Picture, if you will, public enterprises minister Pravin Gordhan as a Bond villain, stroking an obscenely large cat as he plots the privatisation of state-owned companies and plays puppet master to President Cyril Ramaphosa. Gone is the struggle stalwart and activist for freedom and democracy. Here, instead, is the poster child of white monopoly capital; the destroyer of African careers. He has billions in Canadian bank accounts, and a posh pad in the upmarket Pretoria suburb of Waterkloof.
Gordhan’s bloodline is limitless — he’s related to all Indians in SA, particularly those in the judiciary. He’s the handler of prosecutions boss Shamila Batohi, and the mastermind behind SA’s media. He once ran an evil rogue unit that spied on every politician from here to Cairo …
It’s so outlandish it’s farcical. And yet this narrative — a widespread disinformation campaign — is still being peddled. And it’s putting Ramaphosa in an awkward position.
Total onslaught
The EFF and the ANC’s "radical economic transformation" faction fired salvos against Gordhan after the departure of Jacob Zuma from the presidency in February 2018. But the battle has a longer history. Gordhan found himself at the heart of the battle against state capture back in 2015, when Zuma sought to install David Des van Rooyen, an alleged Gupta lackey, at the helm of the National Treasury.
The subsequent backlash — from the market and top ANC leaders alike — forced Zuma to return Gordhan to the post of finance minister. It was a position he’d occupied from 2009 to 2014, and one that would place him in the direct firing line of those bent on capturing the state.
The onslaught from Zuma and his allies within and outside the ANC was unrelenting, continuing even when Gordhan was removed from the finance ministry in 2017.
But he was drawn into sustained conflict with the faction later that year, when he played a pivotal role in campaigning for Ramaphosa to lead the ANC, and led the parliamentary charge against the capture of key state-owned entities (SOEs).
The most recent assault began in earnest when Gordhan took over the public enterprises portfolio, and subsequently gave evidence before the commission of inquiry into state capture towards the end of 2018.
It has since gained momentum: the EFF and its allies in the ANC are no longer alone — they have been joined by elements in business and labour, as well as disgruntled former executives ousted from SOEs due to allegations of corruption.
It’s a vortex of nefarious interests that has latched onto Gordhan for two main purposes: to halt the reform of SA’s SOEs; and, perhaps more ominously, to weaken and ultimately topple Ramaphosa.
"What is fascinating is that the South Africans I meet on the streets actually understand what’s going on," Gordhan tells the FM in an exclusive interview. "They understand that these are attacks, they understand that we are working in the interests of the country and for their children’s future.
"I went to drop off someone at the Gautrain — a young guy — [and] he says: ‘People like you inspire us.’ I ask what he does. He says he runs a small IT business, started it himself … see, that’s what you want. Not people who leech off the state illegitimately."
The big clean-up
At the heart of the onslaught is the department of public enterprises’ work on SOEs. These were at the heart of the state capture project which, Ramaphosa told an investment conference last year, cost the country between R500bn and R1-trillion.
SOEs were systematically repurposed to enable looting by networks of politically connected individuals, and aided by large multinational consultants, banks and audit firms, as the FM reported last week.
The first arrests at Eskom — linked to the construction of Kusile power station — took place late last year. And the FM understands many more are imminent.
SOEs are central to Ramaphosa’s clean-up. His first major act as president of the ANC in January 2018 was to appoint a new Eskom board. Since then Gordhan, as minister responsible for SOEs, has removed and replaced a number of allegedly compromised boards. Executives, in turn, have also been shifted out of their posts or forced to resign — from Transnet’s Siyabonga Gama, who was fired from the freight company, to Denel’s Zwelakhe Ntshepe, who quit after reports surfaced that the arms manufacturer had given the son of former North West premier Supra Mahumapelo a R1.1m bursary to become a pilot.
But the clean-up hasn’t been welcomed by all. At a media briefing on Sunday, EFF leader Julius Malema demanded that Ramaphosa remove Gordhan and "leave SOEs alone", as they belong to the people of SA.
"Gordhan must go before he runs down all the assets of the state and the people of SA. Most painfully, under his watch black executives in key state institutions are being vilified, projected as incompetent and corrupt then replaced with racial minorities, which is the greatest statement of no confidence in African leadership," he said.
