Mineral resources & energy minister Gwede Mantashe was lashed by acting chief justice Raymond Zondo, who has found his testimony before the state capture commission implausible and “inconsistent with the facts”.
The finding related to the preference that Mantashe, then ANC secretary-general, had for Siyabonga Gama for the position of Transnet group CEO.
The report identified the rail and ports company as the “primary site of state capture” in financial terms based on a private investigator’s testimony, who said more than R41bn of contracts from the company were irregularly awarded to companies linked to the Guptas and their associate Salim Essa.
Zondo lashed Mantashe for holding “to the fiction” of the board’s preferences for Gama when in fact it had twice found him to be unsuitable. Zondo has recommended that Gama be investigated for criminal prosecution for his role.
The judge also made very negative findings against former public enterprises minister Lynne Brown in his second report, which was handed to the presidency on Tuesday.
He said she had aided the state capture project by the Guptas. He also recommended that her predecessor, Malusi Gigaba, be investigated for corruption in connection with alleged cash payments he received at the family’s Saxonwold compound.
The second part of the Zondo report dealt extensively with corruption and state capture at Transnet and arms manufacturer Denel. The first report focused mainly on national carrier SAA and the SA Revenue Service. But the story is the same one of brazen corruption and disregard for public resources in a decade in which the economy stagnated and the country’s unemployment and poverty rates increased.
The Guptas are business associates of former president Jacob Zuma and are alleged to have been the masterminds of state capture, which benefited them and members of his family, including his son Duduzane, who was a business partner of the Guptas.
Gigaba has emerged as one of the central players. He was appointed by Zuma to the department of public enterprises, before being later promoted to the department of finance in 2017 after the removal of Pravin Gordhan.
Zondo also said Brian Molefe, a former CEO of both Transnet and Eskom; Anoj Singh, who held roles of CFO in both companies; and Gama were all liable for criminal prosecution. They allegedly received cash payments during visits to Saxonwold between 2010 and 2018.
Zondo found that the Guptas’ machinations with regard to Transnet amounted to racketeering with multibillion-rand deals to replenish its locomotive stock tainted with corruption. “Evidence reveals extensive wrongdoing by some members of the board of directors and senior executives at Transnet during the relevant period,” the commission said in its report.
“The evidence shows that the contracts were procured in 2011-2014 by corrupt payments to the corrupt Gupta enterprise.”
The state capture report castigated numerous irregularities in the purchase of 1,064 locomotives for R54.5bn, where a consortium of consultants led by McKinsey was contracted and received irregular payments. Regiments Capital, linked to the Gupta family, came to be a part of the consortium without having tendered as part of it.
McKinsey and Regiments were awarded contracts valued at R2.2bn without tender.
Half of Regiments’ revenue was directed to a Gupta-owned company, Homix. McKinsey, one of the world’s biggest consultancy houses, agreed in May 2021 to pay back R870m in fees and interest earned on contracts at Transnet, earning praise from Zondo for its co-operation.
In 2018, it agreed to return about R900m in fees it got for work at Eskom, in a scandal that made it one of the most high-profile private sector faces of state capture.
The commission recommended that law enforcement agencies conduct investigations for possible prosecution where Essa and his various companies, including Regiments Asia, are concerned.
With regard to Denel, the report concluded that the creation of a company, Denel Asia, with VR Laser was conceived as a vehicle to capture the arms manufacturer, with the first step being the removal of the competent and honest board by Brown, who chose Daniel Mantsha as chair.
Zondo also said Brown had told a deliberate untruth to the commission about conversations she had with Essa.
The Gupta family, acting with Essa and Gigaba, were central to the capture of Denel, the commission found. The arms manufacturer is still reeling, as its available cash is insufficient to meet its operational needs, including paying salaries.
Zondo says the appointment of boards and CEOs of state-owned entities by politicians was a matter of serious concern as they “often failed to appoint the right kind of people” to the positions.
Read the report here:
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