decision may have made financial sense. What made less sense was Eskom’s decision to terminate a second Arnot contract, this time with Mafube, a joint venture between Exxaro and Anglo American that mines coal just north of the N12 highway and supplies it via a long conveyor belt system to Arnot power station.

Eskom’s Denton’s report shows that in July 2015, Mafube provided the cheapest coal on Eskom’s books at a fixed price of R132/tonne. The coal was not great quality, but since 2004 the mine had delivered 1.18m tonnes a year to Arnot power station. According to Denton’s report the contract was due to run until the end of 2023.

Exxaro’s spokesperson Mzila Mthenjane will only say that the contract came to an end. However, Exxaro’s own annual report refers to “Eskom’s decision to terminate the Mafube supply agreement”, and according to a source familiar with the operations, the contract was cancelled without reason in December 2015.

By the end of January, a steady stream of 30-tonne coal trucks was running from Optimum mine to Arnot power station roughly 60km away.

And while Optimum received R150/tonne for coal delivered to Hendrina power station, Optimum scored R470/tonne for coal delivered to Arnot power station, excluding transport costs. The cost of transporting the coal – another R60/tonne or R1 800/truck – was paid by Eskom.

Eskom maintains that the coal delivered to Arnot justified a higher price on the basis that the coal had a lower abrasiveness index – this version is disputed by numerous sources familiar with the on-the-ground operations.

Later, when demand for coal at Arnot rose, and Optimum no longer had enough coal to supply both contracts, Eskom appears to have obligingly reduced the amount of coal Optimum was required to deliver to Hendrina power station, freeing up additional coal for the more lucrative Arnot contract.

January 2016-February 2016: Brakfontein goes on sale

Around the same time, Tegeta announced it would sell Brakfontein mine with its Eskom contract to Shiva Uranium, a subsidiary of the Guptas’ listed company Oakbay Resources and Energy – Tegeta would transfer Brakfontein and all its contracts to Shiva and in exchange Tegeta would receive shares in Shiva worth R2.1bn.

On February 24, Oakbay’s shareholders approved the deal, and Brakfontein became part of the newly formed Shiva Coal. However, even though the mine changed hands, Eskom kept paying Tegeta for the coal.

AmaBhungane discovered this after submitting a PAIA request to Eskom for a list of Eskom’s coal suppliers and their percentage of black ownership – the list we received in March this year did not include Oakbay or Shiva.

In terms of the Public Finance Management Act, Eskom has to pay the rightful owner of the coal it receives. However, Eskom’s own records show that Tegeta continued to receive payments for Brakfontein’s coal for months after the mine was sold. Sources say that as of last month Tegeta was still receiving the payments for Brakfontein’s coal.

When we queried this with Eskom in a meeting in April, Ayanda Nteta, the outspoken executive from the 2014 meetings, told us: “In terms of Brakfontein, my understanding is that Shiva Uranium has bought in shares in terms of Brakfontein so there was a flow through… The contract we have is with Tegeta, that’s why … Shiva wouldn’t be listed.”

In fact, Shiva did not buy the shares in Brakfontein or Tegeta. Instead the circular is explicit that Shiva bought the mine with its contract. Shiva is now the rightful owner of the coal, but instead Eskom is continuing to pay Tegeta.

“We will look into that. Our legal people understand in terms of the flow through and who bought the shares,” Nteta said.

Eskom has failed to respond to any follow-up questions on the issue. Questions were also sent to Oakbay Resources & Energy two weeks ago – chairperson George van der Merwe responded last week confirming that Shiva had bought the Brakfontein mine with its contract but offered no explanation for why Tegeta was still being paid.

February 2016: Briefly empowered, always empowered

It is hard to imagine why a JSE-listed company like Oakbay would allow Eskom to pay another company for its coal. The answer may lie in Eskom’s requirement that its coal suppliers be 50%+1 black-owned.

“We have a shareholder compact which targets us to spend at least 40% of our total procurement on black suppliers. Coal being the biggest commodity, the more we can do it on coal the easier it gets,” Edwin Mabelane, Eskom’s head of procurement, told amaBhungane.

