State capture: Did the Guptas offer Treasury's top job to Deputy Minister Jonas?
- Marianne Thamm
- South Africa
- 10 Mar 2016 12:02 (South Africa)
A report on Wednesday in the globally influential the Financial Times makes the startling allegation that two weeks before President Zuma fired Finance Minister Nhlanhla Nene in December, the Gupta family met with Deputy Finance Minister, Mcebisi Jonas, at the family's home in Saxonwold, to ask whether he was interested in the job. If true, it presents another piece in a disturbing puzzle of an attempt at state capture. By MARIANNE THAMM.
Just as Finance Minister Pravin Gordhan touched down in London this week on the first leg of his investment roadshow to foreign investors and credit agencies, the influential publication the Financial Times dropped a bombshell of a story highlighting the extent of Gupta family's influence and control of President Jacob Zuma's government.
The story, by Andrew England, makes the startling claim that two weeks before President Jacob Zuma fired Finance Minister Nhlanla Nene, replacing him with backbencher David van Rooyen, the family had themselves met with Deputy Minister of Finance, Mcebisi Jonas, and had asked if he was “interested in the Treasury's top post”.
It is unlikely that a newspaper of standing, like the FT, would risk publishing the serious allegation if it were not sure of its sources. It would also indicate that the Gupta family has intimate knowledge of the comings and goings of Ministers as well as believing it has the power to chose these Ministers. If true, these serious claims would amount to a scandal which should warrant a demand for the stepping down of President Jacob Zuma who enjoys a perilously close (for South Africa) relationship with the Gupta family.
While the Gupta family denied the claim, it is telling that, when approached by England, the Treasury and the Deputy Minister's office “declined to comment, neither denying nor confirming the existence of the meeting”.
A response to a request by the Daily Maverick to the Deputy Minister's office on Wednesday to respond to questions in relation to the Financial Times report had not been forthcoming at the time of writing.
If the Gupta family did indeed approach Deputy Minister Jonas – who was also, according to a Daily Maverick source, allegedly offered a financial inducement – he would have been legally obliged, under the Prevention of Organised Crime Act, to report the matter. The FT exposure of the Gupta's alleged request also begs the question whether Nene too had been aware of the approach to his Deputy Minister.
Evidence of an apparent attempt by the Gupta family at capturing the Treasury is mounting, especially considering that Des van Rooyen arrived at Treasury for his four-day stint as Finance Minister with two as then unnamed advisors who turned out to be Gupta associates Mohamed Bobat and Ian Whitley. Director General of Treasury Lungisa Fuzile was reportedly so outraged that he threatened to resign.
The UK-based publication, Africa Confidential, reported that Bobat and Whitley had informed National Treasury officials that they would be able to sign expenditure and other authorisations on behalf of Van Rooyen.
Bobat and Whitley have been shuffled off with Van Rooyen to the Ministry of Cooperative Governance and Traditional Affairs where Whitley is now Van Rooyen's Chief of Staff.
Last month Africa Confidential revealed that the Gupta family, who would be the main beneficiaries of a R1 trillion nuclear deal, had influenced President Zuma to appoint Van Rooyen in an attempt to secure uranium contracts for nuclear plants in a similar fashion the family has gone about capturing a coal mine which supplies a portion of the Arnot power station's power needs.
Van Rooyen's appointment as Minister of Finance caused financial chaos and resulted in the tanking of the Rand (which benefitted some) until President Zuma was forced to re-appoint Pravin Gordhan.
In the Financial Times piece England writes that under President Zuma's watch “predatory networks of patronage and cronyism are effectively looting the state” and that the phrase “state capture” had become part of the South African lexicon.
“And as scrutiny on their interests and role mounts, the Guptas are increasingly portrayed as a symbol of the malaise afflicting the nation. They have been accused of overstepping the mark in a range of areas, from wielding influence over state officials and appointments, to using their connections to win government contracts. The allegations - none of which is proven - have proliferated amid battles for power inside the faction-plagued ruling African National Congress and the government,” he writes.
In the light of all of the above, Gordhan will have a tough job on his roadshow – he will soon head for the US - where he will be meeting with key investors and institutions to unpack South Africa's budget and the way forward in a precarious economic environment as well as convince these investors that South Africa is not a banana republic and indeed “Africa's most industrialised nation”.
England points that it is not only opposition parties inside South Africa who have questioned the Gupta's influence on Jacob Zuma's government but also three former chiefs of intelligence – Gibson Njenje, Mo Shaik and Jeff Maqetuka – who all suggested the Guptas should be investigated. All three resigned after facing resistance from then Minister of State Security Siyabonga Cwele.
Ranjeni Munusamy, writing in the Daily Maverick in 2013, revealed how Njenje as former NIA chief, Shaik as former head of foreign intelligence and Jeff Maqetuka as former Director General of of State Security (all of whom were close to Zuma) all resigned a few months apart in 2011.
