South Africa

DAYS OF ZONDO, PART 2

State Capture report shines a criminal spotlight on Molefe, Singh, Gigaba, Gama, Pita and Jiyane

From left: Anoj Singh (Photo: Gallo Images / Foto24 / Lerato Maduna) | Brian Molefe (Photo: Gallo Images / City Press / Lucky Nxumalo) | Siyabonga Gama (Photo: Gallo Images / Luba Lesolle)
By Des Erasmus
01 Feb 2022 21

The report made it clear that State Capture started at Transnet with the 2009 resignation of Maria Ramos from her group CEO position ‘and the election of Mr Jacob Zuma as President of the Republic’.

South Africans may get the opportunity to see former serial state-owned enterprises executive and ex-Transnet CEO Brian Molefe crying in public again, as Part Two of the State Capture Commission’s final report makes recommendations that he be investigated with a view to possible prosecution for several potential acts of corruption and racketeering while at the public entity 

The report – covering Transnet and Denel – was released on Tuesday evening, with the chairperson of the commission, Acting Chief Justice Raymond Zondo, saying: “The evidence convincingly establishes that State Capture occurred at Transnet in the period between 2009 and 2018… This was accomplished primarily through the Gupta racketeering enterprise and those associated with it who engaged in a pattern of racketeering activity.” 

The report made it clear that State Capture started at Transnet with the 2009 resignation of Maria Ramos from her group CEO position “and the election of Mr Jacob Zuma as President of the Republic”.  

Molefe was described in the 505-page report as one of the “primary architects and implementers of State Capture at Transnet”, along with former executives Anoj Singh and Siyabonga Gama, who have also been recommended for further investigation with a view to potential prosecution – including racketeering.  

The report says the trio aided in finalising irregular contracts “at inflated prices, variously through deviations, improper confinements and the changing of tender evaluation criteria, in order to facilitate entry for companies involved in the extensive money laundering scheme directed by [Gupta proxy Salim] Essa on behalf of the Gupta enterprise.” 

The state’s freight logistics company had become “the primary site of State Capture in financial terms”, according to the report, which found that “State Capture at Transnet involved the systematic scheme of securing illicit and corrupt influence or control over decision-making”.  

Molefe was appointed Eskom group CEO in February 2011, upon the recommendation of the then minister Malusi Gigaba, despite not being the highest-scoring candidate for the position. Both were friends of the Guptas. Molefe’s appointment was even “predicted” in the since defunct Gupta-owned newspaper, The New Age

It was thanks to a small group of senior executives and directors, who were strategically placed to collude in the awarding of contracts, that Transnet was fleeced of its money. This allowed for the manipulation of procurement processes to ensure that Gupta-linked companies were successful bidders, as well as the inflation of costs and advance payments. 

The report cites Shadow World Investigations director Paul Holden testifying during the commission’s hearings that contracts worth about R41.204-billion were “irregularly awarded for the benefit of entities linked to the Gupta family” or Essa. 

That amount represented 72.21% “of the total state payments in respect of contracts tainted by State Capture”.  

Centralising approval authority at the level of board and senior executives allowed connected executives to “shield” procurement processes, which didn’t allow for scrutiny from other Transnet officials. 

There was also an increased and unwarranted reliance on consultancy firms that were paid for work that should have been done internally. These fees were eventually laundered to Gupta enterprises via Essa. 

The inappropriate use of confinements, emergency procurement and contract variations – the last two being standard for siphoning funds in an unsophisticated manner from lower-level public institutions – had also become preferred tactics.  

The report recommended:

  1. Law enforcement agencies should conduct further investigations as may be necessary with a view to the possible prosecution of Molefe, Singh, Gigaba, Gama, Garry Pita (former Transnet CFO) and Thamsanqa Jiyane (former chief procurement officer at Transnet Freight Rail) on charges of corruption and racketeering relating to cash payments allegedly received during visits to the Gupta compound in Saxonwold, Johannesburg between 2010 and 2018; 
  2. Further investigations as may be necessary with a view to prosecuting Molefe and Singh on charges of corruption in relation to cash payments that were allegedly made to them at the Three Rivers Lodge, Vereeniging in July 2014;  
  3. Further investigations as may be necessary to determine whether Molefe acted wilfully or grossly negligently in contravention of sections 50 and 51 of the Public Finance Management Act (PFMA) with a view to his prosecution on a charge in terms of the PFMA in relation to his agreement on 16 January 2016 to pay GNS/Abalozi an unjustifiable payment of R20-million; 
  4. Further investigations as may be necessary with a view to the possible prosecution of Molefe and Gama on a charge of contravening Section 50(1)(a) of the PFMA and/or on an offence relating to the proceeds of unlawful activities and/or racketeering in relation to their decision to recommend to the board the change in the evaluation criteria in the procurement of the 95 locomotives so as to favour China South Rail Corporation Ltd (CSR) as a bidder for the tender;
  5. Further investigations as may be necessary with a view to the possible prosecution of Molefe, Gama, Singh and Jiyane on a charge in terms of the PFMA for wilfully or grossly negligently contravening Section 50 or 51 of the PFMA by presenting misleading information and failing to disclose material information to the board of Transnet in January 2015 regarding the acquisition of 100 electric locomotives from CSR by means of confinement; 
  6. Further investigations as may be necessary with a view to the possible prosecution of Molefe, Gama and Singh for fraud for contravening the PFMA by misrepresenting to the board of Transnet in April 2013 and May 2014 that the estimated total cost of R36.6-billion for the procurement of 1,064 locomotives excluded provision for forex and escalations when, in fact, it did, in the amount of R5.892-billion; and 
  7. Further investigations as may be necessary with a view to the possible prosecution of Molefe, Singh, businessman Eric Wood and Regiments Capital (Pty) Ltd and any other person associated with them in illegal conduct on charges of corruption in terms of Chapter 2 of the Prevention and Combating of Corrupt Activities Act, racketeering and offences relating to the proceeds of unlawful activity in terms of Chapter 2 and 3 of the Prevention of Organised Crime Act, and in terms of the PFMA (where appropriate) for contravention of the PFMA by acting corruptly and receiving and laundering an amount of R79.23-million paid by Transnet to Regiments on 30 April 2014. 