When the original Brakfontein contract was signed in 2015, it contained a suspensive condition – Tegeta needed to reach Eskom’s black empowerment target of 50%+1 by 2018 and remain empowered for the rest of the contract.

“In terms of [Tegeta’s] contract, they were given a certain period; we said to them, ‘You have a [10-year] contract, you need to move to black-owned within a certain amount of time,’” Nteta confirmed.

In November 2015, just before Tegeta bought Optimum Coal, Tegeta reached that target when Duduzane Zuma and Salim Essa became shareholders through Elgasolve and Mabengela Investments respectively.

As a result, Tegeta’s black-owned shareholders own 775 shares versus the 774 shares held by Oakbay and several off-shore companies – through a byzantine share structure the majority of control still rests with members of the Gupta family and two Gupta-controlled companies registered in Dubai.

However, this raises an interesting question: if Shiva takes possession of the contract as it is legally entitled to do, would Shiva be required to become 50%+1 black-owned by next year? And if Shiva failed to become majority black-owned, would Eskom be entitled to cancel the contract even though it is still scheduled to run until 2025?

In other words, for the Brakfontein contract, does once empowered (albeit briefly) mean always empowered?

Currently, Shiva is 41% black-owned thanks to Tegeta and another Duduzane Zuma-owned company, Islandsite Investments 255. However, due to the complicated share structure, more than 50% of the Shiva is owned by members of the Gupta family.

April 2016: Eskom asks Treasury for even more

It has been well-established that throughout 2016, Tegeta raked in almost R1bn from their “emergency” contract supplying coal to Arnot power station.

Unfortunately, the #GuptaLeaks provide no further detail on the Guptas’ dealings with Eskom beyond the early negotiations in 2016.

In April 2016, Eskom delivered on part of the prepayment Koko promised when, in a late-night special tender committee meeting, Eskom agreed to prepay Tegeta R587m for coal. Eskom’s decision came just hours after the consortium of banks refused to provide Tegeta with a R600m bridging loan.

In August, Treasury refused Eskom’s request to extend Tegeta’s contract to supply Arnot power station by another R855m over six months.

However, Treasury gave conditional approval to Eskom to sign a R7bn expansion to the Koornfontein contract to supply Komati power station for the next seven years, provided that there were no other potential suppliers. Eskom appears to have ignored this condition and handed the contract to Tegeta two weeks later.

By this point, Brakfontein’s deliveries to Majuba power station were back down to the contractual 113 000 tonnes of coal a month. A few days later, Eskom returned to Treasury with a new request – Brakfontein had more coal to offer and Eskom wanted to extend the contract by another R2.9bn.

During the interview in April this year, Eskom explained that the request for a R2.9bn expansion of the Brakfontein contract was as a result of Eskom’s earlier agreement from June 2015 to increase deliveries to Majuba power station to 200 000 tonnes of coal a month.

“What Eskom decided to do was [to be] more proactive – because actually it was agreed on prior and we should have just continued – we opted to inform National Treasury to say, ‘By the way we were supposed to get [a certain number of tons] and this [additional amount] was supposed to kick in in October. We would like to now exercise this requirement,’” Nteta said.

What Eskom was asking for was to increase the already inflated contract from R3.8bn to R6.7bn. Treasury baulked and told Eskom it could not support Eskom’s decision to take further coal from Brakfontein until the year-long Treasury investigation was completed.

2017: Eskom on the ropes

We’re now in mid-2017 and the empire that the Guptas built at Eskom is crumbling.

Brian Molefe has been removed as chief executive, Matshela Koko is under investigation and unlikely to return to his position as acting chief executive. Meanwhile, both Parliament and Treasury are demanding answers to know why Eskom rolled out red-carpet treatment for the Guptas.

By our calculation the Guptas have received contracts worth R11.7bn from Eskom for coal alone. None of these contracts was awarded as the outcome of a competitive bidding process, and the R11.7bn does not include the contracts that Tegeta inherited when it bought Optimum Coal, nor does it include invoices totalling R419m for management consulting and advisory services delivered to Eskom by Trillian Capital Partners, a company majority owned by Salim Essa.

