Ajay Gupta would al­ways joke with vis­i­tors: ‘Hey, you want to be a min­is­ter? I can make you a min­is­ter.’

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where Wood’s com­pany Tril­lian (and its pre­vi­ous part­ner Reg­i­ments) did busi­ness worth R600 mil­lion in the past two years, AmaBhun­gane re­ported.

Mabaso is also an ad­viser to Zwane. The over­lap­ping per­son­al­i­ties and roles re­veal a web of con­nected in­ter­ests work­ing to­gether. “Things are go­ing to change around here,” says Van Rooyen in his first mes­sage to staff. “Trea­sury will be ac­ces­si­ble to ru­ral ar­eas.” The min­is­ter uses the phrase “ac­ces­si­ble” again later that day in his only state­ment as fi­nance min­is­ter. A Cabi­net min­is­ter is al­lowed two ad­vis­ers; in Van Rooyen’s case, Whit­ley and Bo­bat. Van Rooyen says of Mabaso, the third per­son who joined him on his first day at the Trea­sury: “[He] is go­ing to work here. He will have a desk.” Of­fi­cials say Trea­sury di­rec­tor-gen­eral Lungisa Fuzile fumed: “If I’m not pay­ing him, he can’t be here.” Mabaso would never again be seen at the Trea­sury.

That night, af­ter he has been ha­rangued for doc­u­ments all day, Fuzile emails a con­fi­den­tial brief­ing for Cabi­net on the econ­omy to Whit­ley, who promptly emails the state doc­u­ments to Bo­bat and then to Wood, with the words: “Gents, fi­nally.”

The Trea­sury has been cap­tured by pri­vate in­ter­ests.


At Luthuli House, the gov­ern­ing party’s head­quar­ters in Jo­han­nes­burg, the po­lit­i­cal chiefs are watch­ing the mar­kets in panic on De­cem­ber 10 and 11. The rand is in free fall and so are share prices. Broad­casts and so­cial me­dia are aflame with pub­lic out­rage. Phones are ring­ing off the hook.

Po­lit­i­cal and busi­ness pres­sure force ur­gent change. Co­op­er­a­tive Govern­ment Min­is­ter Pravin Gord­han agrees to re­turn as fi­nance min­is­ter. By Sun­day night, he and Van Rooyen change jobs. The cri­sis ends, but the bat­tle for the state is just start­ing.


“In his first term, Zuma was happy to have Cabi­net’s eco­nomic clus­ter do its own work, as long as he was in con­trol of se­cu­rity. But in his sec­ond term, he started


as­sert­ing him­self. This is be­cause the Gup­tas had re­alised that the Trea­sury, Eskom, Transnet and the Pas­sen­ger Rail Agency of SA were key to un­lock­ing great wealth,” says a pub­lic fi­nance of­fi­cial.

The Gupta fam­ily comes from Sa­ha­ran­pur in In­dia. They came to South Africa just over 20 years ago as mod­er­ately suc­cess­ful traders in com­puter parts. They im­me­di­ately set about cul­ti­vat­ing po­lit­i­cal in­flu­ence by hos­pi­tal­ity at their sprawl­ing Sax­on­wold man­sion.

And they en­sured their nat­u­ral­i­sa­tion as black South Africans to ben­e­fit from black eco­nomic em­pow­er­ment. They made friends with Zuma, who was still deputy pres­i­dent of the ANC, but out in the wilder­ness with­out a job af­ter be­ing fired by for­mer pres­i­dent Thabo Mbeki. By Zuma’s sec­ond term, their friend­ship had been ce­mented.

A for­mer govern­ment of­fi­cial who spent a lot of time in Sax­on­wold says the old­est Gupta son, Ajay Gupta, would al­ways joke with vis­i­tors: “Hey, you want to be a min­is­ter? I can make you a min­is­ter.”

The Gupta fam­ily, led by a ma­tri­arch, but man­aged by three sons – Ajay, Atul and Ra­jesh (Tony) – be­gan to build an em­pire that was govern­ment-fac­ing. This meant fo­cussing on state li­cences, ad­ver­tis­ing con­tracts and paras­tatal ten­ders to build their for­tune.

The Gupta net­works wanted in on min­ing, bank­ing and me­dia deals and the mas­sive in­fra­struc­ture spend­ing trip the young democ­racy was about to em­bark on.

Trains (Transnet, for ex­am­ple, is spend­ing R50 bil­lion on 600 new trains), planes, defence equip­ment and com­modi­ties are in the cross hairs of this net­work of cap­ture, which is cal­cu­lated to have cost South Africa bil­lions in lost tax rev­enues, pil­fered min­ing funds and ill-got­ten gains, in­clud­ing dodgy ad­ver­tis­ing deals and min­ing li­cences ex­tracted with the help of top politi­cians.

In Oc­to­ber, Gord­han asked the court for a declara­tory or­der con­firm­ing he could not in­ter­fere in the banks’ de­ci­sion to close the ac­counts of the Gupta fam­ily. At­tached to the doc­u­ments was an eight-page cer­tifi­cate by the Fi­nan­cial In­tel­li­gence Cen­tre de­tail­ing red-flagged trans­ac­tions to the value of R6.8 bil­lion.

