The Chairperson of the State Capture Inquiry, Deputy Chief Justice Raymond Zondo, had a barrage of questions for former Free State’s Head of the Department (HOD) of Agriculture and Rural Development, Peter Thabethe, on Friday, 4 October 2019.

Thabethe continued his evidence on the doomed Vrede Dairy Project in the Free State. A day prior, he responded to questions based on the version of his former political principal, Mosebenzi Zwane, who previously served as the Free State’s Member of the Executive Council (MEC) for Agriculture and Rural Development.

Thabethe’s term ended in April 2018. Under Zwane’s political leadership, he was an essential government player in the Vrede Dairy Project, which began in 2012.

Gupta connection “was not clear” to Thabethe

The project, and its lost monies, link to the politically-connected Guptas via a network of Free State politicians and business allies, such Kamal Vasram, who was the sole director of the project’s implementing agent, Estina, until mid-2015.

Vasram and Thabethe were among eight co-accused in the prominent Estina case in the Bloemfontein Regional Court last year. The matter lasted nine months, from February until November when the National Prosecuting Authority (NPA) provisionally withdrew the charges.

Evidence leader Advocate Leah Gcabashe SC remarked on Estina’s physical address reflected in the agreement with the Free State government; it was the same Sandton address associated with several Gupta-linked companies.

Thabethe said, “I may not have been aware at that time, Chair, although I have been to these offices. The relationship at that time was not clear.”

What’s the problem?

National Treasury commissioned a law firm, ENS, to investigate the dairy scheme in 2013. The firm’s investigators approached Vasram seeking an interview. Vasram indicated he was muzzled by a confidentiality clause in Estina’s contract with the Free State government and referred the investigators to Thabethe, who he said could provide permission.

Thabethe proved obstructive and the investigators did not gain a critical interview with Vasram. On Friday, Thabethe provided his reasons: he “could not” give the investigators access to a third party, and he wanted to protect Estina’s confidential intellectual property about the dairy.

Gcabashe noted that Vasram told the investigators “he had to get permission” from Thabethe. She asked Thabethe if Vasram sought the HOD’s consent. “Chair, I have not received the request from Estina although I remember discussing this with the investigators,” said Thabethe.

Thabethe’s problem was that the investigators wanted to interview Vasram alone. “They needed an exclusive interview outside the department which I could not do,” said Thabethe.

“Why not?” asked Zondo.

The final report ENS produced for National Treasury records Thabethe’s stance, which Gcabashe read as follows: “Mr Thabethe refused to assist ENS and stated that we should conduct our own investigation without his assistance.”

Thabethe explained he wanted a lawyer representing his department to attend any meeting between the investigators and Vasram. “But why would you not allow him to go without a lawyer from the department?” asked Zondo.

Thabethe replied, “We did not know what would be those issues at stake.”

The resistance is puzzling if one imagines Thabethe was working in the Free State government’s best interests, and this point was reflected in comments from Zondo and Gcabashe.

“Mr Vasram […] says if you gave approval he was happy to talk, number one. Number two, these investigators are doing work for National Treasury. You are part of the same government,” said Gcabashe.

Zondo said Thabethe’s department and Estina had an agreement in which Estina was going to benefit from taxpayer’s money. Therefore, suggested Zondo, one would expect Thabethe would say to National Treasury “by all means” go and meet with Estina and he might even offer to pick up the phone to coordinate.

“Why didn’t you say that? What’s the problem with saying that?” asked Zondo.

“Maybe at that time there was a misunderstanding,” said Thabethe. Later, he indicated he sought a meeting so the three parties could reach a compromise. “All I asked was that we bring Estina, the department, and National Treasury and we sit together and discuss and agree.”

“Yes, but why do you want an understanding? They are investigating. They are investigating Estina. Why don’t you give them permission?” asked Zondo asked.

Thabethe responded, “I hear you, Chair.”

Thabethe said that, at the time, his understanding of legal issues was different. On the matter of confidentiality in the agreement, which Vasram cited when declining an interview with the investigators, the Chairperson and evidence leader were again puzzled.

Tricks of the trade

Gcabashe said, “I can’t quite understand the nature of the confidential information that you sought to protect with this clause.” She asked Thabethe what was the nature of the confidential information referred to in Clause 10 of the agreement between Estina and the Free State Department of Agriculture and Rural Development.

“What I had in mind is that Paras through Estina would be doing products on the project. They are the sole owners of the products on the project. They brand them like any other company that has intellectual property on any other projects,” he began.

Thabethe testified were Vasram to speak to investigators it would “expose” intellectual property on the dairy project, such as the manner in which it was constructed, and that was his difficulty.

“It seems that I was protecting Estina more than the department,” began Thabethe.

“Yes,” said Zondo.

But Thabethe continued justifying his conduct, saying that was mere appearance, not the true case and, again, he was protecting intellectual property from competitors.

If you are at this moment wondering why Thabethe had difficulty with investigators tasked by National Treasury to scrutinise Estina learning of intellectual property relating to a Free State dairy, you are not alone.

Zondo asked Thabethe about his difficulty and Thabethe, after some humming and hawing, he did not want to speculate. He then appealed to his counsel for back-up.

Estina scores over R280-million

Later on Friday, Thabethe faced a grilling on dairy project’s finances. Prior to a final feasibility study being concluded and approved, the Free State government paid Estina R30-million.

According to Gcabashe, the Free State government paid Estina R280,222,652 over several years. In the 2013-14 financial year, Thabethe’s department paid Estina R113,950,000 in four tranches. However, it was a R30-million payment to Estina in 2012, which prompted repeat questions to Thabethe.

Gcabashe said, “These are departmental funds, you had not even received let alone approved the feasibility study at this point when they took the R29-million and put it in a different account. Why could you not say to them, ‘Bring it back?'”

Thabethe said the matter was discussed and he was satisfied with Estina’s explanation that they would use the R29-million to purchase equipment for the dairy.

“Yes, but then why don’t you wait until the final feasibility study is done? You see what outcome it gives you and then you proceed properly,” asked Zondo.

“That could have been done,” replied Thabethe.

“Why was it not done, that’s my question,” said Zondo.

Perhaps nervous, Thabethe laughed and said, “It’s a difficult one, Chair, to answer.”

“But you were the HOD. You were in charge. You were the HOD, you were in charge, you were the accounting officer, you knew that if anything went wrong […] you would have to answer,” said Zondo. He continued:

“And if you started spending some money and a lot of money before there was a final study that told you that what you want to get involved in is viable, you would be putting the taxpayers’ money at risk and you would have to answer. So the question is: why didn’t you wait until all of that was done?”

“Chair, I was convinced that there wouldn’t be any problem,” replied Thabethe.

Zondo referred to previous evidence and said that if Estina had R16 in its bank account when the contract was entered and it received R30-million, it is highly unlikely that Estina paid any pledged monies into the project from their own funds.

“It is something that was worrying me. I was uneasy about it,” said Zondo.

Most of the monies, it must be noted, were stolen. That is: hundreds of millions of rand unaccounted for, till today.

Proceedings resume on Monday, 7 October 2019. DM