According to the report, the “recurring elements in all the offences are a pattern of racketeering activity and the existence of the racketeering enterprise”, with the Gupta network comprising a group of associated individuals and entities and thus an enterprise.  

Elements of the pattern of the racketeering activity at Transnet comprised various kickback agreements involving locomotive deals, the inclusion of Gupta-linked companies as supplier development partners on Transnet contracts, various money laundering arrangements involving Regiments Capital and companies associated with the Guptas, and the payment of bribes to Transnet officials and employees. DM

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All Comments 21

    • I completely agree, a civil prosecution drive is the only way forward with this level of corruption and an incapacitated NPA.
      Sitting around and complaining about the incapable state is no longer good enough, it seems it’s up to civil society, ie us, to push forward with the necessary action.

  • In Zondo Part 1, the Accused No. 1 is the former President of the ANC and the country, a certain Jacob Zuma. In Zondo 2, Accused No. 1 is exactly the same person. Is is highly unlikely that Accused No. 1 will be anyone different in Zondo 3. All the other accused, the Gupta’s, Molefi, Koko, Brown, Meyeni, Gigaba, Pita, Moyane, Frazer, certain members of the ANC Executive, some Cabinet Ministers, and a host of others, would not have been able to execute State Capture if it was not for the actions of Accused No. 1.
    Mr. Zuma’s crime is not just of being an enabler of State Capture, he is and was the mastermind of this vast criminal network. His actions is not just one of corruption, money laundering, and the like. His actions is the biggest crime that any criminal can face in any country, that of treason. High Treason against the State and citizens of this country. And he should be prosecuted for just that. And all those that assisted him, listened to him, worked with him in the execution of State Capture should also be prosecuted for High Treason. All other charges are simply add-ons. Mr. Zuma, President of this country for eight long years, is the single biggest criminal this country has ever seen since the birth of a new democracy. He should face the might of the law in all its forms. If not, our country will never be able to find its pride, its love, its loyalty, ever again!

    • Do not forget that he survived a number of motions of no confidence. Every one that voted to support him to strike down these is also culpable!

    • We can but watch the NPA and see if they reach the same conclusion and charge Zuma with High Treason; seems obvious to the “reasonable man”. It would be a Rubicon moment for SA and its law enforcement whose weakened and ineffective state makes a mockery of our democracy.

      • The real problem is that the powers that be hold the purse strings and ensure that the NPA is hamstrung when is comes to prosecution of cadres. Civil action, possibly using crowdfunding seems to be the only way forward.

  • If the NPA is incapable of doing its job then Zondo’s reports are just a waste of time and the Commission a waste of taxpayer’s money. Batohi is obviously working on a new set of excuses as to how her hands are tied and the NPA lacks skills and resources etc etc. If she cannot do the job she was appointed to do she should resign and let someone competent take over.

    • Incapacitated by resources rather than incompetence? It’s easy to throw stones from the outside. It will make no difference then to install another NPA head if they will face the same resource challenges. Bear in mind that the NPA was hollowed out and infiltrated with this in mind. Civil prosecution may be an important strategy here.

  • Can’t believe these various individuals are still walking freely around our streets. Should all be in jail waiting trial already.

  • Zuma & all his corrupt henchman were played nicely by the illegal immigrant family from India. If I was one of these people I would be extremely embarrassed by how easily the Gupta’s manipulated them & turned them against their own people. I agree with Coen Gous that they should all be prosecuted for high treason – that will assist Ramaphosa in uniting the ANC as they will all be in the same jail!

  • Sub contract a respected foreign government agency to carry out investigatory and prosecutorial services. There is no way we have the infrastructure, personnel and integrity to do this. If our own compromised structures try and prosecute these hoodlums we will all have shuffled off before anything comes of it.

  • Sometime early last year DM published a lengthy article on the shady role of the China South Rail Corporation Ltd (CSR) – if I remember correctly. I am amazed that the activities of this Chinese SOE are not being more highlighted!!
    In my understanding, the Government of the People’s Republic of China was here actively involved and responsile for defrauding the people of South Africa – by facilitating the payment of bribes to Gupta-associates in Dubai!
    A scandal of really international proportions!

  • I don’t want to see Molefe et al crying in public. I want to see them hanging. By the neck. Until they are dead.
    In my view, these worms committed nothing less than high treason and should all be punished accordingly. Their despicable actions make a compelling case for bringing back the death penalty.

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