Conclusions
What
emerges from the previous two parts of this series is a clear picture of a Business
Empire that is primarily built on the foundations of Gupta Money and political
influence brought about by Jacob Zuma’s Presidency. The collective Zuptas
currently have direct ties to two Government Ministers and Departments (the
Department of Mineral Resources and the Department of Cooperative Governance
and Traditional Affairs) and no less than three State-Owned Enterprises (ESKOM,
Transnet, Denel). There is therefore no reason for us not to believe that the Guptas
do indeed have the power to influence Ministerial appointments, the awarding of
tenders and indeed broader economic policy, but in a strange way we should be
thankful that this situation was exposed when it was, because it could have
been far, far worse.
The fact of
the matter is that the current situation is not nearly as bad as it could have
been had some of the Guptas’ more daring machinations paid the dividends they
were hoping for. One easily imagines that we would not nearly have seen the
level of fallout we did had Mcebisi Jonas but accepted the Guptas offer of the
Finance Ministery and been appointed instead of David van Rooyen. If that had
happened, then there is no telling what the results may have looked like.
At this
point in the series, I had hoped that I would be able to quote Porky Pig
(“That’s all folks”), but if writing this series has taught me anything, it
would be that a lot of the evidence do point in a certain direction, but also
raise even more questions, so I am left with no alternative but to quote the
(not so) good people over at Verimark “but wait, there’s more.” Just about the
only thing that is certain at this point in time is that we’ve not seen the
back of this by a dam site.
More questions
Please
note, those of you who have managed to get this far into the series, that I am
not about to make any statements or allegations, but I am going to ask some
questions. When we go about connecting seemingly random dots, the do not always
form a clear picture, but sometimes they do and this is more an exercise in my
own paranoia surrounding Jacob Zuma and our Government than anything else.
1.
Is that it? Is that all the Zupta Empire can conjure?
The answer
to that question is sadly no, because biggest and most troublesome question
that started to pop up in my mind as a went through process of compiling this is
how it was even possible for all of this to escape the attentions of other “independent”
organs of State. What is beyond any shadow of a doubt is that there are large
amounts of money involved in all these transactions, so one would expect the
South African Revenue Service to pay extremely close attention to all of it,
but be severely disappointed, because everyone has seemed to miss the boat. Or
have they?
Enter into
the fray, if you will, Tom Moyane and the SARS “Rogue Intelligence Unit.”
The first “SARS
Wars” started brewing on 28 May 2014 when an alleged SSA double agent named
Belinda Walter (at the time working for British American Tobacco’s competitor
Carnilinx as an attorney) wrote to SARS regarding her relationship with then
Group Executive Johann van Loggerenberg. In June of that year, acting
Commissionar Ivan Pillay appointed the Kanyane Panel to look into the
allegations, which the panel subsequently found (on 12 August 2014) had no
credible basis unless corroborated by other information at a later stage and
could therefore not be used as basis for a formal investigation. Despite these
findings, Pillay nevertheless appointed the Shikhakhane Panel to conduct
further investigations into any misconduct or impropriety relating to van
Loggerenberg’s conduct in the matter of and allegations made by Belinda Walter.
At this point, there had been rumours of a “Rogue Unit” in the press, but there
was no evidence that such a unit actually existed, outside of allegations made
by a lover scorned.
That was
apparently that, until a major change happened at SARS.
The change
I refer to is Jacob Zuma’s appointment of Tom Moyane as the new Commissioner at
SARS in place of acting Commissioner Ivan Pillay on 24 September 2014. The
Shikhakhane Panel concluded its investigation and handed its report to Moyane
on 5 November 2016, but the powder keg took spark on 9 November 2014 when the
Sunday Times ran a piece on the “Rogue Unit” written on the back of leaked
memorandums and other internal SARS documents. It was only after this article
saw the light of day that Moyane met with the Shihakhane panel and expanded its
mandate to also investigate the claims into the rogue intelligence unit at
which time all the interviews with involved persons have been concluded and
they had no chance to deliver evidence on the “Rogue Unit.” The accuracy and
bias of the Shikhahane Report is therefore rather questionable, but it was nevertheless
published on Politicsweb on 28 April 2015, finding great impropriety by Johan
van Loggerenberg, but more importantly also finding that the “Rogue Unit” had been established unlawfully and “SARS should ensure that proper structures of co-operation
between SARS and Government agencies statutorily tasked with intelligence
gathering and crime investigation are established in order to assist SARS with
the capacity it may require. Alternatively, the Commissioner, through the
Minister of Finance may request Parliament to enact legislation giving SARS the
investigative capacity it requires.” [Par 190.4.3]
We know
that, to date, no request to grant investigation powers to SARS has been made
by the Minister of Finance and that all investigations must therefore be
conduction in cooperation with established bodies like the South African Police
Force (SAPS), Directorate for Priority Crimes (Hawks) and National Prosecuting
Authority (NPA) among others, which brings me to the big question; can we
establish a direct link between the appointment of Tom Moyane and the State
Capture perpetrated by the Guptas?
