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Convention against Corruption: South Africa must turn the screws to get our money back

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Wayne Duvenage is a businessman and entrepreneur turned civil activist. Following former positions as CEO of AVIS and President of SA Vehicle Renting and Leasing Association, Duvenage has headed the Organisation Undoing Tax Abuse since its inception in 2012.

SA’s delegation to an anti-corruption convention in Abu Dhabi must apply pressure on the UAE authorities, as well as China and India, to return our stolen assets and extradite the known fraudsters to South Africa.

This week, the United Nations will be holding its Convention against Corruption (UNCAC) in Abu Dhabi, to which South Africa has sent +a strong delegation headed by Justice Minister Ronald Lamola, along with a team under advocates Shamila Batohi and Hermione Cronje from the National Prosecuting Authority and the Investigative Directorate. With a new SA government team in play, this is the best opportunity to call for corrective action related to corruption that has crossed international boundaries and seen the corrupt movement of substantial funds from South Africa to other parts of the world including China, India and the UAE.

The UNCAC conference, which runs from 16 to 21 December 2019, is the only legally binding universal anti-corruption instrument on the international stage. With its broad approach and significant mandatory characteristics, this conference is a unique tool for developing a comprehensive response to the global problem of corruption.

The vast majority of United Nations member states are parties to the Convention against Corruption, which was ratified by many countries (including South Africa) in 2004, and signed into force by 178 countries on 14 December 2005.

The convention covers five main areas:

  • Preventive measures;
  • Criminalisation and law enforcement;
  • International cooperation;
  • Asset recovery; and
  • Technical assistance and information exchange.

Aside from the many different forms of corruption which this convention spans, (such as bribery, trading in influence, abuse of functions, and various acts of corruption in the private sector), a highlight of the convention is the inclusion of a specific chapter on asset recovery, aimed at returning assets to their rightful owners, more specifically to the countries from which such assets had been illicitly taken. With the Guptas and Salim Essa in mind, this aspect is of keen interest to South Africa.

US sanctions against Gupta brothers and Essa

Earlier this year, the US Department of Treasury’s Office of Foreign Assets Control (OFAC) issued an Executive Order (EO 13,818) blacklisting the Gupta brothers and Salim Essa from doing business in the US and with US businesses, in particular for their involvement in grand corruption in South Africa.

Minister Lamola has noted the action taken by the US to ensure that the South African interests of justice against the Gupta family and their associates unfold without any hindrance. Aside from the direct impact on the financial and private interests of affected individuals, these sanctions will ensure that companies or individuals are prohibited from conducting any business in the US or with any US company worldwide.

Fortunately, South Africa and the US have a long history of cooperation on criminal justice, law enforcement and mutual legal assistance. Both countries are state parties to the United Nations Convention against Corruption and have a bilateral treaty. These international multilateral and bilateral frameworks allow law enforcement agencies of both countries to collaborate on matters of common interest, to ensure that perpetrators of corruption have nowhere to hide.

Against the backdrop of the US sanctions against the Guptas lies our desire to see this week’s delegation to Abu Dhabi apply pressure on the UAE authorities as well as China and India to return our stolen assets and extradite the known fraudsters back to South Africa, to face the rule of law.

China’s fraudulent trade with SA

From as early as 2012, Transnet’s management under Brian Molefe drastically inflated prices to direct the procurement of more than 800 locomotives from Chinese locomotive manufacturers China South Rail (CSR) and China North Rail (CNR). Riddled with corruption and kickbacks, SA taxpayers forked out almost R3-billion in kickbacks that were directed through these Chinese government-owned companies to Essa and the Gupta brothers, who are currently being safely accommodated by the United Arab Emirates. Together, they have several bank accounts at international banks including HSBC, Standard Chartered, NBAD (National Bank of Abu Dhabi) and Mashreq in the UAE. Ironically, this is the very same country hosting the UN Convention Against Corruption in 2019.

And yet, China – which has also adopted and signed the legally binding international anti-corruption multilateral treaty – allowed and enabled the corrupt middleman transactions that robbed South Africa, its biggest trading partner in Africa, of billions of rand.

The SA delegation to UNCAC will this week be expected to actively drive the issue of corruption that transpired in transactions between Transnet and the locomotive deals with China, during the State Capture years under Jacob Zuma’s rule. This same delegation is being encouraged by civil society group Outa and others to raise their voices against countries that allow corrupt businessmen like Essa and the Guptas to hide from extradition in countries that have adopted the UNCAC. The fact that these known fraudsters are allowed to conduct their business unhindered from within the borders of the UAE and use their local currencies is a slap in the face of the convenors of the UNCAC conference.

The evidence exposed by investigative journalists and other whistle-blower information from abroad has enabled Outa’s assessment of money flow transactions to display a strong correlation between the Transnet payments to the Chinese locomotive manufacturers and the kickbacks to Tequesta and Regiments Asia, which landed billions of rand in unwarranted funds in the hands of companies linked to Essa and Gupta. This is depicted in the graph:

About R2.6-billion was paid in kickbacks by the Chinese locomotive manufacturers to Gupta/Essa linked accounts. These findings and evidence were handed to the law enforcement agencies this year and Outa is satisfied that the newly established Investigative Directorate under Hermione Cronje will leave no stone unturned in its pursuit for justice.

Silence between SA and Chinese authorities

Of sincere concern to civil society and the South African public, is that two state-owned entities of two countries (South Africa and China) are able to engage in corrupt transactions, and more so when the governments of these two countries do not appear to be engaging at the highest level to investigate this serious matter.

Both South Africa and China are members of BRICS and have had ample time to discuss and raise these issues since they became public knowledge over recent years.

In essence, one government’s owned entity is stealing from the other government’s taxpayers, without any of the two even trying to address the issues at the highest level. The question we must ask is, what we can expect from trade with China in the future if this serious matter is allowed to go unresolved?

The South African public want decisive action and answers and the authorities have no excuse to look away. DM

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