Last week, we wrote to Eskom asking how it planned to deal with allegations contained in the #GuptaLeaks considering that Eskom’s former chief executive (Molefe), Eskom’s former acting chief executive (Koko), Eskom’s chief financial officer (Singh), Eskom’s chairman (Ngubane) and half of Eskom’s board were named and potentially implicated by the emails.

Eskom chose not to respond to the three pages of questions we sent; instead spokesperson Khulu Phasiwe said Eskom supports Public Enterprises Minister Lynne Brown’s decision to institute an investigation via the Special Investigating Unit into all the allegations against Eskom and will fully co-operate with the investigation.

“As you may be aware, the Minister of Public Enterprises Lynne Brown said … that she is in the process of instituting an inquiry into these allegations with the aim of getting to the bottom of these matters once and for all. Eskom supports the establishment of this enquiry, and will co-operate with the investigators once that process gets underway. In addition, the National Treasury has also been investigating these contracts since July 2015, and as the Treasury has informed Scopa … it is happy with the level of co-operation it is getting from Eskom in getting to the bottom of these allegations.”

The Gupta family’s lawyer did not respond to similarly detailed questions, but told amaBhungane that the Guptas could not comment on the #GuptaLeaks until they had a copy of the leaks in their possession.

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

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South Africa – Winnie attacks Zuma over state capture; Zuma delaying tactics

Huffington Post (SA)

Winnie Madikizela-Mandela Warned The ANC About State Captur.

The struggle icon says her ANC is not recognisable in the current leadership of the ruling party, which is “haemorrhaging” and “in trouble”.

07/06/2017 10:28 SAST | Updated 2 hours ago

Former anti-apartheid activist Winnie Madikizela-Mandela says she doesn’t recognise the African National Congress (ANC) anymore.

In an exclusive interview with HuffPost SA, Madikizela-Mandela said that corruption in the ruling party is not part of the ANC she fought for during the the anti-apartheid struggle.

“The ANC of our forebears has disappeared,” she said. “Every day you open a newspaper, there are stories about this corruption, capture of the state, the ANC is also captured … This is the news we read today about my ANC.”

Madikizela-Mandela (80) says the ANC has “serious problems”.

“Not even a fool can pretend that we don’t have problems,” she said. “We have very, very serious problems. The ANC is haemorrhaging. We are in trouble.”

Madikizela-Mandela said she took the current corruption allegations against the party personally. “Hopefully, after bleeding and haemorrhaging as it does, somewhere we are going to find an antidote,” she said. “We’ll bring it back to its former glory.”

Madikizela-Mandela said she told the party’s leadership at the Codesa negotiating table in the 1990s that things were going awry, adding that these problems were to be expected. “There are human beings who are doing [this] to the ANC,” she said. “This is what happens to revolutionary movements … and I warned about that 23 years ago.”

Perhaps emboldened in a new documentary on her life that is more sympathetic to her character than previous stories about her choices, Madikizela-Mandela said she imagined an ANC and South Africa that was led by Chris Hani. Hani, who had a more social political ideological leaning than other leaders of the ANC, was assassinated in 1993.

“Tragically, I think we will be lucky if we ever get to the bottom of it. Chris Hani was not assassinated by the right wing. There were more sinister forces than Janusz [Waluś],” she told HuffPost SA.

As part of a radical block within the ruling party, she was forced to work as a soldier on the ground in Soweto during her ex-husband Nelson Mandela’s incarceration. Because of her unparalleled popularity with the public, she was banished from her marital home and pushed to the sidelines by the apartheid government.

But Madikizela-Mandela ended off with a message of hope to South Africans.

“We are aware of the grave challenges today,” she said.

“I wish [to give South Africans] a message of encouragement, and tell them that not all is lost in the African National Congress. We are hoping, us remnants left of the original African National Congress, that we will be able to restore it to its dignity, to its former glory.”