I think we
can.
Yes, you could
argue that Moyane was merely searching for the truth with regards to the
Shikhakhane panel, but when you consider the fact that Johann van Loggerenberg
(acting as Head of Special Investigations under the authority of the Deputy
Commissioner Ivan Pillay) was starting to generate a reputation for himself due
to his ability to bring wealthy individuals and politicians (like Julius
Malema, among others) to book, then it becomes quite apparent that certain
people at SARS could pose a direct threat to the operations and aspirations of
the Gupta Business Empire and its continued success might very well have
depended on getting rid of them.
Moyane
achieved just that when he suspended both Pillay and van Loggerenberg shortly
after the Sunday Times report on 9 November 2014. Van Loggerenberg ultimately
resigned on 4 February 2015 and was followed by Ivan Pillay on 7 May 2015. But
the SARS Wars also claimed many other members of the Revenue Service’s top
structures:
-
chief operating officer Barry Hore;
-
modernisation and strategy head Jérôme Frey;
-
the head of the case selection division under Hore, Jacques
Meyer;
-
anti-corruption and security head Clifford Collings;
-
Pillay’s special adviser Yolisa Pikie; and
-
spokespeople Adrian Lackay and Marika Muller
In one fell
swoop, Moyane not only opened up space for his own people in the top structures
of SARS via his “restructuring programme” and could presumably prevent any
investigations into the Zuma/Gupta family, but even if he fails to achieve that
goal, it actually matters very little because even if an investigation were to
be launched, it would now fall under the auspices of the infamous Security
Cluster of Ministers who all rallied to Jacob Zuma’s side during the entire
Nkandla debacle.
This line
of thinking is also supported by Floyd Shivambu’s allegation that the Guptas
moved as much as R2 billion to Dubai and yet did not pay the 10% levy on such
transfers as required by the South African Reserve Bank. One has to wonder how
such transfers just happened to escape the attentions of the South African Revenue
Service (as the Customs authority) and the answer can only be Tom Moyane or one
of his goons.
Given the
far reaching and possibly disastrous consequences of SARS under the control of
the Zuptas, I really do hope that the line drawn here is nothing but a crackpot
conspiracy theory, but given its importance it should be investigated by a
truly independent and preferably international body and we have to wonder, what
exactly is it that Paul o’Sullivan was about to reveal to the world?
2.
What’s eating KPMG?
It seems
very odd indeed that a company like KPMG could suddenly, after a fifteen year
relationship and being “privy” to everything, but especially the happenings
since 2014, suddenly be the first to decide to end their association with
Oakbay and the Zuptas.
At the time
there was simply no indication that the Zupta Empire was about to be collapse
or hauled before a court of law. So it does not make any sense for them to just
give up such a meal-ticket and don’t you go and believe, even for a split
second, the yarn about “association risk to the company’s public image and
reputation” either, because in the international context of KPMG, any damage
done to its reputation by (and financial repercussions of) this situation are
negligible at best. So what do the good people over at KPMG know that we mere
mortals do not?
Well,
there’s the matter of the “Second SARS Wars” for a start.
