South Africa

Days of Zondo

Treasury reveals how SA Inc bankrolled the Gupta media beast

JOHANNESBURG, SOUTH AFRICA – AUGUST 30: The New Age and ANN7 proprietor Mzwanele Manyi during the announcement on the shareholding of his company Lodidox on August 30, 2017 in Johannesburg, South Africa. During the live television broadcast, Manyi revealed that he was the sole shareholder in Lodidox – the shelf company he bought. (Photo by Gallo Images / The Times / Alon Skuy)

A deep dive into electronic government ledgers revealed R260-million in payments to Gupta-linked media companies by provincial and national government departments over several years.

The bulk of those payments were made after February 2011 when Themba Maseko, the former head of the Government Information and Communication Systems (GCIS) was booted from his job after refusing to entertain the Guptas.

National Treasury extracted data via the State Information Technology Agency mainframe to examine the scale of payments to the Gupta-owned media empire.

Testimony by accountant, Jan Gilliland, the director of operations and implementation at Treasury, put the GCIS spend on the Gupta companies at R55-million, making it the second highest funder of the Gupta media interests after the Free State government, which came in at nearly R80-million.

Gilliland, an accountant, explained that National Treasury’s Basic Accounting System (BAS) extracted data that pointed to payments to the Gupta companies, albeit that they were listed in different variations of the names of the companies as they were loaded by individual departments.

His evidence supported testimony by Maseko, who earlier testified to the Gupta plan to lay their hands on R600-m in government advertising spend.

In 2011, the year in which Maseko was removed from his job, the Gupta slice of the government advertising spend via GCIS suddenly rocketed to just over R6-million – more than they made over a five-year period until 2009.

Equally revealing was how, in 2012, upon the arrival of Mzwanele Manyi who replaced Maseko, the combined payments to The New Age media company and its broadcast partner, Infinity Media, increased dramatically to nearly R30-million.

The New Age Media received close to R250-million (about 95% of all payments) from the various government departments, against just over R12-million paid to Infinity, which owned ANN7.

The Commission’s advocate Vincent Maleka, SC, referred to an affidavit by Gupta brother, Ajay, in which he sought to challenge Maseko’s testimony by highlighting that the TV operation only came about in 2012.

He quoted Ajay’s affidavit: “The idea of launching a TV station came about in August 2012. A shelf company which had been purchased had a name changed in December 2012. Building of the studio commenced in January 2013, the studio was completed in July 2013 and we started broadcast in August 2013.”

Based on this, said Maleka, assuming the Guptas only started earning revenue off broadcast in 2014, it was worth noting a significant jump in the total payments.

In 2015 after Phumla Williams was side-lined, the Gupta income from GCIS grew to R66-million. It then dropped in 2016 to R43-million and eventually, in 2018 (as at July), they would make a mere R4.7 million out of the government communications unit, by then back in the hands of Williams.

Williams had earlier testified that she was totally unaware of any payments to the Gupta media companies because the GCIS media procurement system did not permit entries for breakfasts.

However, she told the Commission during her testimony that she was alerted by the Hawks several weeks ago that payments totalling R55-million had been made.

The Commission is expected to hear further evidence later on about how that came about.

The data was compiled for the State Capture Commission by National Treasury and the analysis thereof was based on electronic data submitted by all national government and provincial departments.

Maleka said the manner in which the payments were extracted and collated by National Treasury was important because they reflected all payments by government with references to the procurement of goods and services and payments made.

And, said Maleka, they were relevant to the State Capture Commission’s terms of reference insofar as it relates to the investigation into state capture, fraud and corruption.

National departments spent nearly R100-million on the Gupta companies while R114-million was spent by the offices of provincial Premiers.

The testimony by Gilliland came as the third installment in the Commission’s effort to examine the reason for the removal of Maseko.

He was abruptly removed from his job in February 2011, a few months after Ajay Gupta had called him to a meeting to discuss the government advertising spend and allegedly, the need for him to direct this to the Gupta media operation.

Maseko testified that his removal was announced during a Cabinet meeting he attended as then government spokesman.

At this meeting, former president Jacob Zuma meeting got up to tell ministers who were present that the minister in the presidency, the late Collins Chabane, had an announcement to make. Chabane then informed Cabinet that Maseko would be leaving GCIS and that he would be replaced by Manyi.

The State Capture Inquiry is set to resume on Wednesday when former Public Enterprises Minister, Barbara Hogan, is expected to take the stand. DM


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