Two years into its investigation into how alleged state-capture corruption ravaged SA’s administration, parastatals and law enforcement bodies, the Zondo commission of inquiry has led evidence that may answer another crucial question: why was that wholesale destruction so easy to carry out?
If the evidence of three anonymous security officers is accepted, then former public enterprises minister Malusi Gigaba, Transnet/Eskom heads Brian Molefe and Anoj Singh, and Transnet bosses Siyabonga Gama and Garry Pita actively worked to promote the Guptas’ business interests for one simple reason: they were paid to do so.
The evidence of the three witnesses reveals, in often cringe-worthy detail, how men tasked with the operation of some of SA’s top state-owned entities allegedly resorted to hiding bundles of cash in backpacks and car boots, and tried to conceal it in safes and multiple bank accounts after meetings with the Guptas.
In Gigaba’s case, "Witness 3" suggested the three-time minister may have used Gupta cash to buy tailored suits. (Gigaba has issued a one-page statement in which he strongly denies "any suggestion or insinuation that there is anything unlawful that I did".)
None of the witnesses appears to have anything to gain by giving evidence, which is the first testimony to directly implicate Gupta associates in acts of corruption. Two witnesses claim they were threatened with death if they testified before deputy chief justice Raymond Zondo. All have been placed in protective custody.
One man testified that he had received an SMS that said he should stop giving evidence or "your family won’t find a piece of you".
The witnesses have also provided specific details about Gigaba, Pita, Molefe, Singh and Gama’s alleged engagements with the Guptas that could prove useful to investigators and prosecutors — particularly how Singh, Pita and Molefe may have concealed corrupt cash in bank accounts and safety deposit boxes on specific dates.
As a result of their actions ... Eskom suffered at least R3.8bn in losses which it is legally obliged and morally burdened to recover
— SIU and Eskom
The evidence has been especially embarrassing for Molefe, who has put on an emotional defence against claims that he was basically a Gupta stooge.
After then public protector Thuli Madonsela revealed that Molefe and Ajay Gupta called each other 58 times between August 2 2015 and March 22 2016 and his cellphone data showed he was present at or in the immediate vicinity of the Guptas’ Saxonwold compound on 14 occasions, Molefe famously hinted that he may have been visiting a shebeen in the area.
"My cellphone reflects that I was in Saxonwold 14 times, close to the herd of proverbial goats. My cellphone reflects I was in the area," Molefe said at a press conference in which he burst into tears. "There’s a shebeen there, two streets away from the Gupta [home]. I will not admit or deny that I’ve gone to the shebeen. But there is a shebeen there."
"Witness 1", a security officer at Transnet, has now torn into Molefe’s attempts to distance himself from the Gupta network. He recalled taking Molefe on 14 trips to meet the family at their residence, their business (Sahara Computers) or at hotels.
During the Saxonwold visits, the witness claimed, Molefe would sometimes carry a light brown backpack with him. On one occasion, the witness said he saw R200 notes in bundles in that bag. When he asked Molefe about the cash, the witness said he’d snapped back that the money was none of his business.
The witness also said he was asked by Molefe or Molefe’s personal assistant to deposit sums of money — between R5,000 and R20,000 — into various bank accounts between the 28th of the month and the 5th of the following month.
The evidence of witnesses 1, 2 and 3 came just days after the Special Investigating Unit (SIU) and Eskom launched legal action against the Gupta brothers and their multiple associates, Molefe, Singh and other Eskom executives, including Matshela Koko and Ben Ngubane, as well as former mineral resources minister Mosebenzi Zwane, for the recovery of R3.8bn they claim was "illegally diverted from Eskom" to help the Gupta network acquire the Optimum Coal Mine.
"These 12 defendants acted in a concerted effort whose objective was the corrupt, alternatively irregular, diversion of resources from Eskom," the SIU and Eskom said in a joint statement. "As a result of their actions in the acquisition of Optimum Coal Holdings during this period, Eskom suffered at least R3.8bn in losses which it is legally obliged and morally burdened to recover, together with the interest thereon."
The Guptas, through their attorney Rudi Krause, have described that summons as a "national embarrassment waiting to happen" and say the case is unlikely to ever see the inside of a courtroom.
"The allegations pleaded in this summons are legally incomprehensible and [the summons] is undoubtedly one of the worst-drafted legal documents I have ever seen," Krause told FM sister publication Business Day.
