Gord­han de­tails at­tack on trea­sury

The min­is­ter’s af­fi­davit tells of bids to block a Bill that would en­able scru­tiny of dodgy money

Mail & Guardian - - News - Sa­belo Sk­iti

Pro­posed bank­ing leg­is­la­tion to al­low more scru­tiny of po­lit­i­cally ex­posed peo­ple, in­clud­ing se­nior gov­ern­ment of­fi­cials, is one of the rea­sons the trea­sury found it­self iso­lated and un­der at­tack, said for­mer fi­nance min­is­ter Pravin Gord­han.

In his af­fi­davit be­fore the Zondo com­mis­sion into state cap­ture, Gord­han de­tails how some of his own Cab­i­net col­leagues re­sisted — and even at­tacked — trea­sury for look­ing into dodgy deal­ings. He did not name the col­leagues.

They also put pres­sure on trea­sury to dump cru­cial amend­ments to the Fi­nan­cial In­tel­li­gence Cen­tre Act (Fica), which would give gov­ern­ment more power to scru­ti­nise the bank­ing af­fairs of in­di­vid­u­als con­sid­ered to be po­lit­i­cally ex­posed per­sons, in­clud­ing politi­cians and con­nected busi­ness peo­ple.

Other min­is­ters sought to wres­tle the Fi­nance In­tel­li­gence Cen­tre (FIC) from trea­sury, he said.

Af­ter re­sis­tance from then-pres­i­dent Ja­cob Zuma, which re­sulted in lit­i­ga­tion, the amend­ment Bill was passed into law in May by then fi­nance min­is­ter Malusi Gi­gaba.

Iron­i­cally, it was the scru­tiny of the move­ment of the con­tro­ver­sial Gupta fam­ily’s money un­der laws that al­ready ex­isted that led to the be­gin­ning of the fall of state cap­ture.

In De­cem­ber 2015 and early 2016 South Africa’s four main com­mer­cial banks — First Na­tional Bank, Absa, Ned­bank and Stan­dard Bank — in­formed the fam­ily they could no longer bear the risk of car­ry­ing their bank ac­counts, as well as those of their busi­nesses. This was a re­sult of un­ex­plained and fre­quent move­ments of large sums of money be­tween the com­pa­nies, as well as out­side of South Africa.

South Africa is sig­na­tory to the Fi­nan­cial Ac­tion Task Force, an in­ter­na­tional or­gan­i­sa­tion that sets stan­dards to com­bat il­licit flows of money.

But the pro­posed amend­ment to bank­ing leg­is­la­tion “saw a con­certed ef­fort by other mem­bers of the ex­ec­u­tive in the se­cu­rity clus­ter [min­istries of de­fence, po­lice, jus­tice and cor­rec­tional ser­vices, home af­fairs, state se­cu­rity and fi­nance] to un­der­mine trea­sury’s over­sight of the FIC. There ap­peared to be an ef­fort to move FIC, and pre­sum­ably ac­cess to its highly sen­si­tive per­sonal in­for­ma­tion, to the se­cu­rity clus­ter. This was con­cern­ing since the FIC plays such an im­por­tant role in the fis­cal and bank­ing reg­u­la­tory en­vi­ron­ment over­seen by na­tional trea­sury,” said Gord­han.

“For­mer pres­i­dent Zuma also de­layed sign­ing the amend­ments into law un­til lit­i­ga­tion was com­menced to force him to do so.”

At the time, the Gupta fam­ily, close friends of Zuma and his son’s busi­ness part­ners were ex­tremely crit­i­cal of the amend­ments and even lob­bied Zuma to refuse to sign it into law, he said.

Gord­han said the fam­ily also at­tacked trea­sury through an­a­lysts Mzwanele Manyi, Tshepo Kgadima and Danisa Baloyi on their news chan­nel, ANN7.

“At the par­lia­men­tary hear­ing held in Jan­uary 2017, these same crit­ics ob­jected to the Bill. My Cab­i­net col­leagues in the se­cu­rity clus­ter also met of­fi­cials from na­tional trea­sury to raise their ob­jec­tions to the amend­ments as well,” he said.

The amend­ments to Fica re­quired fi­nan­cial in­sti­tu­tions to know their cus­tomers bet­ter, to do proper due dili­gence, and con­sider ben­e­fi­cial own­er­ship of com­pa­nies and trusts.

Risky cus­tomers are re­quired to pro­vide in­for­ma­tion about the sources of their wealth. The Gup­tas’ con­cern was specif­i­cally about en­hanced scru­tiny of po­lit­i­cally ex­posed per­sons and prom­i­nent or in­flu­en­tial per­sons, groups that in­clude for­eign politi­cians and pub­lic of­fi­cials, as well as do­mes­tic politi­cians, se­nior gov­ern­ment of­fi­cials, and per­sons in com­pa­nies do­ing busi­ness with gov­ern­ment.

Gord­han is due to ap­pear next week be­fore the state cap­ture com­mis­sion chaired by judge Ray­mond Zondo.

In his af­fi­davit, which ap­pears to have been widely dis­trib­uted, Gord­han also de­tails nu­mer­ous in­ter­ac­tions with Zuma, dur­ing which Zuma seemed to ig­nore or dis­re­gard due process in ef­forts to push spe­cific ques­tion­able deals that would have ben­e­fit­ted him and his cronies.

His af­fi­davit also de­tails how trea­sury faced un­prece­dented at­tack, for prob­ing cor­rup­tion, from Denel board chair Daniel Mantsha and fel­low Cab­i­net min­is­ter (then of so­cial de­vel­op­ment) Batha­bile Dlamini.

Gord­han said that the Na­tional Pros­e­cut­ing Au­thor­ity and the Hawks, the po­lice’s elite crime fight­ing unit, were used to tar­get and in­tim­i­date him. This in­cluded for­mer Hawks Gen­eral Bern­ing Ntle­meza ask­ing him to an­swer 21 ques­tions re­lated to a crim­i­nal in­ves­ti­ga­tion just be­fore he was to de­liver his bud­get speech in 2016 when he was the min­is­ter of fi­nance.

Team­work: For­mer pres­i­dent Ja­cob Zuma and erst­while fi­nance min­is­ter Malusi Gi­gaba. Photo: Gallo Im­ages/The Times/Esa Alexan­der

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