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My hands are clean – Zwane

Publish date: 19 October 2017
Issue Number: 4330
Diary: Legalbrief Today
Category: State capture

Mineral Resources Minister Mosebenzi Zwane yesterday vehemently denied he at any stage benefited from his relationship with the Gupta family, or tried to further their business interests in his capacity as a public official, says a Fin24 report. Zwane was facing a grilling from MPs as part of a parliamentary inquiry into state capture. The Minister was asked to clarify a number of claims in the public domain, such as his involvement in the dairy farm project in Vrede in the Free State, his close connection to the Gupta family and President Jacob Zuma’s son Duduzane, whether he travelled and stayed in hotels at the expense of the Guptas or their business associates, his alleged role in securing the Guptas’ purchase of the Optimum colliery from Glencore, and his reported involvement in the landing of a Gupta-chartered aircraft at the Waterkloof airforce base in Pretoria. Zwane repeated earlier explanations that he travelled to Switzerland with the Gupta family to facilitate the buying of Optimum mine to save 3 000 jobs. According to him, the Gupta family’s business was the only company that showed interest in buying Optimum from Glencore. Asked about his alleged trips to Dubai and India, Zwane said he has been to Dubai ‘many times’. He told MPs if they want the reasons for his trips they can ‘interact with his court papers’, in which these are set out. Zwane asked MPs why they are so interested in ‘one particular family’ named Gupta. ‘I’m asking myself why is this portfolio committee just interested in my meetings with one family. The Mining Minister admitted to visiting Saxonwold, where the Guptas have their family residence. ‘I’d like to visit Stellenbosch to meet an honourable person there who can do a lot for SA,’ he said, a reference to Johann Rupert, chairperson of Richemont.

Full Fin24 report

Zwane told Parliament that beleaguered auditing firm KPMG did not raise any concerns about impropriety related to a dairy project in Vrede, which he initiated during his time as Free State MEC for Agriculture. A Business Day report notes that Zwane has been placed at the centre of the state capture, with among other things, the leaked Gupta e-mails hinting that Zwane’s relationship with the Gupta family predated his deployment to the national government and that it was the influence of the Guptas that paved the way for him to become Minister. It was also alleged that the Guptas bankrolled a trip to India for Zwane during his time as Free State MEC. Zwane faced tough questions on matters including his travels abroad, the business people he knew, the Vrede dairy farm and the circumstances under which his CV was sent to the Guptas before his appointment as Minister. He denied any knowledge of a web of transactions that channelled money into a wedding-planning firm for the Gupta family wedding in Sun City in 2013. ‘I would not know the web that has R118m and how it was channelled. I was not part of that web, to my knowledge. It is best to talk to the owners of such a web,’ he said.

Full City Press report

Former Eskom CEO Brian Dames says he was asked to meet the Guptas by the adviser to Malusi Gigaba, who was Public Enterprises Minister at the time, notes a BusinessLIVE report. ‘I was asked (for a meeting) by the Minister’s (Malusi Gigaba’s) adviser, Siyabonga Mahlangu,’ he said. ‘It was somewhere in Midrand,’ he noted, adding there was one other individual present, ‘I assume one of the Gupta brothers’. ‘After the meeting I was angry and I called Mahlangu and I said, ‘You won’t bring these people again’.’ Dames said that during the meeting, the Guptas requested coal contracts and wanted to discuss The New Age newspaper deal. ‘It was a strange discussion…. They said, ‘We have decided we can work with you’,’ said Dames. Dames’ career at Eskom spanned more than two decades in various positions. He was appointed CEO in 2010 and stepped down in 2014. Earlier he told the inquiry that when he was CEO the board frequently interfered in procurement processes. The board was led by Zola Tsotsi.

Full BusinessLIVE report

Dames said interference in Eskom has been noticeable since 2011. According to a Mail & Guardian report, Dames, who resigned from Eskom in March 2014 for personal reasons, said the Eskom inquiry was ‘too late’. State capture, he testified, began when Eskom executives were bypassed in the procurement process from around 2011. In that year, Tsotsi, a non-executive, acted with the power of an executive. The irregularity appeared when Tsotsi identified two Eskom people to work in his office – a change from normal procedure where the Eskom chair and CEO normally shared an assistant. Tsotsi would also arbitrarily cancel the procurement process for auditors, stalling the audit rotation for a few years while Dames was CEO. Dames did not investigate any of the irregularities by the time he left, saying that he did speak up about issues, but did not articulate his concerns correctly. He left before a new auditor was appointed. Dames suggested the parastatal remove its board entirely and appoint two or three people to govern. He insisted that he does not believe in restructuring but articulated the fact that Eskom needs good governance.

Full Mail & Guardian report

Outa’s head of energy Ted Blom, a former Eskom employee, testified that he personally brought corruption at the utility to President Jacob Zuma’s attention, says a Beeld report. He also referred to a meeting with a task team that was supposed to intervene, but said the members wanted to know how they, too, could get on the gravy train. ‘I was appalled and insulted by them,’ he said. Zuma was an ANC leader, but not yet President, when, according to Blom, former JSE chairperson Norman Lowenthal accompanied him to a meeting with Zuma to hand over a file with evidence. Blom suggested amnesty for Eskom employees who blow the whistle would help to uncover ‘thousands of corruption cases a year’. He testified that Eskom had written off some 400 000 tons of coal in 2007 because ‘it couldn’t be found’. ‘It was either due to corruption or bad management practices when they paid for deliveries that were not received,’ he said. Blom told the inquiry that Eskom was guilty of ‘deliberate financial manipulation’. He said they escalated their asset base to enable them to borrow more. ‘Now they cannot repay their loans,’ he is quoted as saying in a Fin24 report. He said there is a missing trillion rand that should be accounted for: this includes money that came in from excessive price increases, the conversion of a loan to equity and borrowing money. ‘What happened to the missing R1trn that went through Eskom’ he asked.

Full Fin24 report

Full Beeld report

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