The net­work around the Gupta fam­ily needed to neuter the Trea­sury, whose prae­to­rian guard of of­fi­cials re­peat­edly put up road­blocks to their am­bi­tions.

In a nu­clear sub­com­mit­tee meet­ing that Zuma chaired in the week of Nene’s ax­ing, he joked to a Trea­sury of­fi­cial who was leav­ing the meet­ing af­ter he had la­belled plans for eight nu­clear re­ac­tors as com­pletely un­af­ford­able to the fis­cus: “Your last min­is­ter [Gord­han, who was Nene’s pre­de­ces­sor] de­fied me in many ways.”

Of­fi­cials say this was a ref­er­ence to when Trea­sury in 2013 scup­pered PetroSA’s plans to buy En­gen from Petronas, the Malaysian com­pany that owned a con­trol­ling stake.

Five fi­nance of­fi­cials City Press spoke to de­tailed nu­mer­ous oc­ca­sions last year, prior to Nene’s ax­ing, when Zuma would rail against the Trea­sury. Of­fi­cials who re­fused to co-sign an early agree­ment with Rosatom, the Rus­sian nu­clear agency, got up the pres­i­den­tial nose well be­fore the ax­ing.

The Petronas re­minder also came as a warn­ing be­cause ear­lier in De­cem­ber, the Trea­sury had ques­tioned an ex­pen­sive air­craft-leas­ing agree­ment by SAA us­ing Quar­tile, an out­side com­pany, to raise cap­i­tal at a sig­nif­i­cant premium to mar­ket.

“The events of De­cem­ber were fo­cussed on SAA and nu­clear,” says a se­nior govern­ment leader. They were also about a big defence deal.

Salim Essa, a young Jo­han­nes­burg busi­ness­man re­garded by some as a fourth Gupta son, had gone from be­ing a suc­cess­ful Houghton busi­ness­man to a mul­ti­mil­lion­aire, some say bil­lion­aire, as he grew his own for­tunes in al­liance with the fam­ily in a se­ries of deals where a sweet­heart re­la­tion­ship with the state was es­sen­tial.

In De­cem­ber last year, Essa was champ­ing at the bit to take Denel off­shore through his com­pany VR Laser Asia, which he had en­gi­neered into a joint ven­ture with Denel to man­u­fac­ture equip­ment for the In­dian mar­ket.

Trea­sury re­fused to ap­prove the deal, al­though the arms com­pany’s board had al­ready done so af­ter fir­ing CEO Riaz Saloo­jee, who op­posed Essa’s plans.

In the end, though, most agree that Nene was nuked by nu­clear. A day be­fore Nene’s last Cabi­net meet­ing, Zuma was to chair a meet­ing of a high-level nu­clear Cabi­net sub­com­mit­tee he had taken charge of.

Be­fore the for­mal meet­ing, he met in cau­cus at the pres­i­den­tial guest­house with min­is­ters, in­clud­ing State Se­cu­rity Min­is­ter David Mahlobo, In­ter­na­tional Re­la­tions Min­is­ter Maite Nkoana-Masha­bane, Pub­lic En­ter­prises Min­is­ter Lynne Brown and En­ergy Min­is­ter Tina Joe­mat– Pet­ters­son.

Nene was ex­cluded from this meet­ing be­cause of Trea­sury’s con­sis­tent view: “The bot­tom line is that 9.6MW of nu­clear was un­af­ford­able”.

Af­ter the cau­cus, the for­mal nu­clear com­mit­tee meet­ing started, where the assem­bled min­is­ters pre­sented a cho­rus of lines about why nu­clear power was im­per­a­tive. “En­ergy is power. Na­tional se­cu­rity is en­ergy se­cu­rity. We want it.”

Nene at­tempts a ques­tion. He asks why the deal is be­ing priced at eight rands to the US dol­lar when the cur­rency is far weaker, which would cre­ate false cost as­sump­tions. Then he agrees that a re­quest for pro­pos­als for a nu­clear build part­ner would be an­nounced at the next day’s Cabi­net meet­ing. He is fired the next day.


In his first week, Gord­han ac­quaints him­self with the con­di­tion of the econ­omy and calms the ruf­fled nerves he finds at the Trea­sury.

He and his team see off the SAA-Quar­tile deal and be­gin to put pres­sure on the air­line to pro­vide its fi­nan­cials, which are months late.

They hold off on is­su­ing guar­an­tees that will keep the air­line air­borne. Then Gord­han drives down to Dur­ban on hol­i­day in De­cem­ber. His phone rings. It’s Zuma say­ing: “Why are you be­ing so hard on Dudu?”

This year, Gord­han faced three on­slaughts by the Hawks and the Na­tional Pros­e­cut­ing Au­thor­ity, which cul­mi­nated in fraud charges laid and dropped. This week ru­mours – which had gained cur­rency in Au­gust – again swirled about a po­ten­tial Cabi­net reshuf­fle. Haf­fa­jee is re­search­ing state cap­ture at the

Pub­lic Af­fairs Re­search In­sti­tute

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