Call for probe into Gupta deal


DEPUTY Chief Jus­tice Raymond Zondo has asked his staff to probe a dodgy pre-1994 deal of 4 400 hectares on which the Gupta fam­ily es­tab­lished the Estina dairy farm.

Yesterday, the Zondo Com­mis­sion of In­quiry into State Cap­ture heard more ex­plo­sive ev­i­dence that the farm, known as Kry­naauwslust and valued at R30 mil­lion, was run by a trust es­tab­lished in 1993 by the Free State town coun­cil of Vrede, and that to this day no au­dited financial state­ments ex­ist.

Tekoet­sile Moremi, who held the po­si­tions of the chief financial of­fi­cer (CFO) and mu­nic­i­pal man­ager at the Phumelela lo­cal mu­nic­i­pal­ity, said that af­ter his ap­point­ment as CFO in 2011, he re­quested au­dited financial

state­ments for the farm from the trustees, but none were forth­com­ing.

Moremi, now chief di­rec­tor re­spon­si­ble for mu­nic­i­pal fi­nance man­age­ment in the Free State trea­sury, said when he ar­rived he found no records of any in­come from the farm.

The trustees had sold the cat­tle and dis­solved the trust af­ter Moremi asked for au­dited financial state­ments. There was also no deed of trustees.

Af­ter the auc­tion of live­stock and the farm’s as­sets, R8m was paid into the mu­nic­i­pal­ity’s bank ac­count.

“The mu­nic­i­pal­ity did not even know the num­ber of live­stock on the farm. We were just given the money as pro­ceeds of the auc­tion,” he said.

Jus­tice Zondo asked the com­mis­sion staff to take steps to see whether there was any cor­rup­tion in the deal.

The com­mis­sion heard that the Gup­tas wanted to use the land for what Jus­tice Zondo then de­scribed as “ba­si­cally for free for 99 years”.

Af­ter meet­ing Moremi and Phumelela mayor Tlokotsi Mo­taung at the time, Gupta as­so­ciate Ashok Narayan is said to have set strin­gent con­di­tions for the deal with the mu­nic­i­pal­ity.

The mu­nic­i­pal­ity, Narayan told Moremi via email dated July 2012, would re­ceive or­di­nary shares, not pref­er­ence shares. Pref­er­ence shares en­ti­tle hold­ers to a fixed div­i­dend, and their pay­ment takes pri­or­ity over or­di­nary share­hold­ers.

He said Phumelela’s 4% share­hold­ing would not be based on com­mer­cial value, but were in lieu of rentals and rates and taxes.

And, in­stead, Estina would lease the farm rent-free for 99 years, and the mu­nic­i­pal­ity would only re­ceive div­i­dends once the farm be­gan mak­ing a profit.

Moremi said that af­ter the deal be­tween the mu­nic­i­pal­ity, the Gup­tas and the In­dian dairy com­pany Paras col­lapsed the pro­vin­cial agri­cul­ture and ru­ral de­vel­op­ment depart­ment un­der then MEC Mosebenzi Zwane.

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