“Alarm bells started ringing in the intelligence agencies about the conduct and dealings of the Gupta brothers and Njenje ordered an investigation into the family’s inappropriate influence on South Africa’s top political leaders and government officials. When Cwele learnt of this, he ordered that the investigation be stopped immediately.”
Munusamy wrote that Njenje, backed by the other two DGs, tried to warn that the Guptas behaviour constituted a “threat to national security” and if allowed to continue would compromise the credibility of the state. Cwele refused to listen or investigate whether there was legitimate cause for the investigation.
“This soured relations between Cwele and the DGs, which over the next few months deteriorated to the extent that the minister asked them to leave,” wrote Munusamy.
The warnings about the Guptas, she wrote, later came back to haunt the Zuma administration (and South Africa) and now appears to be the toxic gift that keeps on giving.
In April 2013, the clearly emboldened Gupta family flew a jet filled with family, friends and wedding guests into the National Keypoint, the Waterkloof Air Force Base. A government inquiry later found that the use of the base by the Gupta wedding party had merely been a “national security incident” and concluded that the “activities of some of the persons involved were driven by the undesirable practice of undue influence and abuse of higher office”.
In January that year senior ANC officials met to “deal decisively with the threat of state capture” but three years later it is no longer a threat but a reality, even though ANC Secretary General Gwede Mantashe might be of the view that only certain “individuals” had been captured and not the state.
Since the Guptagate scandal – as the Waterkloof landing has become known - there have been several others, all involving the Gupta family, including appointment of their ally Mosebenzi Zwane as Minister of Mineral Resources, as well his trip accompanying a delegation from the Gupta-owned Tegeta Exploration & Resources to visit Glencore in Switzerland last year in an attempt to negotiate the purchase of Optimum Colliery.
Eskom issued a R2.5 billion penalty to Optimum for delivering sub standard coal resulting in the colliery being placed in business rescue as its operations were no longer financially viable. The mine was bought by Tegeta in December for R2.15 billion. Three weeks before the deal, Duduzane Zuma's Mabengela Investments snapped up 28.5 percent of the deal while the Gupta's Oakbay Investments gobbled up 34.5 percent. Insiders have said that South African mining authorities used the threat of regulatory action to pressure Glencore into the sale. Optimum supplies Eskom's Hendrina plant while Arnot is one of seven “interim suppliers” to Eskom. The state-owned company will make its final suppliers known at the end of this month and there are bound to be no surprises.
Meanwhile Exxaro Resources, which supplied Eskom with coal for 40 years, has shut down its operations, affecting 1,800 jobs. James Lorimer, DA Shadow Minister of Mineral Resources, has said the contract was ended in favour of a new deal with the Gupta-Zuma owned Optimuim.
"Eskom ended the contract... in favour of coal to be trucked in from Optimum," he said. "That looks like a duck”.
The current SARS Wars saga and the bitter battle between Pravin Gordhan and Commissioner Tom Moyane, a Zuma appointee, also suggests an attempt at capturing the country's revenue service. On 1 March, journalist Max Du Preez revealed in a column that one of the keys to the hostility between the two men is a secret dossier that contains “dynamite allegations of corruption, fraud, front companies and foreign bank accounts against prominent benefactors of President Jacob Zuma”.
“Several billions of rands are at stake and Zuma would be extremely embarrassed if the alleged dossier were to be acted upon. It could well open him up to prosecution himself and/or to a massive income tax bill – at least for evading donations tax,” wrote Du Preez.
The revelations in the Financial Times on Wednesday and the allegation that the Guptas offered the Treasury to Jonas present a new, disturbing piece in a dark puzzle. Taken together, the political domination of the NPA, SAPS, Hawks and State Security, as well as the SARS affair, coupled with the shockingly wrong appointments of Zwane as Minister of Mineral Resources and van Rooyen as Finance Minister, it all now begins to make sinister sense.
The only man who could really act decisively in cleaning up the mess is the man who, through his friendship and family connections, is deeply implicated in it all. President Jacob Zuma is hardly likely to want the truth revealed.
But the President does not exist in a vacuum. He is part of the ANC, the oldest liberation movement in Africa. The party has survived 104 years in the most adverse of conditions but never before has it faced such a critical challenge. Is the ANC up to this grave challenge of fixing a mess that could possibly shake the foundations of the South African state and society?
Breaking his silence with regard to the SARS “rogue unit” saga earlier this month Gordhan hinted at the source of the malaise that England says afflicts the nation; “There is a group of people that are not interested in the economic stability of this country and the welfare of its people. It seems they are interested in disrupting institutions and destroying reputations.”
As more information bubbles to the surface in this toxic mess, it appears that Gordhan is a well informed man. DM
Photo: President Jacob Zuma, Atul Gupta (Reuters, Sapa)
- Marianne Thamm
- South Africa