Mail and Guardian

State capture probe is a JZ delay tactic

No go: A commission of enquiry into state capture will take years to complete, while tax-funded governance institutions such as the NPA, headed by Shaun Abrahams (above), show no will to act. (Oupa Nkosi)
No go: A commission of enquiry into state capture will take years to complete, while tax-funded governance institutions such as the NPA, headed by Shaun Abrahams (above), show no will to act. (Oupa Nkosi)

President Jacob Zuma and the ANC have suddenly become keen on the appointment of a judicial commission of inquiry into allegations of state capture. Initially, there appeared to be furious resistance to the recommendations of then public protector Thuli Madonsela to this effect. A deluge of further allegations has clearly forced the hand of the ruling party, save for the legitimate objection that it is a presidential prerogative to appoint a judge to head the commission.

Of course, the ANC’s concession comes with a qualification: a commission must investigate all forms of possible state capture since 1994. The scope of this proposed inquiry going back more than 20 years will take years to complete. Recall how long the Marikana inquiry took under the leadership of a most experienced judge who was asked to examine a finite set of events.

The act of appointing a commission is an act of decommissioning, in that, once appointed, the commission will suspend the debate about state capture for a few years, at best. It is a classic case of Zuma kicking for touch, thereby ensuring that the political ball will be out of play for sufficient time to ensure the appointment of a suitable presidential successor.

The state capture allegations obviously call for urgent criminal investigation followed by the possibility of criminal trials. Consider the evidence already in the public domain.

The public protector produced a report in the last days of her term of office, presumably fearing that her successor would not be willing to continue the probe, which would have justified more serious remedial action than the appointment of a commission of inquiry.

Subsequently, former Cabinet minister Ngoako Ramatlhodi claimed that, as a result of his refusal to kowtow to Eskom’s pressure to favour the coal deal with the Guptas’ Optimum company, he was fired as minister of mineral resources in favour of Mosebenzi Zwane. Shortly thereafter the South African Council of Churches released a report documenting activity involving Cabinet ministers, officials of state-owned enterprises and the Gupta family, suggesting wide-scale “looting of state resources”.

A group of researchers working through the Public Affairs Research Institute then joined the dots in a report entitled Betrayal of the Promise, which painted a picture of a sophisticated takeover of the state by the Guptas and the president and his cohorts. The ink was barely dry on this report when the City Press and the Sunday Times published a string of emails that corroborated these earlier allegations — and then the nation learnt that there were more than 100 000 emails, which would be released gradually, doubtless showing further nefarious activity.

In the kind of democracy that was envisaged when the Constitution was approved, institutions created therein and pursuant to further legislation would have already performed their legal duties. To be absolutely clear: an anti-corruption unit worthy of the name would have demanded all this evidence, including the published emails, and instituted a full-scale investigation with a view to bringing charges without fear or favour.

If these emails are shown to be authentic, and to date there is no denial that they are, the National Prosecuting Authority (NPA) has more than enough evidence to bring charges against a host of people on grounds, inter alia, of bribery and corruption.

If the NPA showed 10% of the enthusiasm it exhibited when it sought to charge then finance minister Pravin Gordhan on a charge sheet based on a manifest disregard for basic legal principles, we would at the very least have been reading lengthy charge sheets against those who consistently appear in this mountain of allegations, most of which have been in the public domain for more than a year.

And what about the former public protector? Could it seriously be argued that, if Madonsela were still in office, her office would not have conducted a further investigation into sustained allegations that go to the heart of the governance of South Africa?

There has been no reaction from any of these institutions, which are so central to the preservation and promotion of the core constitutional values of transparency and accountability. In itself this serves to confirm the allegation that these institutions no longer perform as intended and have themselves been captured. The consequences are dire: given that there are many thousands of emails yet to be disclosed, the governance of the country will stagger from crisis to crisis as the institutions tasked with solving the problem say, in effect: “Frankly, we don’t give a damn!”

To return to the president’s new enthusiasm for a commission of inquiry, South Africa should say no, thank you. We do not want to wait three more years before we find out whether the country was put up for sale. There are at least three institutions paid for by the taxpayer to ensure that corruption and bribery are investigated and, if necessary, properly prosecuted, and relevant additional remedial action taken.

The call should be to the NPA, the Hawks and the public protector to do their mandated jobs expeditiously. That is the way a democracy deals with this level of allegation in matters that go to the heart of government.

Serjeant at the Bar

Serjeant at the Bar

Serjeant at the Bar is a senior legal practitioner with a special interest in constitutional law.