At the time of going to press, Malema’s EFF was set on disrupting the state of the nation address on Thursday, should Ramaphosa fail to remove Gordhan from his post. The party also resolved, in a week-long "war council", to march to the Pretoria headquarters of the department of public enterprises to call on Gordhan to step down.
According to Wits political analyst professor Ivor Sarakinsky, it’s partly because of the reforms he’s already instituted that Gordhan has a target on his back.
For example, Sarakinsky say a key Treasury official, Solly Tshitangano, has been shifted to Eskom to oversee procurement, and is already "holding the line", disrupting established looting networks at the parastatal, with lucrative coal and diesel contracts being scrutinised.
"There are middlemen involved in these contracts who know their time is up. The key is to follow the money," says Sarakinsky.
Where does the EFF fit into this?
Sarakinsky believes there are "vested interests" working in the background, with the EFF, to scupper the reform programme. "Essentially, it comes down to financial transactions," he explains. "Basically there are those who are buying protection, and they could be using the EFF to do their bidding in this regard. The EFF are acting like ... the people offering shop owners protection."
Political analyst Ralph Mathekga says the "problem" with Gordhan, for the EFF at least, is that he is one of the "most knowledgeable people when it comes to understanding the pipeline of corruption. He knows where to look and that is the problem. Gordhan understands the architecture and the pipeline of corruption in this country."
Gordhan’s close relationship with Ramaphosa "makes the president much, much wiser", says Mathekga.
"My view is that if you put Gordhan in one room, you take the NPA … [and] you take a dedicated group of lawyers, you are going to get prosecutions. That is the problem people are worried about."
Mathekga also believes the EFF holds a historical grudge against Gordhan due to party leader Malema’s previous tax woes when Gordhan headed Treasury, as well as the On Point Engineering corruption matter in Limpopo — for which Malema was previously charged, and which has now been reopened.
A new plan for reform
The key to understanding the now urgent opposition to Gordhan, Ramaphosa and the work being done on SOEs, are the changes that have been made at a structural level at these organisations — including on the boards of these embattled organisations, as well as a proposed rationalisation of SOEs. This was fleshed out to some extent at both the recent ANC national executive committee (NEC) lekgotla and the subsequent cabinet lekgotla.
At the closing of the NEC lekgotla, Ramaphosa announced that ANC action on SOEs would be guided by its pre-1994 "Ready to Govern" document.
The "Zuma faction" of the ruling party has repeatedly sought to delegitimise attempts to fix SOEs, arguing that Ramaphosa and Gordhan are attempting to weaken them and sell them off. It’s an argument that Malema echoed at his media briefing on Sunday.
At the lekgotla, the party decided it must restructure SOEs, and that the decision on whether to increase or decrease state ownership must be informed by an "evidence-based" approach.
The party, commendably, agreed to embark on a process of "consolidation and rationalisation".
Ramaphosa is expected to announce details of the party’s SOE plan at his state of the nation address this week.
The FM has seen a government document containing proposals on "repurposing" SOEs as instruments of economic growth. According to this, much work has already been done to develop the policy framework that will govern SOEs.
The document outlines an action plan and proposals that detail the sectors in which the state should continue to hold ownership, those in which SOEs should be closed down, and the sectors in which the state should play a catalytic role to drive growth. It proposes, for example, the consolidation of the SA Post Office, and the creation of a new oil and gas company.
Though the plan is a return to basics for the party, it’s a radical shift in recent thinking about SOEs, and will, if implemented, transform the way they function and are managed by the shareholder.
It also means that, as the state overhauls these companies — first into "agencies" and then into government components — the corrupt networks that have been established at SOEs will be fundamentally disrupted.
