Busisiwe Mavuso | State capture: Join the dots, find the money

POSTED ON: June 3, 2022 IN by Admin
money money

By Busisiwe Mavuso
Tracking the money down is important but difficult.

I hope that life is becoming increasingly uncomfortable for some high-profile people following the recent arrests related to state capture.

Last week, three people were arrested for their role in enabling the Guptas to raid the rehabilitation trust funds from the Optimum and Koornfontein mines of R1.75bn. That followed five arrests related to Transnet’s infamous R50.6bn procurement of 1,064 locomotives.

Some of those arrested are serious players. Siyabonga Gama was CEO of Transnet during the state capture era and Ronica Ragavan was a senior executive at the two Gupta mines, while Joel Raphela was former deputy director-general in the Department of Mineral Resources. It is not only public sector players – their collaborators from the private sector are also being brought to justice, including Trillian’s Eric Wood, who has been identified by the media and at the Zondo commission as a key enabler of Transnet’s notorious purchase of 1,064 locomotives through which his company received a payment of R93m.

At long last, momentum is picking up in bringing justice to some of those implicated in stripping the state bare and we now eagerly await Eskom-related arrests. These recent arrests are a major step forward, not only for the National Prosecuting Authority but for the entire country in its quest to put state capture behind us.

But more needs to be done. We still await charges to be brought against any senior political figures implicated in the rot. Hopefully we’ll hear of more arrests once Judge Zondo files his final report on 15 June. It’s disturbing that some people implicated are still active government officials. How can we trust them?

We know from the Zondo Commission that state capture started with cadre deployment, then those cadres deployed in their senior roles at various SOEs caused these SOE’s to enter into procurement contracts under the guise of BEE that were designed to strip the state of its assets. What we need to know ,and let’s hope this is covered in the final Zondo report, is where did the money actually go? How were these illicit gains split among those involved? Surely those who benefited from the SOE procurement contracts must have had some pact to split their illegal gains with those who facilitated them by deploying the cadres who facilitated these in the first place.

Judge Zondo not only named those who should face charges but also recommended various measures for combating future corruption, the core of which is an anti-corruption unit that has the muscle to do its job. Prosecuting the villains and strengthening our systems are two of the three elements we need to finally put state capture behind us and ensure it never happens again. The final element is recovering what was stolen.

South Africa’s investigative journalists and forensic investigators have mapped out how the Guptas transferred money from one company to the next, from country to country, in relation to some of their illicit deals. Tracking the money down is important but difficult. We aren’t even sure just how much was stolen and don’t yet seem to know where it all ended up. Public Enterprises Minister Pravin Gordhan estimates it to be R49bn but says “some think it could be as much as R1tn”. This is a staggering difference in estimates. The Asset Forfeiture Unit has been hard at work seizing the proceeds of these crimes, but so far this is only the tip of the iceberg. Those who masterminded the stripping of the state are as sly as they are dishonest and will have hidden their money well , but we need to find it and how much ended up with the Guptas and how much they passed back to others who enabled them.

The international co-operation required to seize assets abroad and arrest and extradite the Guptas makes the processes move slowly. But our authorities need to keep pursuing both the money as well and the Guptas. We want them facing trial in SA along with their lackeys.

What we’ve heard little about so far is the kickback money. Again, this would be complex and hidden, such as promised payments at a date far into the future or monies paid into obscure trusts in tax havens. But there’s much already in the public domain. We’ve read of the boots full of “black plastic bags” with which numerous people left the Gupta’s Saxonwold residence as well as how relatives of the Gupta lieutenants were employed by Gupta companies.

Indeed, Jacob Zuma’s children were the first to benefit. Just a few months after he became president of the country, Duduzile Zuma, then 26, was appointed to the board of the Guptas’ Sahara Computers and was a board member with Rajesh Gupta in two other companies. Her brother Duduzane did even better, serving with the Guptas on at least 11 company boards. Any thoughts of linking that to his business acumen were dispelled by Duduzane himself, who said the Guptas went into business with him because “they thought I was a nice guy”. Today he is a very rich man.

In the meantime, BLSA is assessing the measures that Judge Zondo said enabled state capture. While cadre deployment was clearly the primary enabler of the looting and cannot be allowed to continue, there are numerous other factors that need to be addressed.

One relates to the Political Party Funding Act which was only signed into law in 2021. Judge Zondo says its absence during the state capture era contributed to the looting and welcomes its introduction, but sees it as only “a first and most likely ineffectual step in addressing this particular abuse”. He makes numerous recommendations to strengthen the legislation including that the Act be amended to criminalise donations as a reward for being granted a tender. Will we ever know if any of the proceeds of state capture ended up as political party and affiliate donations?

Cadre deployment, though, was the key. The judge clearly stated that this was the root mechanism for the Guptas to appoint their lieutenants in key positions in state-owned entities, with Zuma happily obeying and even stepping in when these moves were resisted. That is how the state was captured – first they captured Zuma himself, then they told him who to appoint to key positions, which reached its pinnacle in Zuma’s abortive appointment of the little-known David van Rooyen as the weekend finance minister in 2015.

In terms of building the type of society we want, one where the rule of law is paramount and the state’s systems and processes are strong enough to ensure that no one can ever again betray the country by handing control of most of it to outsiders, it’s imperative that we implement Judge Zondo’s recommendations, bring those responsible to justice and recover as much of the stolen money as possible from  all of those who benefited in the full chain of corruption.

*Mavuso is the CEO of BLSA. This article first appeared in Fin 24.

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