Neither Eskom nor the SIU has responded to Krause’s attack on their case, built, in part, on the evidence contained in the so-called Gupta leaks e-mails.
While the summons has yet to be tested in a court of law, it does provide a roadmap of how the SIU and Eskom believe Molefe, Singh and other Eskom and Transnet executives were key to the Guptas landing lucrative government contracts and benefits — at huge cost to taxpayers.
It also comes after the National Prosecuting Authority (NPA) successfully applied to freeze the assets of Gupta-linked Regiments Capital and its directors, in a case that also strongly implicates Molefe and Singh in multibillion-rand fraud committed while they were serving, respectively, as Transnet group CEO and CFO. That fraud allegedly led to the cost of Transnet’s purchase of 1,064 locomotives going from R38.6bn to R54.6bn.
Forensic evidence and analysis presented by the NPA suggests Molefe and Singh deliberately lied to Transnet’s bid adjudication committee about the reasons for the cost escalation, which they said in a memo was due to "foreign exchange, escalations and contingencies".
However, investigations would later reveal that the original R38.6bn included the items Singh and Molefe used to justify the increase.
"The version of the original business case submitted to the board, however, falsely claimed that such items were excluded," the NPA’s Hermione Cronje says in court papers.
Molefe and Singh were also pivotal in ensuring huge increases in the fees paid to Regiments Capital by Transnet, allegedly without any lawful and justifiable basis.
The NPA describes Regiments Capital as a "primary vehicle" used by the Guptas and their associates to extract money from the state.
Regiments paid 30% of the money it earned from Transnet for "advisory services" to key Gupta associate Salim Essa. This was apparently done on the basis that Essa had helped the company secure that initially minor, but later major, advisory role.
Regiments was central to justifying, on an allegedly fraudulent basis, the multibillion-rand jump in the cost of the 1,064 locomotives.
It’s apparent from the SIU and Eskom’s summons that the alleged looting of Transnet and Eskom is linked, with many of the same people and entities implicated in both.
The SIU and Eskom allege that the Gupta brothers "arranged that the Chinese locomotive manufacturers, China South Rail (CSR) and China North Rail (CNR) would pay Gupta entities kickbacks of 21% on the purchase price paid by Transnet in respect of locomotives procured from CSR or CNR".
CSR and CNR now form part of the same group, under the Chinese-registered holding company CRRC Corp.
As evidence of these alleged kickbacks, the SIU and Eskom have attached a schedule of payments of more than $145m made by CSR, CNR, CRRC and related companies to two Gupta entities, Tequesta Group and Regiments Asia.
Both companies are registered in Hong Kong, where their HSBC bank accounts were opened by Essa.
When SABC anchor Francis Herd asked Molefe why Transnet was doing business with CSR — which was then the subject of a public protector investigation — he lied on air and claimed to know nothing. Herd would later reveal that, after Madonsela’s office confirmed the probe, "I was accused of being a racist and of going on a ‘tirade’ based on my beliefs about Chinese goods".
The SIU and Eskom allege that Eskom and Transnet executives were key to the Guptas landing lucrative government contracts and benefits
— What it means:
That 2014 confrontation proved to be a mere blip on Molefe’s parastatal trajectory. The SIU and Eskom contend that Molefe and the Gupta network — having allegedly used Transnet’s locomotive purchase as a highly effective source of kickbacks and to generate unlawful and hugely inflated "consultancy fees" — had moved on to Eskom.
There, they say, Molefe, Singh, Koko, Ngubane, Mark Pamensky and others effectively forced mining company Glencore to sell the Optimum Coal Mine — which supplied Hendrina power station — to Gupta-owned Tegeta.
Again, the SIU and Eskom use the Gupta leaks — which Cronje says the NPA wants admitted into evidence for its mooted state-capture prosecutions — to reveal how the alleged R3.8bn looting of Eskom was carried out.
They argue that "all of the former executives and board members" whom they are suing "breached their fiduciary duty of care and good faith to Eskom and acted in a concerted state capture effort with the Gupta brothers, Mosebenzi Zwane and Salim Aziz Essa to illegally divert funds from Eskom".
If the testimony of the three security officials is to be believed, the alleged state-capture project was not driven by a grand political objective or desire for "radical economic transformation". It was motivated by something far more insidious, toxic and disappointingly banal: greed.
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