Is the se­nior bu­reau­crat at pub­lic en­ter­prises a Gupta spy?

Sunday Times - - NEWS - KYLE COWAN, SIKONATHI MANTSHANTSHA and GENEVIEVE QUINTAL SABELO SKITI

THE im­por­tant play­ers in state cap­ture are not just po­lit­i­cal mas­ters and Duduzane Zuma — they might in­clude se­nior civil ser­vants, too.

Some­one with the e-mail ad­dress “Busi­ness Man” leaked cru­cial in­for­ma­tion to the Gupta fam­ily about deals with state-owned en­ter­prises. But who is he?

In De­cem­ber 2015, Mo­gokare Richard Seleke — a civil ser­vant of 20 years’ stand­ing — was ap­pointed di­rec­tor-gen­eral in the Depart­ment of Pub­lic En­ter­prises.

Six months be­fore that, Busi­ness Man had e-mailed Pres­i­dent Ja­cob Zuma’s son Duduzane.

The e-mail reads: “Evening sir please find at­tached my C.V and sup­port­ing doc­u­ments.”

The at­tached CV is Seleke’s. The e-mail ends with “Re­gards, Richard”. But Seleke de­nied yes­ter­day that he was Busi­ness Man.

“That is not my e-mail ad­dress. Lots of peo­ple have my CV and I can­not be held ac­count­able for things which I have no con­trol over,” Seleke said.

He chal­lenged the Sun­day Times to find fault with the way he was ap­pointed. “I was moved from the po­si­tion of DG at eco­nomic af­fairs to this one with­out a cent raise.”

Seleke was ap­pointed to head the Free State depart­ment of eco­nomic de­vel­op­ment, tourism and en­vi­ron­men­tal af­fairs in Oc­to­ber 2013, when Min­eral Re­sources Min­is­ter Mosebenzi Zwane — who has faced re­peated al­le­ga­tions over his deal­ings with the Gup­tas — was MEC. He was ap­pointed to the Transnet board in De­cem­ber 2014.

Other e-mails from Busi­ness Man to the Gup­tas in 2015 re­veal in­for­ma­tion on the con­tro­ver­sial Denel Asia merger. In one, Busi­ness Man ‘RE­GARDS, RICHARD’: Mo­gokare Richard Seleke says two Denel of­fi­cials sug­gested Dubai as a good lo­ca­tion for Denel Asia of­fices.

An­other e-mail for­wards a “con­fi­den­tial” let­ter from the Depart­ment of Pub­lic En­ter­prises’ act­ing deputy di­rec­tor-gen­eral of man­u­fac­tur­ing en­ter­prises, Vuyo Tlale, to Pub­lic En­ter­prises Min­is­ter Lynne Brown. It con­tains pre-no­ti­fi­ca­tion of the proposed for­ma­tion of Denel Asia.

An e-mail to Busi­ness Man in­cludes a me­moran­dum from Eskom’s lawyers about the util­ity’s rights re­lat­ing to Op­ti­mum Coal’s busi­ness-res­cue pro­ceed­ings.

This le­gal opin­ion is sent from mat­[email protected]­hoo.com just days af­ter it was sent to Eskom on Oc­to­ber 30 2015, with the note “Eskom le­gal coun­sel opin­ion sir”.

Three min­utes later, mat­shela2010 sends a let­ter from min­ing house Just Coal to Eskom’s pri­mary en­ergy divi­sion coal-sup­ply man­ager, Martin Makoni. Seven days later, both emails are for­warded to Ashu Chawla, CEO of Gupta-owned Sa­hara.

The Just Coal let­ter dis­putes Eskom’s uni­lat­eral and im­me­di­ate can­cel­la­tion of a sup­ply con­tract to three power sta­tions. “Your de­ci­sion as it stands will have a costly neg­a­tive fi­nan­cial im­pact on our busi­ness. We will con­tinue to pro­duce and make the con­trac­tual coal avail­able for de­liv­ery,” says Just Coal chair­man Joe Singh.

Mat­shela Koko was then the Eskom ex­ec­u­tive re­spon­si­ble for securing coal for power sta­tions, and the e-mails co­in­cided with Gupta ne­go­ti­a­tions to buy Op­ti­mum Coal from Glen­core, which sup­plied the Arnot power sta­tion.

A Gupta com­pany, Tegeta, was in the process of securing con­tracts to sup­ply the Matla and Hen­d­rina power sta­tions.

In fur­ther e-mail cor­re­spon­dence, Chawla con­firms Koko’s stay at the Oberoi ho­tel in Dubai in Jan­uary last year. He writes: “Sa­hara will pay the en­tire bill, please do not ask any credit card guar­an­tee from the guest at the time of check-in.”

Eskom de­clined to com­ment. “It is pre­ma­ture to re­spond in any spe­cific way to the is­sues raised as these fall within the purview of the State of Cap­ture re­port’s re­me­dial ac­tion,” said spokesman Khu­lani Qoma.

Koko ig­nored calls, e-mails and SMSes over three days as well as a mes­sage sent to his Twit­ter ac­count.

Yes­ter­day he replied: “I will not re­spond in any spe­cific way.”