Key elements of the plan include:
• The State Security Agency conducting security and integrity checks, and lifestyle audits on SOE personnel;
• Speeding up criminal action against former employees and service providers found guilty of malfeasance;
• Separating out the electricity transmission function, as has already been announced;
•Forming a new electricity generation SOE as announced at the Mining Indaba by energy minister Gwede Mantashe;
• Consolidating the Central Energy Fund group of companies, which includes PetroSA and the Strategic Fuel Fund;
• Restructuring the SABC by retaining public service broadcasting and exiting commercial broadcasting activities;
• Restructuring the SA Post Office;
• Corporatising various divisions of Denel to introduce strategic equity partnerships in various divisions;
• Consolidating Transnet Engineering and Prasa Technical;
• Introducing strategic equity partners for SAA, SA Express, Mango and SAA Technical (SAA Cargo should be retained within a consolidated SAA); and
• Consolidating the property portfolios of the various SOEs, including Prasa, Denel, Transnet and Eskom.
The decision on which proposals to adopt, and how to rationalise the SOE space, will now fall to the Presidential State-Owned Company Council, announced by Ramaphosa last year.
Phase 1 of what could be a five-year rollout involves, among other things, appointing the council and putting together a white paper that will outline the SOE restructuring and rationalisation process, as well as the enabling legislation.
Strengthening SOE accountability will require the introduction of an "overarching act" to govern SOEs, clarifying the roles and responsibilities of boards and executives, reforming procurement to reduce opportunities for corruption, and regularly reviewing and updating the guidelines for remuneration of boards and executives.
Gordhan says it is clear that SOEs are a critical part of the economy — and getting them to function optimally is key to getting the economy moving.
"Moving [SOEs] to a higher level of functionality, governance, financial and operational efficiency is critical for SA to work better — that we said repeatedly," he says.
"In the next period we have to remove SOEs from [being] a burden to the fiscus.
"We now have a governing party saying very clearly that we have to ensure that these [SOEs] become efficient, stable organisations."
The longer-term plan, he says, is that the department of public enterprises will cease to exist. This could take five years — or less, if the SOE council assumes increasing responsibility.
Predictable pushback
But such reforms are likely to come at a cost for Gordhan. Sources inside the government say he can expect the onslaught to continue for as long as he is in his current post, because resistance to Ramaphosa’s reform project is strong.
But while there may be sinister motives informing the push against Gordhan, independent political analyst Somadoda Fikeni believes some criticism of the minister — and the president — is valid, too.
Insiders in the ANC have complained that Gordhan is sometimes stubborn and appears indecisive, because he is always "thinking seven steps ahead" and this comes across as a weakness.
In particular, such criticism came in the wake of reports that Deputy President David Mabuza insinuated that Gordhan had lied to Ramaphosa about a freeze on load-shedding.
Ramaphosa announced in December that there would be no load-shedding until at least mid-January, only for blackouts to return to haunt South Africans a week earlier than planned. When asked by a journalist whether Ramaphosa had been misled by the board and the minister, Mabuza replied that he had.
Speaking to the FM, Mabuza’s spokesperson, Thamsanqa Ngwenya, says the reference was more to the board and management than the minister himself, as it was the board and management who dealt with operational matters.
But Mabuza’s comments sparked a chain reaction, with the EFF, the National Union of Metalworkers of SA, the "SA Energy Forum" (a lobby group of "diverse energy stakeholders") and others rounding on Gordhan and calling on him to resign.
At the same time Jabu Mabuza resigned as Eskom chair (though the FM understands he had wanted out shortly after former CEO Phakamani Hadebe resigned, but had been convinced to stay on).
Fikeni says the Mabuza-Gordhan situation placed Ramaphosa in an awkward position, as his inaction gave the impression he was not in charge. The president could have dealt with the matter differently, Fikeni says, by being vocal and decisive, while protecting his minister.
"Ramaphosa’s silence creates conspiracies," he says. "Often by the time Ramaphosa speaks, the damage is done."
Fikeni is also critical of Gordhan’s performance, saying he believes the pace of change and reform in SOEs has been too slow on his watch.
"It’s like his department keeps waiting for a crisis. The responses have been too slow. There is an energy lacking there. The minister seems jaded and tired. This does not seem like the same Pravin from the SA Revenue Service or finance [department]," he says.
There are ‘vested interests’ working in the background, with the EFF, to scupper the reform programme
— Ivor Sarakinsky
Gordhan, however, says it’s important to understand the damage done to SOEs to be able to fix them. "It is not something that is just broken in two pieces," he says. "If it is in 10 pieces, you won’t easily fix it."
