Graft probe makes damning findings against top officials

A JUDICIAL commission, which has spent almost four years probing graft in South Africa, concluded that the state had been “captured” during former President Jacob Zuma’s tenure and made damning findings against the ruling party and top officials.

The panel, headed by Acting Chief Justice Raymond Zondo, submitted the first of a threepart report to President Cyril Ramaphosa on Tuesday, with the others to be handed over by the end of next month.

Hundreds of witnesses testified how government coffers were systemically looted over the course of Zuma’s almost-nine-year rule.

“This commission has concluded that state capture has been established,” Justice Zondo said in the report. He found that the state procurement processes were abused, pliable officials were appointed to oversee the improper allocation of government contracts and the ruling ANC benefited from the proceeds of corruption.

The probe also determined that governance collapsed at state entities, while many private companies initiated or participated in corrupt arrangements, and there was an absence of any internal safeguards to prevent them from doing so. Zuma’s name was repeatedly mentioned in the report, although no direct recommendations were made that he be investigated further or prosecuted. He has repeatedly denied wrongdoing.

“It is a report of more than 800 pages. It has got Zuma from beginning to end, so you would understand that we need some time to study it before commenting,” said Mzwanele Manyi, a spokesperson for the Jacob Zuma Foundation.

On January 4, the ANC said it welcomed the report’s release and that it was committed to tackling all forms of corruption.

The initial 874-page document, published on the Presidency’s website, covers the panel’s investigations into allegations of wrongdoing at state-owned airline SAA and its affiliates, the South African Revenue Service (Sars) and The New Age, a newspaper owned by the Gupta family, who were close associates of Zuma’s and were in business with one of his sons.

Some of its other key findings: SAA: The panel called for law-enforcement agencies to consider prosecuting several of the carrier’s former board members, including close Zuma ally Dudu Myeni, its former chairperson; Phumeza Nhantsi, an ex-chief financial officer; and Yakhe Kwinana, a former director. All three denied wrongdoing when they testified before

Justice Zondo. Myeni didn’t answer calls to her cellphone. Contact details for the other two officials weren’t immediately available.

Investigations into the airline and its technical services unit showed “that fraud and corruption took hold in these entities”, Justice Zondo said.

The panel heard evidence of how a competent board was forced to resign during Zuma’s tenure, paving the way for the appointment of an incompetent one that led the national carrier to financial and operational ruin. Two finance ministers explained to the commission that Myeni was retained as chairperson because of Zuma’s personal preferences, which was “the antithesis of accountability”, Justice Zondo said.

SAA spent months in business rescue, a form of bankruptcy protection, and the government is in the process of selling a majority stake in the airline to private investors.

South African Revenue Service: Evidence related to the tax agency demonstrated how the private sector colluded with the executive, including Zuma, to capture what was a highly regarded institution and render it ineffective, Justice Zondo said. He found that Sars was systemically and deliberately weakened through restructuring, strategic appointments, dismissals of key staff and a pervasive culture of fear and bullying.

Evidence was presented that Zuma undertook to name Tom Moyane as the agency’s commissioner before his formal appointment. Bain & Co also met Zuma and Moyane before it was signed up as a consultant and it was clear it would be given a contract even before a tender process had begun, Justice Zondo said.

“The purpose of these early ‘appointments’ was to ensure that the necessary pre-planning could be done to redirect the resources of the organisation and assume control of the organisation,” the justice said.

Justice Zondo recommended that all Bain’s contracts with state departments and organs of state be re-examined for compliance with statutory and constitutional provisions. He also called on law enforcement agencies to investigate whether there were grounds for prosecutors to lay charges in connection with the award of the Bain contracts.

In their response to Bloomberg late last week, Bain & Co and the Nedbank Group denied willfully facilitating or being party to corruption.

Bain said Zondo’s report “mis-characterises” its role at the tax agency. The panel relied too heavily on testimony from one witness with no first-hand knowledge of its work and that two affidavits it submitted appear not to have been considered, it said.

Nedbank is currently conducting a comprehensive review of the panel’s findings and recommendations and has taken note of concerns related to transactions that it was party to, it said in an emailed statement.

“We remain of the view, as previously stated, that there has been no wrongdoing on the part of Nedbank in relation to these transactions,” it said. “Based on our initial review, no adverse findings have been made against Nedbank in terms of the first part of the report.”

Justice Zondo recommended that Moyane be charged with perjury for giving false evidence to Parliament, while legislation should be amended to allow for an open, transparent and competitive process for appointing the Sars commissioner. Moyane, who gave evidence before the commission under subpoena on May 26 last year has consistently denied wrongdoing. Moyane declined to comment on Wednesday.

The New Age:

State capture also took hold through the Gupta-owned TNA Media Ltd, which produced The New Age newspaper and held a series of breakfast briefings in partnership with the state broadcaster, securing lucrative sponsorship deals with government entities.

Justice Zondo concluded that Collin Matjila, a former acting chief executive officer at Eskom Holdings SOC was a “key facilitator” of deals signed by the state power utility and agreed to the largest contracts TNA had ever entered into, even though he wasn’t authorised to do so.

Justice Zondo said law enforcement should conduct further investigations to determine whether Matjila should be prosecuted for fraud. Matjila has denied wrongdoing. He did not respond to emails.

Justice Zondo also found that part of the government’s R600 million annual advertising budget was redirected to benefit TNA, resulting in “unjustified public spending” that took place from 2011 to 2017 through Eskom, SAA and logistics company Transnet SOC Ltd.

“Government departments and state-owned enterprises used scarce public resources to secure advertising in or sponsorships with TNA that defied logic and legal requirements,” Justice Zondo said.

“It shows the extent of the Guptas’ influence in the public sector as well as the Guptas’ strategy to replace officials not compliant with their scheme.”

The Guptas have also repeatedly denied wrongdoing. | Bloomberg. Additional reporting by Prinesha Naidoo