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Guptas ran a racketeering enterprise, says Zondo, while...

South Africa

DAYS OF ZONDO, PART 2

Guptas ran a racketeering enterprise, says Zondo, while also finding that Malusi Gigaba’s testimony should not be believed

From left: Illustrative image | Gupta lieutenant Salim Essa. (Photo: Supplied) | Ajay Gupta. (Photo: Gallo Images / Business Day / Martin Rhodes) | Brian Molefe. (Photo: Gallo Images / Sowetan / Esa Alexander) | Atul Gupta. (Photo: Gallo Images / Business Day / Martin Rhodes) | Eric Wood. (Photo Supplied)

Judge Raymond Zondo, in Part 2 of the commission’s report into State Capture, has recommended scores of corruption and racketeering investigations.

The heart of darkness traversed in the second part of the State Capture Commission of Inquiry’s report has seen Judge Raymond Zondo find that the Gupta network of corruption amounts to racketeering at Transnet. 

There is no charge of racketeering in South Africa’s arsenal of anti-corruption laws. However, organised crime legislation provides a finding of racketeering to be justified by the commission for certain offences.  

transnet denel state capture report
Secretary of the Zondo Commission Itumeleng Mosala presents Part 2 of the State Capture report to the Director-General in the Presidency, Phindile Baleni. (Photo: Elmond Jiyane / GCIS)

“The activities of the Gupta enterprise extended to various SOEs and… will be sufficient to sustain a racketeering conviction,” the report found. 

Zondo found that former Transnet CEO Brian Molefe, former CFO Anoj Singh, the Gupta lieutenant Salim Essa and the Trillian and Regiments boss Eric Wood should face multiple police investigations and possible corruption and racketeering charges in terms of the Prevention of Organised Crime Act. 

The report says former public enterprises minister Malusi Gigaba’s testimony should not be believed and Molefe’s denials are not credible. The Transnet stream of inquiry covered the period between 2009 and 2018. The report finds that the commission established capture at the transport utility, around the purchase of three sets of locomotives bought in packs of 95, 100 and 1,064. 

In addition, IT, financial advisory and advisory transaction contracts were also corrupt. The commission found billions of rands in kickbacks were paid from China South Rail (CSR), China North Rail and China Railway Group to Essa’s and Gupta-linked companies. Essa’s company Tequesta, for instance, was found to have received R2.8-billion, while the report found that Transnet’s expansion of its manganese ore line was tainted by corruption.  

Henk Bester of Hatch testified on how Essa had met him at Melrose Arch in Johannesburg and told him that Molefe would become Eskom boss, before Molefe moved to the electricity utility. He also gave insight into how corruption worked at Transnet. 

“The evidence about these incidents provides reasonable grounds to suspect corruption in that Mr Essa and Mr Singh attempted to make the award of the tender conditional on Hatch’s appointment of their preferred SDPs [supplier development partners],” the report found. 

The report lays bare how Molefe and Singh used their executive power to increase total cost estimates, confine contracts to their preferred bidders, increase the scope of dodgy contracts and override local content and BEE requirements. 

Molefe, the report said, should be investigated and possibly prosecuted in terms of the Public Finance Management Act for a R3-billion advance payment illegally made to CSR. 

The report found that R7.34-billion in kickbacks was paid to companies controlled by Essa and the Gupta enterprise. Essa, Singh and Molefe come up in the long list of recommendations the report made for investigation and prosecution. 

The report also found that Molefe, Singh, former Transnet CFO Garry Pita and former Transnet executive Thamsanqa Jiyane should be investigated for receiving gratifications (bribes).  

The report specifically finds that the police should investigate cash payments made to Molefe and Singh at the Three Rivers Lodge in Vereeniging in July 2014. In addition, the commission recommended that Singh face investigation and possible prosecution for having his Dubai holiday expenses paid by the Guptas. 

The report also recommended that the R17-million severance payment approved for former acting Transnet CEO Siyabonga Gama be reclaimed from the then Transnet board. It found that the Transnet negotiating team should face possible corruption charges in connection with the 1,064 locomotive deal for not acting in the transport company’s best interests.   

Denel

The Denel section of the report has found that the capture of the utility has been established and that the former minister of public enterprises Lynne Brown participated in it. It says that the arms manufacturer suffered enormous reputational damage and that a good growth trajectory was ended when CEO Riaz Saloojee was illegally suspended. Brown was found to have had a close relationship with Essa, with whom she spoke extensively and for long periods on the phone.

The report found that Dan Mantsha, who was chair of the Denel board at its capture crash, should be investigated by the Legal Practice Council. Mantsha had regularly acted for former President Jacob Zuma. This part of the report recommended making it a criminal offence for any person vested with public power to abuse that power.

“Such potential violations might range from the case of a president of the republic who hands over a large part of the national wealth or access to that wealth to an unauthorised [person or body]” to lower-ranking board members and executives, the report recommended. DM

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All Comments 14

  • The quickest way to fix these kleptomaniacs is via the taxman. Freeze all their assets, confiscate everything they have and convict them of tax fraud. While they sit in jail, the investigation into the criminal activities can continue at the usual pace………glacial.

    • SARS would be the fastest way to inflict damage. The crooks almost never declare their income or follow VAT. SARS does not need to prove the source of funds is corruption, merely that the taxpayer was delinquent. Rmember that if a funnel company received R100m and then distributed that to four accomplices, those distributions are not tax deductible unless it can be proven that it was for goods and services actually delivered and case law says bribes are not deductible. China Rail found that out when SARS attached their billions in SA saying payments to the Guptas in Hong Kong are not tax deductible.

      So then SARS merely takes out its calculator for the 300% penalty plus interest and where there is tax fraud it also has a ten year jail sentence at hand. The documents at Zondo and that the Gupta leaks provided should be ample evidence for SARS.

      • Which is exactly why they captured SARS. This will be a good test to see a willingness to actually process these findings in the interest of the people of this country instead of just the cadres.

  • Over-priced deals to under-competent companies has destroyed our infrastructure. Ignoring local content requirements has destroyed our manufacturing capabilities. Allowing billions of rands to be laundered to Dubai has destroyed our economy. Corruption and our inability to produce has destroyed our international credibility. It will take a generation or more to fix this destruction. But still, nobody has been held accountable. CR and NPA wake up!

    • At what point do we start suspecting that the current NPA has been captured? Society cannot function without a prosecuting authority willing and able to prosecute.

  • It seems that everybody is missing the “elephant in the room” . That is the fact that the ANC can not survive without the proceeds of these obvious crimes filtering back to them via their front people. Now that the money is drying up they are unable to pay salaries and are in hock to SARS for unpaid PAYE deductions et al. (If we withheld payments can you imagine the result?). The organisation cannot survive on paltry membership contributions from the muppets who actually do pay. Cyril has no option but to turn a blind eye to the corruption because this is their only real source of funding. A subpoena of Cyrils beloved ANC’s bank accounts would clear this up in no time at all.

    • Agree, CR is compromised, conflicted and was in charge of cadre deployment, he is very much part of the ANC and part of the problem, The ANC must be held responsible for the mess they have got the country into. The sooner they are voted out the sooner the brooms and handcuffs can come out without fear or favour.
      ZONDO for president.

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