Varsity lecturer’s analysis of state capture is invalid
THIS is my response to the article (“Accomplices to financial murder”, The Star, April 12).
Recent events suggest that our democracy has been hijacked by greedy and corrupt fat cats, as Chris Hani warned.
The piece penned by Rhodes University lecturer Wesley Seale confirms that.
Some academics like Seale have deployed their skills as mercenaries in the service of ANC factions. Seale claims that billions of rand are moved illicitly out of the South African economy and that former finance minister Pravin Gordhan is to blame. He alleges that Gordhan has focused exclusively on the R7bn of alleged suspicious financial transactions by the Gupta family businesses.
Illicit financial flows include commercial activity, crime and corruption. The commercial component refers to tax evasion as well as base erosion and profit shifting (BEPS).
The recently leaked Panama papers, for instance, named Khulubuse Zuma among people who have secret offshore bank accounts. Seale cites three sources with amounts of annual illicit flows – R10.8 billion, R58.49bn and R147bn. He then favours R147bn, which he chooses arbitrarily.
According to Seale, Gordhan was complicit in facilitating these illicit flows. To substantiate this bizarre allegation, Seale relies on the completely unrelated claim that FIC director Murray Mitchell has not signed a performance agreement since 2002 and that Gordhan approved his bonus payout.
Seale’s attack on Gordhan is actually an attack on Parliament. Contrary to his allegation that Treasury and FIC have done “nothing” to stem the tide of illicit flows, Parliament has twice passed the Financial Intelligence Centre Amendment (FIC) Bill – aimed at aligning South Africa with international anti-money laundering standards.
Since June 2016 President Jacob Zuma has refused to sign the bill into law. It was the Gupta surrogates such as Mzwanele Manyi who were also opposed to its signing and even threatened to take the president to court. Other pieces of legislation and regulations are before Parliament, including Financial Sector Regulation and the Market Conduct Policy Framework.
Whereas Seale claims that the FIC is doing nothing, he quotes Mitchell’s report to Parliament that nine million suspicious transactions were reported to the institution in the last financial year. Instead of giving credit to FIC and National Treasury, Seale blames Mitchell and Gordhan without a single shred of evidence!
This may be true; but in this instance Seale uses it to project the Guptas as victims of a conspiracy without providing any evidence.
Those of us who work in Parliament know that over two decades we have built a worldclass financial sector regulation framework. Our efforts to tighten the system have been delayed by Zuma and the Gupta hired guns who have objected publicly to the bill. Luthando Nogcinisa