He’s also pushing against a wave of resistance to getting SOEs back on track.
"First it’s the fightback externally, then resistance internally, then disruption, then people with vested interests who combine with all these forces. Then there are core elements like discipline, skill and experience levels, then other factors like the procurement factors — all these things need fixing.
"I think we have a good team. The objective of the government is not only to recover from capture, but to reposition this country so that future generations will benefit from it. At my age we work for future generations, not for [ourselves]. I don’t have to be in this job."
There’s also been criticism that Gordhan has interfered operationally in SOEs — a charge fuelled by the resignation of Eskom CEO Hadebe and SAA’s Vuyani Jarana last year.
This week, Ramaphosa and Gordhan drew similar criticism after they expressed their disagreement with the decision by SAA’s business rescue practitioners to cancel unprofitable routes. Again, it was seen as interference — an about-turn on Ramaphosa’s assurance after the NEC lekgotla that the state would steer clear of "operational matters" at SOEs.
Speaking on shareholder interference prior to the SAA incident, Gordhan tells the FM the government steps in only where there are "red flags".
"We draw a distinction between interference at a micro level and an intervention if there is a red flag. So if suddenly there is a huge crisis and it has an impact on the fiscus and an impact on the economy, then you intervene with the board and the management, and help them find solutions, which is what we try to do," he says.
Gathering allies
It has not all gone against Gordhan. When the latest broadside was launched against him, a group of ANC veterans and stalwarts, including Frank Chikane, Mavuso Msimang, Cheryl Carolus, Wally Serote and Sydney Mufamadi, came out publicly in his support.
In their statement, endorsed by the Ahmed Kathrada Foundation and organisations such as Business Leadership SA, the Legal Resources Centre and the Organisation Undoing Tax Abuse (Outa), they noted that Ramaphosa is the real target of the attacks, and that removing Gordhan would simply weaken the president.
Malema on Sunday lashed out at Ramaphosa for having achieved "nothing" during his first 18 months in office, and representing "white interests".
Gordhan says it is important to understand that SOEs are badly broken and that it will take time to do a proper repair job on them
— what it means:
"We are being controlled by whites here. Even the little political freedom we got in 1994, Cyril has handed back to the whites," he said. "Bidvest is doing everything, why? And you don’t call that corruption. If it was a black man doing what Bidvest is doing then that man would be declared corrupt. But because it is a white man, then there is no problem, it is allowed."
(Ramaphosa was nonexecutive chair of the Bidvest board from 2004 and resigned in 2013 after becoming ANC deputy president.)
Malema said "minorities are not held accountable", citing Jabu Mabuza’s resignation by way of example. "The country had agreed that it was Pravin and Mabuza that misled the country, and yet it is the black man who is gone and Pravin remains. Cyril has handed the country back to white people."
Removing Gordhan would weaken Ramaphosa, because if he gives in to those calling for the minister to be fired, it will become easier to force his hand on other matters.
As far as his detractors are concerned, Gordhan needs to go because, in his own right, he’s a "strong deterrent to corruption", Msimang tells the FM.
"But if the president relents and lets him go … it makes it so much easier to get to him. I don’t want to suggest Gordhan is the only person looking after the interests of the country or the president, but to take one strong person away and reinforce the forces that want to upset the system, [that] weakens the president."
If Ramaphosa can be weakened sufficiently in this way, says Msimang, his enemies could eventually remove him. But the president’s hand is strengthened, he says, because no case had been made for why Gordhan should be removed in the first place.
Mathekga, as a parting shot, says Ramaphosa has made Gordhan his "right-hand man" — but the problem is that he has "not done so properly".
"If I was the president I would have put together a national task team that is a little bit distant from government — which doesn’t really account to government, but to the president — and I would have put Gordhan there, because you want to quarantine him from the political tensions," he says.
"Now, the political tensions around him [Gordhan] have become so severe that his problems are becoming a contributor to a certain extent to policy gridlock."
With a politically charged year ahead — the ANC’s national general council, its mid-term policy review, is set for June — the battle over Gordhan is unlikely to abate. And so, as that event nears, one can only expect the Gordhan bogeyman myth to grow ever larger — and, perhaps, ever more ludicrous.
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