South Africa's former president Jacob Zuma along with Indian-origin Gupta brothers, who had "considerable" influence over him, misappropriated huge amount of public money, including diverting millions of rands to enrich the now defunct The New Age newspaper, according to a probe report on corruption during Mr. Zuma's tenure from 2009 to 2018.
President Cyril Ramaphosa on Tuesday received the first of the three parts of the report of the South African Commission of Inquiry into State Capture from the chairperson of the Commission, Acting Chief Justice Raymond Zondo.
The report has been made public, however, the government said it will be able to comment on it only after studying all the three parts. The rest of the parts will be handed over to the president by February-end.
The first part deals with the Gupta family’s New Age newspaper, the destruction of South African Airways (SAA) by Mr. Zuma’s consigliere Dudu Myeni, the capture of the South African Revenue Service (SARS) and the corruption of the state procurement system through the tender system.
The New Age (TNA) newspaper was started by the three Gupta brothers — Ajay, Atul and Rajesh (Tony) — who migrated to South Africa from Uttar Pradesh's Saharanpur town and are now believed to be in self-exile in Dubai as authorities seek their extradition to face graft charges.
The report said the Guptas wielded great influence over Mr. 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 said.
It was key to their efforts to have facilitators within the state-owned enterprises (SOEs) and government departments, such as 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 (Gupta brothers) 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 added.
This was a reference to the resistance that the Guptas met when they tried to coerce GCIS head Themba Maseko to divert 600-million rand to TNA. Mr. Maseko was later dismissed allegedly at the instruction of Zuma.
Underlining that Mr. Zuma replaced Mr. Maseko with a facilitator, in the form of Mzwanele Manyi, the report said during Mr. Manyi’s term as GCIS Director-General, "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,” it said.
The Commission also found that senior officials, including some board members at SOEs, were complicit in irregular transfers of huge amount of money to TNA through contracts that were adjusted to misrepresent the value of the deals to watchdogs 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 report said.
The TNA investigation shows that state capture thrived at SOEs, despite the fact that necessary laws to prevent it were in place. The Public Finance Management Act (PFMA) clearly and definitively made each of the TNA contracts unlawful, the Commission said.
“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," it said.
The Commission recommended that the role of Brian Molefe — former chair of national rail transport provider Transnet and Collin Matjila and former 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.
The Commission also recommended that the law enforcement agencies should investigate a possible case of corruption against Tony Gupta on the basis of the testimony of former Acting Chair of the state-run South African Airways Board Vuyisile Kona.
Kona had told the Commission that Tony had offered him initially R100,000 and later R500,000 in October 2012. After he refused to accept the bribe, Mr. Kona was fired from his job.