I will not
enter into too many of the specifics regarding the SARS Wars themselves, but it
should be kept in mind that the unlawful formation of the “Rogue Unit” goes all
the way back to when Pravin Gordhan was Commissioner of SARS and KPMG is
involved in all of it because another recommendation of the Shikhakhane report
was that SARS appoints an independent body to do a forensic investigation into
the activities of the “Rogue Unit” in order to determine whether criminal or
civil proceedings should be instituted against individuals involved. KPMG was
appointed to conduct the investigation in December 2014 and Moyane instructed
that Advocate Martin Bressey work with the firm and assist it in “capturing
oral evidence.” The report was “finalized” and handed to Moyane on 4 December
2015, but like the previous SARS Wars the report was marred by irregularities
and media leaks.
Press leaks
in September 2015 brought to light that KPMG
-
received letters from the legal counsel of SARS (August 2015) containing
findings which they felt should be included in the report. These
recommendations were not only included in the final report, but were included
verbatim;
-
never actually captured any oral evidence but conducted a documentary
review of documents, evidence and minutes of previous enquiries
-
released with the final report with a disclaimer stating that the report
could not be used to resolve disputes or disciplinary matters and could not be
released in part or as a whole to the press.
-
developed a conflict of interest in March 2015 when British American
Tobacco declared it as their preferred auditor, ending BAT’s seventeen year
relationship with PriceWaterhouseCoopers. Since BAT was part of the
investigation van Loggerenberg was conducting when Walter made the allegation
against him, it meant that KPMG would now be investigating the domestic
activities of one of the world’s largest multi-national companies while being
in their employ.
These four
facts could go to prove that KPMG did not fulfil the mandate for which it was
employed, was biased in favour of another client (BAT) and was pliable by
including the recommendations of outside parties in their final report.
Then the
unthinkable happened, KPMG (and SARS for that matter) got a very large spanner
thrown into the works; Pravin Gordhan was back as Minister of Finance just over
a week after the “final” report was submitted to Moyane. What’s more is that Jacob
Zuma, being the politically vengeful individual we know him to be, then went
and allegedly instructed Hawks boss Berning Ntelemenza to launch an
investigation into Gordhan’s involvement in the rogue unit on the back of the
Shikhakhane (and by extension the KPMG) report and he did so amid a growing
public spat between President and Minister over Tom Moyane.
The
report’s potential consequences for KPMG suddenly took on a completely
different dimension. In the event that Pravin Gordhan is found guilty of
unlawful conduct and removed from his portfolio, the report would literally go
from a containable domestic “nuisance” to an international sensation in a
matter of minutes. If such an event is to ever occur, then the disclaimer added
to the final KPMG report would be utterly meaningless in the eyes of the press
and it is only a matter of time before the world’s media makes this same
connection between the Zuptas, KPMG and SARS; in the eyes of the media court,
at least, KPMG would not only be complicit in facilitating the Zupta State
Capture, but it would have proven itself as biased, pliable, unprofessional and
not at all serious about the confidential nature of its business in an industry
where your reputation is literally worth its weight in Benjamins ($100 bills)
if not solid gold.
You might
remember that the fifth large multi-national accounting firm Arthur Andersen
had no choice but to surrender its auditing license even after having its
conviction of obstructing the ends of justice (as relates to their auditing of
Texas based energy giant Enron that went bust in 2001) vacated on appeal. The
damage done to its reputation was so severe that there was simply no use in
trying to practice anymore and this might be what KPMG tried to avoid when it
cut its ties to Oakbay on 4 April 2016.
3.
The Oakbay Share Price Paradox
Biznews.com
ran a piece that touched on the subject of the Oakbay share prices
by Martin Williams on 14 April 2016 and if things aren’t strange enough
already, Twilight Zone be damned, the Oakbay share prices are a mystery all its
own.
JSE listed
Oakbay Holdings is in as precarious a position as any corporate could ever find
itself. Not only does Oakbay presently find itself without an accredited
auditor (as is required for continued listing on the JSE) while there doesn’t
seem to be a bank in sight that would even touch it with a stick, but yet the
share price of Oakbay Holdings has been remarkably resilient in the wake of the
Jonas Revelations, shedding a mere 7.5% of its value since the statement issued
by Mcebisi Jonas on 16 March 2016 (R20.00) and 15 April (R18.50).
This is
really no secret, folks, because the fact of the matter is that the Guptas own
the majority of Oakbay Resources & Energy’s 800 000 000 shares.
