Guptas ran a racketeering enterprise, says Zondo, while also finding that Malusi Gigaba’s testimony should not be believed

The heart of darkness traversed in the second part of the State Capture Commission of Inquiry’s report has seen Judge Raymond Zondo find that the Gupta network of corruption amounts to racketeering at Transnet. 

There is no charge of racketeering in South Africa’s arsenal of anti-corruption laws. However, organised crime legislation provides a finding of racketeering to be justified by the commission for certain offences.  

Secretary of the Zondo Commission Itumeleng Mosala presents Part 2 of the State Capture report to the Director-General in the Presidency, Phindile Baleni. (Photo: Elmond Jiyane / GCIS)

“The activities of the Gupta enterprise extended to various SOEs and… will be sufficient to sustain a racketeering conviction,” the report found. 

Zondo found that former Transnet CEO Brian Molefe, former CFO Anoj Singh, the Gupta lieutenant Salim Essa and the Trillian and Regiments boss Eric Wood should face multiple police investigations and possible corruption and racketeering charges in terms of the Prevention of Organised Crime Act. 

https://www.scribd.com/document/556243206/Part-2-Vol-1-Trasnet-Report-of-the-State-Capture-Commission-PART-II-Vol-I-010222

The report says former public enterprises minister Malusi Gigaba’s testimony should not be believed and Molefe’s denials are not credible. The Transnet stream of inquiry covered the period between 2009 and 2018. The report finds that the commission established capture at the transport utility, around the purchase of three sets of locomotives bought in packs of 95, 100 and 1,064. 

In addition, IT, financial advisory and advisory transaction contracts were also corrupt. The commission found billions of rands in kickbacks were paid from China South Rail (CSR), China North Rail and China Railway Group to Essa’s and Gupta-linked companies. Essa’s company Tequesta, for instance, was found to have received R2.8-billion, while the report found that Transnet’s expansion of its manganese ore line was tainted by corruption.  

Henk Bester of Hatch testified on how Essa had met him at Melrose Arch in Johannesburg and told him that Molefe would become Eskom boss, before Molefe moved to the electricity utility. He also gave insight into how corruption worked at Transnet. 

“The evidence about these incidents provides reasonable grounds to suspect corruption in that Mr Essa and Mr Singh attempted to make the award of the tender conditional on Hatch’s appointment of their preferred SDPs [supplier development partners],” the report found. 

The report lays bare how Molefe and Singh used their executive power to increase total cost estimates, confine contracts to their preferred bidders, increase the scope of dodgy contracts and override local content and BEE requirements. 

Molefe, the report said, should be investigated and possibly prosecuted in terms of the Public Finance Management Act for a R3-billion advance payment illegally made to CSR. 

The report found that R7.34-billion in kickbacks was paid to companies controlled by Essa and the Gupta enterprise. Essa, Singh and Molefe come up in the long list of recommendations the report made for investigation and prosecution. 

The report also found that Molefe, Singh, former Transnet CFO Garry Pita and former Transnet executive Thamsanqa Jiyane should be investigated for receiving gratifications (bribes).  

The report specifically finds that the police should investigate cash payments made to Molefe and Singh at the Three Rivers Lodge in Vereeniging in July 2014. In addition, the commission recommended that Singh face investigation and possible prosecution for having his Dubai holiday expenses paid by the Guptas. 

The report also recommended that the R17-million severance payment approved for former acting Transnet CEO Siyabonga Gama be reclaimed from the then Transnet board. It found that the Transnet negotiating team should face possible corruption charges in connection with the 1,064 locomotive deal for not acting in the transport company’s best interests.   

Denel

The Denel section of the report has found that the capture of the utility has been established and that the former minister of public enterprises Lynne Brown participated in it. It says that the arms manufacturer suffered enormous reputational damage and that a good growth trajectory was ended when CEO Riaz Saloojee was illegally suspended. Brown was found to have had a close relationship with Essa, with whom she spoke extensively and for long periods on the phone.

https://www.scribd.com/document/556246379/Part-2-vol-2-Denel-Report-of-the-State-Capture-Commission-PART-II-Vol-II-010222

The report found that Dan Mantsha, who was chair of the Denel board at its capture crash, should be investigated by the Legal Practice Council. Mantsha had regularly acted for former President Jacob Zuma. This part of the report recommended making it a criminal offence for any person vested with public power to abuse that power.

“Such potential violations might range from the case of a president of the republic who hands over a large part of the national wealth or access to that wealth to an unauthorised [person or body]” to lower-ranking board members and executives, the report recommended. DM