Headache for Cyril as close ally named in Zondo report
Minister’s explanation for Denel move ‘makes absolutely no sense’
President Cyril Ramaphosa’s office is keeping mum about what action he will take against one of his closest allies, communications minister Khumbudzo Ntshavheni, who has been implicated in the capture of Denel by the Gupta family.
In part 2 of his report, state capture commission of inquiry chair and acting chief justice Raymond Zondo recommends further investigation and the possible prosecution of Ntshavheni and the rest of the Denel board who were in charge in 2015 when the alleged capture of the state-owned arms manufacturer took place.
But Ramaphosa’s office said the president will not be making any “pronouncements” until the inquiry’s final report has been submitted to his office.
“The president has indicated that government will not make pronouncements on the findings nor recommendations of the commission’s report before having received all parts of the report and having considered the report in its entirety,” said Ramaphosa’s spokesperson, Tyrone Seale.
The naming of Ntshavheni in Zondo’s report places Ramaphosa in a tight spot in a year when he will be vying for a second term as ANC president.
He finds himself under the microscope on whether he will pull the trigger on his allies
— particularly if he acts against political foes who have been implicated and recommended for possible prosecution.
He is between a rock and a hard place: alienate political allies by acting against them, thereby pushing them to join forces with his opponents — or protect his friends and thereby embolden his opponents to cry political persecution.
Ntshavheni is very close to Ramaphosa. Last Sunday, her birthday, she posted photos on Facebook taken at what looked like a celebration attended by the president. Her caption read: “When the Boss and colleagues stay up to sing me a Happy Birthday song ...
Ntshavheni will likely not be the only headache for Ramaphosa, as more political associates may find themselves on the wrong side of Zondo’s recommendations. Zondo has yet to release the final segment of his report, which will contain matters pertaining to the likes of minister of mineral resources & energy Gwede Mantashe and deputy minister of intelligence Zizi Kodwa.
Mantashe was implicated in commission hearings over security upgrades to his houses in Gauteng and the Eastern Cape, paid for by controversial company Bosasa.
The former ANC secretary-general denied knowledge of Bosasa bankrolling the upgrades at his homes, but the sustainability of this defence will be addressed in Zondo’s final report.
Kodwa was implicated several times in the commission’s hearings for allegedly having accepted money from businesspeople during his time as ANC national spokesperson. He classified the monies as loan arrangements with his friends in the business community.
Zondo’s recommendation against Ntshavheni relates to Denel’s controversial suspension and sacking of three executives in 2015. Zondo found that the Denel board acted improperly by suspending CEO Riaz Saloojee, CFO Fikile Mhlontlo and company secretary Elizabeth Afrika without subjecting the trio to a disciplinary inquiry.
The executives ended up taking mutual settlement packages worth about R10m combined to walk away.
In his report, Zondo says Ntshavheni and her former Denel board colleagues failed to carry out their fiduciary duties, and law enforcement agencies must probe further and prosecute if possible. The board was led by former president Jacob Zuma’s ex-lawyer, Daniel Mantsha.
Saloojee and his colleagues had rejected advances from the Guptas in their bid to capture Denel.
Ntshavheni on Friday came out guns blazing, insisting that the commission had erred as the Denel decision against the three executives was above board.
She released the affidavit she had submitted to the commission in response to questions put to her.
In the affidavit, Ntshavheni argues that the executives were afforded ample opportunity to explain themselves.
“It is my recollection that the Risk and Audit Committee gave the two executives and the company secretary ample opportunity, including at its meeting of 23 September 2015, to clarify to the committee [and] by extension the board on reasons why the committee should not conclude that the relationship of trust had irretrievably broken, given the allegations against them in respect of their roles in LSSA acquisition by Denel at an amount of R855m,” she wrote.
As for why the executives were not subject to a disciplinary inquiry before being paid to leave, she said they had become a reputational liability to Denel as they had aligned themselves with the anti-Gupta tirade at the time, saying they were being hounded for opposing the well-connected family.
She said: “The Audit and Risk Committee and the board complained about delays in the disciplinary inquiry and the impact of the delays on the company financially and the negative publicity the company was drawing as wrong information was being fed to the media about the suspensions.
“Given that the matter was dragging long [and] the funders of the company and potential customers needed to engage with executives holding permanent positions, the overall interests of the company required that the matter be closed.”
However, Zondo was not convinced by her explanation.
“Her and Mr Mantsha’s explanation make absolutely no sense. Minister Ntshavheni, like Mr Mantsha, says that there was strong evidence that the three executives were guilty of serious acts of misconduct and this evidence was already there when the executives were suspended,” Zondo says in his report.
“If that was so, the question is: why was that evidence not placed before the three executives in a disciplinary inquiry within a month after they were suspended?”