South Africa – will Gigaba topple Zuma?


2017-06-07 07:40

Finance Minister Malusi Gigaba.(Photo: AFP)

Finance Minister Malusi Gigaba.(Photo: AFP)

There has been an intense focus on the ever-shifting topography of the pro-Zuma vs anti-Zuma camps. Analysts and journalists have for months been counting heads, trying to figure out which side of the NEC is dominant, in the hope that the anti-Zuma camp will eventually be strong enough to oust the president.

As the recent NEC proved, focussing on the numbers is ever a reliable indicator of the outcome of any ANC process. The ANC simply does not take decisions by a show of hands or voting. The ANC continues to operate on the basis of consensus. If an agreement cannot be reached on this basis, the default position is to agree on a process which could lead to a consensus, or more likely by delaying the issue long enough to be forgotten or overtaken by a bigger problem.

So those who keep on hoping that enough people in the NEC will eventually jump ship to the anti-Zuma side or that enough ANC MPs will vote for his removal during a vote of no confidence against the NEC’s wishes, just don’t understand how the ANC works.

Does that mean that there is no other way of getting rid of No1? Are we stuck with President Zuma until the ANC Electoral Conference at end of the year or even, horror of all horrors, till the 2019 elections?

There have been some whispers amongst ANC cadres about the possibility of a group of senior Zuma-ites asking the president to step down. They emphasise that those involved won’t necessarily be jumping ship to the Ramaphosa camp, nor would they support Ramaphosa as the next president. The reason for such a radical move would be for their own political career advancement.

But who could be brave enough to lead such a group?

A few names have been thrown around, but if these rumours are correct, my money would be on Malusi Gigaba, our not-so-new finance minister. There is no doubt that Gigaba is ambitious and would like to be in the top job one day. He has worked hard for it and has the pedigree for it, having been, for example, ANC Youth League President for three terms (1996, 1998 and 2001). Despite Zuma’s insistence that he is promoting young people, Gigaba, who is 46 years old, is really the only younger person coming up through the ranks of the ANC with real momentum.

Despite tailoring his image to suit the position, he is still too young to take on the leadership race. He needs another five to ten years before he will be taken seriously enough in the ANC to be considered for the no 1 position. However, it is important for him to position himself correctly over the next decade or so, in order to be ready when the time comes for him to make the big move.

But this is where it gets tricky. Gigaba will know that he can easily be caught on the wrong side of history. Things are not looking good for him. Despite his best attempts to distance himself from the Guptas, his association with them follows him like the bad smell off a wet dog.

As finance minister he has tried to say the right things to everybody about everything, but his earnest delivery has not convinced many. As would have been the case for anyone who replaced Pravin Gordhan, Gigaba has found it impossible to dispel the suspicion that he is a Zupta puppet.

Being a shrewd politician, Gigaba will also know that the road from here could only lead to more media exposés, commissions of inquiry and possibly even court cases. And these do not enhance the CV of any president in waiting.


Well, unless he can do something that will catapult him to the right side of history -something that can make him an even bigger public, business and media darling than Pravin Gordhan. Nothing would do that more speedily and effectively than being the one who plays a pivotal role in ending the Zuma era.

Of course timing is everything. Gigaba will first need to know that he will succeed in his mission. He will have to be joined by other senior Zuma-ites willing to take a long term bet on their political futures. This group will also have to be convinced that they will not be met by a revolt from the pro-Zuma camp in the NEC, so they will have to be sure that the winds of change are blowing their way.

Of course the question remains how loyal Gigaba is to the president. Despite his insistence to the contrary, rumours persist in the ANC that he is still hurt by the apology he was reportedly instructed to make to King Goodwill Zwelethini in 2015 after criticising the king’s statements during the xenophobic attacks. Yet, I have seen how closely he and the president interact in Parliament. They look very fond of each other and clearly Gigaba would not have been given his current position if that was not the case.

Then again, as we all know: There are no friends or loyalties in politics – especially not when it comes to power.