In an in­ter­view at Eskom’s of­fices in Jan­uary, he de­nied il­le­gal deal­ings with the Gup­tas.

Colin Cruy­wa­gen, spokesper­son for Depart­ment of Pub­lic En­ter­prises Min­is­ter Lynne Brown, said the min­is­ter had re­peat­edly called for fur­ther in­ves­ti­ga­tion into al­le­ga­tions raised in the State of Cap­ture re­port to spare state-owned com­pa­nies fur­ther rep­u­ta­tional dam­age. A GUPTA as­so­ci­ate on the board of Transnet shared con­fi­den­tial board com­mit­tee doc­u­ments with the fam­ily be­fore a board meet­ing that es­ca­lated costs for a lo­co­mo­tives ten­der set to net them R5.3-bil­lion in fees.

Iqbal Sharma, for­mer busi­ness part­ner to Gupta as­so­ci­ate Salim Essa, sent the agenda of Transnet’s board ac­qui­si­tions and dis­pos­als com­mit­tee meet­ing a week be­fore the meet­ing to an e-mail ad­dress from where it was for­warded it to Tony Gupta.

The May 2014 meet­ing was key for the fam­ily: it took a res­o­lu­tion to rec­om­mend that Transnet’s board es­ca­late the costs of the 1 064 lo­co­mo­tives ten­der — from which Essa stood to make bil­lions in pro­fes­sional fees from bid­ders — from R39-bil­lion to R52-bil­lion.

Leaked doc­u­ments seen by the Sun­day Times in e-mails from the fam­ily’s busi­nesses and as­so­ciates show how Sharma, who was chair­man of the com­mit­tee at the time, sent the agenda to an un­known per­son us­ing the ad­dress [email protected] gmail.com, who then for­warded it to Gupta.

E-mails re­veal how Essa signed a “busi­ness-de­vel­op­ment ser­vices agree­ment” with one of the suc­cess­ful bid­ders, China South Rail, which meant his com­pany Te­questa stood to re­ceive R3.8-bil­lion in fees from the CSR’s R18.1-bil­lion por­tion of the con­tract. This was re­peated in two other con­tracts awarded to CSR by Transnet, where Te­questa would earn a fur­ther R1.5-bil­lion in fees.

This week Transnet did not re­spond to ques­tions around the deals, the leaked agenda and rea­sons for the es­ca­la­tion.

A for­mer Transnet board mem­ber said: “There were some R5-bil­lion in hedg­ing costs and some­thing else . . . I can­not re­mem­ber well.”

Transnet has emerged as a key in­sti­tu­tion from which the fam­ily and as­so­ciates, us­ing board and ex­ec­u­tive ap­point­ments, in­serted them­selves into nu­mer­ous ten­ders, and ex­tracted pro­fes­sional fees. It has also been ex­posed for mak­ing mil­lions in pay­ments to Gupta-linked com­pany Tril­lian for work al­legedly not done.

Sharma said the es­ca­la­tion was rec­om­mended by the ex­ec­u­tives deal­ing with the process and had been pre­sented by then chief fi­nan­cial of­fi­cer Anoj Singh — an­other Gup­talinked ex­ec­u­tive. “They could best an­swer the rea­son for in­crease as I do not have the sup­port doc­u­ments with me,” he said. “The rec­om­men­da­tion would have been to take it to the full board where all these mat­ters are ap­proved . . . Even as a chair of the [board com­mit­tee], I and other mem­bers had no di­rect sight of the pro­cure­ment process and eval­u­a­tion.”

De­clin­ing to com­ment on the for­warded mail, Sharma said: “A se­cure process for the high-value ten­der was cre­ated and fol­lowed. Eval­u­a­tors in­cluded the group chief ex­ec­u­tive of­fi­cer, CFO, the chief ex­ec­u­tive of Transnet Freight, the chief pro­cure­ment of­fi­cer and oth­ers.”

Re­ports from the mails thus far have lifted the veil on the Gup­tas’ wide net­work of in­flu­ence over the state, from the cab­i­net to paras­tatals.

Singh, now chief fi­nan­cial of­fi­cer at Eskom, was ex­posed for be­ing on four Gupta-spon­sored trips to Dubai dur­ing the pe­riod Transnet awarded a R1.8-bil­lion con­tract to Neo­tel. Gup­talinked com­pany Homix earned R36-mil­lion from this trans­ac­tion.

On Fri­day Singh re­ferred all ques­tions to Transnet, say­ing 2014 was too long ago for him to re­mem­ber de­tails.

The Gup­tas’ at­tor­ney, Gert van der Merwe, said he had ad­vised his clients not to re­spond to me­dia in­quiries un­til the au­then­tic­ity of the emails had been es­tab­lished. “I’m happy to sup­port a ju­di­cial in­quiry [into al­le­ga­tions of state cap­ture]. We will par­tic­i­pate and co-op­er­ate fully and that will give me the op­por­tu­nity to rely on au­then­tic doc­u­ments.”

I was moved to [the po­si­tion of pub­lic en­ter­prises DG] with­out a cent raise There were some R5-bil­lion in hedg­ing costs and some­thing else . . . I can’t re­mem­ber

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