×

We've got news for you.

Register on SowetanLIVE at no cost to receive newsletters, read exclusive articles & more.
Register now

I don't do state capture‚ declares Gigaba

Finance Minister Malusi Gigaba has denied involvement in state capture.

He was reacting to allegations in a report on state capture by the Public Affairs Research Institute (Pari) that he appointed people with Gupta-Zuma-aligned interests to the boards of state owned enterprises while he was public enterprises minister.

The report is filled with inaccuracies and “continues the trend of defamation”‚ said Mayihlome Tshwete‚ Gigaba’s spokesperson.

On Thursday‚ Pari released a report‚ titled Betrayal of the Promise: How the Nation is Being Stolen‚ by several academics. The 72-page document details how the Gupta family‚ through various companies and friends‚ including President Jacob Zuma‚ gained beneficial access to profit from several multi-million contracts with state owned companies‚ whether directly through shell companies and legitimate businesses or indirectly as brokers or middle-men – and how their actions can be likened to a “silent coup”.

The team of academics from various institutions formed the State Capacity Research Project (SCRP)‚ leading a study on “the country’s emerging shadow state” and seeks to join the dots and paint the bigger picture of state capture.

“The SCRP is an interdisciplinary‚ inter-university research partnership that aims to contribute to the public debate about ‘state capture’ in South Africa. This issue has dominated public debate about the future of democratic governance in South Africa ever since then public protector Thuli Madonsela published her report entitled State of Capture in late 2016‚” the preface to the report reads.

The report contains a timeline of changes to the boards of state owned enterprises by Gigaba between 2010 and 2012‚ when he was public enterprises minister‚ and alleges these appointments were part of the systemic reconfiguring of these boards to align certain interests.

It began when he attempted to appoint trade and industry department official Iqbal Sharma as the chairperson of Transnet’s board‚ but failed. The appointment‚ the report says‚ was vetoed by Cabinet because apparently “he was too close to the Guptas”.

Sharma was later appointed as the chairperson of the Board Acquisitions and Disposals Committee at Transnet in what appears to be a circumvention of the veto.

It is now clear that Sharma was a close Gupta ally‚ the report said.

Brian Molefe was at this time already the chief executive of Transnet‚ appointed by Gigaba. This is the same Molefe who has controversially been reappointed chief executive of Eskom.

The Transnet disposals committee was to oversee “planned large-scale infrastructure spending” for all tenders above R2.5-billion.

 

Caption: The graphic show the appointments Malusi Gigaba made while he was public enterprises minister to the boards of state owned enterprises. Source: The Public Affairs Research Institute

The report states that state owned enterprises were targeted because of a loophole in the Public Finance Management Act — budgets or expenditure plans did not have to be tabled before Parliament‚ unlike those of government departments.

“Which means they cannot be scrutinised in the same way as departmental budgets and expenditures. The details of SOE [state owned enterprises] expenditure can‚ therefore‚ be hidden from public scrutiny‚” the report reads.

Eskom’s procurement spend between 2010 and 2011 accounted for 8.75% (R74-billion) of the government’s total spend‚ while Transnet accounted for 8.3% (R70-billion). These are by far the most lucrative parastatals and were targeted extensively.

Next up for milking were PetroSA and SAA at R12-billion and R14-billion‚ just over 1% each.

“These accusations have been regurgitated numerous times and each time with zero substance apart from speculative insinuations‚” Mayihlome Tshwete told TimesLive via text message on Friday.

“Minister [Gigaba] has repeatedly availed himself for questions and he has answered those questions. The media has not asked [for] any evidence of wrongdoing from those who make these accusations. The headline conveniently becomes the accusation and not the substance‚” he continued.

Tshwete said a DA MP “not long ago” mislead the National Assembly house by claiming Gigaba had signed a visa facilitation bid for the Guptas when he was not Home Affairs Minister and the company involved “had nothing to do with the Guptas”.

“After it was proven wrong none of you [the media] cared to follow up on the misinformation. Then it was claimed Minister Gigaba had signed the nuclear [deal] on his first day in office … again‚ none of you followed up about this blatant lie‚” Tshwete said.

“There have been other recorded and admitted-to inaccuracies. This claim also bares inaccuracies which continue the trend of defamation. We may seek to speak to the folks behind the report and then make a determination on a way forward‚” he concluded.

Would you like to comment on this article?
Register (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.