The risks are many, not least of all political suicide, but Gigaba faces a dilemma. If he has the courage to ensure the end of the Zuma rule, the rewards will be huge and will ensure his place in the history books of this country. If not he will almost certainly be part of the collateral damage of the Zupta fiasco, for which he will be harshly judged in future.

– Melanie Verwoerd is a former ANC MP and South African Ambassador to Ireland.

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South Africa – Hawks ramp up investigation of the Guptas

City Press

2017-06-04 06:01

Law enforcement agencies are intensifying four investigations into allegations that the family moved billions of rands out of South Africa.

But it is not only the Guptas who find themselves under scrutiny by the Hawks’ Serious Corruption Investigation unit.

City Press has also obtained documents showing that the Hawks are investigating former Eskom chief executive officer (CEO) Brian Molefe, and President Jacob Zuma’s son Duduzane.

A tranche of documents detailing the status and progress of the investigations show that Hawks’ detectives have:

– Obtained detailed bank statements from Molefe and his “profile” to establish if he received any “kickbacks” from the Gupta family or their businesses;

– Obtained detailed statements of seven Gupta-owned companies for expert analysis;

– Interviewed Eskom’s head of procurement;

– Approached Treasury to request assistance with information relating to Tegeta Exploration, the family’s mining company;

– Forwarded information to prosecutors regarding allegations that the Guptas offered former deputy finance minister Mcebesi Jonas the job of his boss, and allegedly offered him a R600m bribe; and

– Had little success in convincing former ANC MP Vytjie Mentor to cooperate with their investigation into her allegations that the Guptas offered her the job of public enterprises minister if she would assist their airline in securing a lucrative route.

Of Brian Molefe, one of the reports states:

“A Financial Intelligence Centre (FIC) request was made on the CEO of Eskom Mr Brian Molefe in order to establish his financial profile on whether there was any kickback to him or any other member of his family paid by the members of the Gupta family.

“The Gupta companies from which the unit requested financial statements include: Tegeta Exploration, Shiva Uranium, JIC Mining Services, Optimum Coal, TNA Media, Sahara Computers and the Koornfontein Coal Mine.”

The reports are marked “secret” and titled “Task Team Investigations: Pre-State Capture Report” and “Task Team Investigations: Post-State Capture Report”, referring to former public protector Thuli Madonsela’s State of Capture report.

The charges being investigated, however, do not relate to Madonsela’s report, but from charges laid by several politicians, including the Economic Freedom Fighters’ Floyd Shivambu, the DA’s Natasha Mazzone and David Maynier, the Congress of the People’s Dennis Bloem, and Mentor.

The documents also state that investigators have encountered resistance and received little cooperation from witnesses.

According to the reports, investigators have had to resort to requesting National Assembly Speaker Baleka Mbete’s intervention because some reluctant witnesses are members of Parliament.

City Press has also learnt that all state capture-related investigations have been removed from different police stations around the country – including from Cape Town, Randburg and Rosebank – and consolidated at the Hawks’ head office in Silverton, Pretoria.

One of the reports indicates that a Hawks detective struggled to get Mentor to tell him the exact dates, times and itinerary of her trip to Johannesburg to meet Zuma, during which she landed up at the Guptas’ Saxonwold compound.

The detective asked for detailed information about the car that picked her up from the airport, a copy of her invitation letter from the presidency, names of those present in the meetings she attended, and who said what.

“All the above-mentioned information [was] requested from Ms Mentor on several occasions and she failed to provide such. She was given more than one chance to make the information available, without success,” said a junior detective on the case.

Hawks spokesperson Hangwani Mulaudzi refused to comment on the investigations, saying “we do not conduct our investigations via the media”.

Hawks put pressure on the FIC

City Press has established that last week, the Hawks asked the FIC to provide the unit with detailed and specific information about the Gupta family’s alleged suspicious transactions.

This took place at a meeting in Pretoria on May 23 – before the news of the #GuptaLeaks email scandal broke. Present at the meeting were officials from the SA Reserve Bank (Sarb), the FIC and the Hawks.

They met to discuss the FIC’s certificate, attached to the court application brought by then finance minister Pravin Gordhan, seeking confirmation that he could not interfere with the country’s banks that closed the Guptas’ bank accounts.

