The first report of the much-awaited South African Commission of Inquiry into State Capture has confirmed the influence that former president Jacob Zuma had in supporting the now-defunct newspaper The New Age (TNA) which was started by the Gupta brothers who fled the country after looting billions from state enterprises.
TNA was started by the three Gupta brothers, Ajay, Atul and Rajesh, originally from Uttar Pradesh's Saharanpur, who are now believed to be in self-exile in Dubai as South African authorities seek their extradition to face criminal charges.
The report, which was made public on Tuesday evening after President Cyril Ramaphosa received it from Commission chairperson, Acting Chief Justice Raymond Zondo, also said that Guptas wielded great influence over Zuma as they set about looting billions from state enterprises before fleeing the country. The evidence before the Commission paints a picture of a calculated strategy by the Guptas to appropriate public funds from state-owned enterprises.
It was key to their efforts to have facilitators within the State-Owned Enterprises (SOE's) and government departments, such as the Government Communication Information Services (GCIS), who would ensure that the entities committed millions of rands to the TNA despite there being no discernible value for the entities or government departments, the report said. The influence they exerted over former President Zuma was considerable. They managed to ensure that a well-performing and principled public servant was removed at lightning speed when he refused to accede to their demands to divert millions of rands of public money to enrich their media business, it said.
This was a reference to the resistance that the Guptas met when they tried to coerce GCIS head Themba Maseko to divert the entire 600-million-rand budget to TNA. Maseko was summarily dismissed at the instruction of Zuma. Former President Zuma replaced Mr Maseko with a facilitator, in the form of Mr Mzwanele Manyi. During Mr Manyi's term as Director-General of GCIS, millions of rands were spent on TNA in circumstances where there was no credible readership information nor certified circulation figures for the newspaper.
It is inconceivable that this would have been allowed to occur if Mr Maseko had remained at the helm of GCIS, the report said. The Commission also found that senior officials, including some board members, at SOE's were complicit in irregular transfers of huge amounts to TNA through contracts that were adjusted to misrepresent the value of the contracts to watchdog bodies like Parliament and the Public Protector, through recasting the agreements as something different to what they really were.
The contracts concluded by the SOEs were often patently irregular and wasteful by definition because their value simply could not be established. The TNA investigation shows that state capture thrived at our country's SOEs despite the fact that the necessary laws to prevent it were in place. The Public Finance Management Act (PFMA) clearly and definitively made every one of the TNA contracts unlawful.
State capture thrived because the people given power and authority in the SOEs simply flouted its terms. One way to prevent this in the future is to ensure that those who ignored their legal obligations are held to account for their conduct, the Commission said. It is recommended that the law enforcement agencies should investigate a possible crime of corruption against Mr Tony Gupta on the basis of Mr (Vuyisile) Kona's evidence that he offered him initially 100,000 rand (USD 6,233) and later 500,000 rand (USD 31,178) in their meeting at (the Gupta residential compound in) Saxonwold (in Johannesburg) on or about 29 October 2012, the report stated.
Kona had testified that after he had refused to accept these bribes from Gupta, he was fired as Acting Chair of the state-owned South African Airways Board. The Commission also recommended that the roles of Brian Molefe, former board chair of national rail transport provider Transnet and Collin Matjila, former Board chairperson of national electricity supplier Eskom in the misrepresentation of contracts with TNA be investigated by the National Prosecuting Authority with a view to charges of fraud and/or contravention of the PFMA.
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