Of these, some 639 995 900 million shares are owned by Oakbay investments,
while long-time associate companies Saranya and Action Investments own a
combined 112 940 453, which means that just over 47 000 Okbay
Resources and Energy shares are available on the market for outside investors.
The simple conclusion to be drawn is that the major shareholders are just not unloading
their shares onto the market, despite all the troubles currently facing Oakbay.
This does not explain, however, what happened on 10 February of 2016.
On that
particular day, the Oakbay share price shed roughly three quarters of is value
during midday trade, tumbling from R 30.48 to R 7.55 when a single trade
comprising of 1102 shares hit the market. An investigation by the JSE at the
time found that no impropriety or manipulation has taken place, but this all
seems too good to be true to occur on the back of such a small volume of shares
being traded and especially when the Oakbay share price has proven itself to be
largely immune to the political storms taking place around it.
What happened
on 10 February 2016?
4.
The Saudi job?
As I was
writing this, the fact that most of the back alley deals took part in Dubai
(United Arab Emirates) seemed purely incidental and that there was nothing
linking it to the domestic events, but that theory was blown completely out of
the water when News24 ran the story of Jacob Zuma opening a weapons factory in the United
Arab Emirates during a recent state visit.
Perhaps
this is the same visit during which he allegedly took R 6 billion of Gupta
money to Dubai and if that holds true, then it all ties in nicely with the
Guptas suddenly leaving South Africa on 7 April 2016, but that is not the
question I wish to ask here. The question I wish to ask if there is any
connection between the Zuptas and the joint venture between Rheinmetall Denel
Munitions and Saudi Military Industrial Corporation that resulted in the Al-Kharj military
industrial complex.
Al-Kharj
seems to follow the same pattern as the now ill-formed Denel Asia in that it is
illegal for such ventures to take place without authorisation from Treasury
(Minister of Finance) and the Minister of Public Enterprises. Regardless of
this, both these ventures effectively opened their doors in a very short space
of time between them and to the complete surprise of both Ministries involved. Moreover, the
Gupta Business Empire stood to make billions due to their involvement in VR
Laser Services, which was almost guaranteed to benefit from large contracts to
supply steel components to Al-Kharj and perhaps this would fully explain the
formation of Denel Asia in the first place.
It also
casts a different light on the R2 billion in “assets” that the Guptas have
already moved offshore; do they perhaps own a larger stake in the Al-Kharj
military industrial complex than we are aware of?
5.
Denel. It may not be a river in Egypt, but seems to be
one in the UAE
It also emerged
recently, via a City Press article,
that there is a stronger Zupta influence at Denel than we have previously
thought. The Chief Executive Officer of Denel, Riaz Saloojee was suddenly fired, presumably by
Minister of Public Enterprises Lynne Brown, on 14 April 2016 after being on
suspension for eight months along with two of his top officials due to alleged
irregularities with the company’s profit statements. This is a most curious
development since the there was never any finding against Saloojee, the company
has never recorded an operating loss or received anything but a clean audit
under Saloojee’s stewardship and, what’s more, it was confirmed to the trade
unions representing Denel’s employees that his contract would be renewed for
another five year term when it ended in January 2016 before his suspension
around August last year.
So what’s
up with that?
I find it a
great coincidence that Saloojee’s suspension would come just prior to the happenings
around Denel Asia and the same City Press article alleges that Saloojee
resisted outside pressure to make “prescribed” appointments to Denel
subsidiaries and that that is the real reason behind his suspension and
ultimate axing from the parastatal. But this casts serious suspicions on Public
Enterprises Minister Lynne Brown.
Appointed
25 May 2016, Minister Brown’s appointment predates (just) the vast majority of
the Zupta’s more daring grabs of State businesses. Barely a month after her appointment,
Iqbal Sharma gives Transnet tenders to himself and three months later, Brown
appoints Mark Pamensky to the ESKOM board. On the other hand, the formation of
Denel Asia has not been approved by either the Treasury or Department of Public
Enterprises as is required by law, so perhaps Minister Brown’s only crime here is
that she’s been a little too submissive to her boss, Jacob Zuma.
Either way,
I still think that the Minister should come forward and explain herself.
I simply do
not know whether any of the questions I posed here warrant further
investigation or if they even have the most remote element of truth to them,
but what we can be sure of is that making sure of everything is in our collective best interests.
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