The report showed 72 suspicious transactions totalling more than R6 billion.

City Press has learnt that, during the meeting, the Hawks requested the FIC officials to provide details because it was too vague to act upon.

A senior Hawks official privy to the meeting said:

“There was a meeting that was held at the Reserve Bank last week. We wanted to know if the money eventually left the country. We really wanted to know if the money went out or not.”

Another senior Hawks officer, who was part of the investigation team when the ­Gupta case was initiated, said “preliminary investigations have been conducted”.

“The FIC report must tell you which transactions, otherwise you could be looking at 1 000 or 2 000 transactions and you wouldn’t know which ones are suspicious,” he said.

“They are the ones who must tell us which ones are suspicious, otherwise you could be looking for a needle in a haystack. Without them saying this is suspicious, these are the dates, you can’t do anything.”

He also revealed that there had been tensions between the Hawks and the FIC.

“Their reaction at the time was, ‘Look, we can’t help you.’ And we said to them, ‘You can’t say we can’t help you.’” A source close to the FIC said that the agencies were now working the cases together.

A senior law enforcement officer with knowledge of the FIC report said collecting information on the Gupta accounts “was a highly sensitive exercise that was assigned to specific ­individuals.

It was strictly controlled and very few people wanted to deal with it.”

He said the FIC had flagged numerous of the Gupta family’s financial transactions, amounting to billions of rands, as money laundering.

“These were complex transactions, including loans between companies in the Oakbay Resources group and others overseas. The FIC doesn’t investigate, as such, they forwarded the information to the Hawks and Sarb.”

Two other sources in government finance said Sarb had finished compiling a report on the transactions.

“I doubt the report will ever see the light of day. Not only is it a controversial report, but both the FIC and the Reserve Bank are highly secretive institutions,” the official said.

Sarb spokesperson Jabulani Sikhakhane declined to comment, saying “the Reserve Bank does not comment on meetings that may or may not have taken place”.

National Prosecuting Authority spokesperson Luvuyo Mfaku said one docket containing a Gupta probe was referred back to the Hawks for further investigation.

The Guptas’ lawyer, Gert van der Merwe, did not respond to calls and SMSes sent to him yesterday afternoon.

South Africa: ANC calls for Zuma GuptaLeaks investigation


Jacob ZumaImage copyright Reuters
Image caption President Jacob Zuma has survived many previous accusations of corruption

South Africa’s ruling party has called for an investigation into emails which appear to show allegedly corrupt links between President Jacob Zuma’s family and wealthy businessmen.

The African National Congress (ANC) said the allegations questioned the credibility of the government and such matters could not be allowed to fester.

Mr Zuma recently survived calls for his resignation by some senior ANC members.

The allegations have been dismissed as a fabrication by Mr Zuma’s lawyers.

The Gupta family of businessmen has said the leaks were “politically inspired”.

Mr Zuma has become increasing unpopular in recent years amid accusations of corruption and not doing enough to tackle poverty.

There have been mass protests calling for him to step down.

One of the revelations in the emails, known as GuptaLeaks, is that President Zuma was hoping to take up residency in the United Arab Emirates. A claim that was denied.

Others appear to show that the Gupta family exerts undue influence over the government.

Grey line

Have Jacob Zuma’s nine lives run out? Milton Nkosi, BBC News, South Africa

Demonstrators take part in a protest calling for the removal of South AfricaImage copyright Reuters

By calling for an investigation, the African National Congress is putting its own leader under pressure to come clean.

At the centre of the alleged scandal is President Zuma’s son Duduzane, a business partner with the controversial Gupta family.

Some of the emails released by local media allege that Duduzane has been playing the role of middleman between his father and private business interests.

This looks like the ANC is slowly washing its hands of its 74-year-old leader. They know he will not be at the helm in six months’ time and so the dominos are beginning to fall.

Mr Zuma’s obituary has been written many times before. But even so, it does feel like Mr Zuma’s nine lives are gradually coming to an end.

Mr Zuma is due to step down as ANC president in December and his ex-wife Nkosazana Dlamini-Zuma and Deputy President Cyril Ramaphosa are vying to replace him.

His term as national president expires in 2019.