Tag Archives: Zuma

23 Apr

Zuma Legacy Leaves South African Anti-Graft Panel With Huge Task

A South African judicial commission faces a daunting task in investigating allegations that members of the Gupta family and their allies connived with former President Jacob Zuma and his son Duduzane to loot billions of rand from state coffers.

Its success or failure will go a long way in determining whether South Africa can put behind it years of mismanagement and plunder during Zuma’s scandal-ridden administration that undermined investor confidence and stymied economic growth.

Zuma agreed to the inquiry after losing control of the ruling party and a lawsuit challenging a directive from the nation’s former graft ombudsman that spelled out its powers and appointment procedures.

Deputy Chief Justice Raymond Zondo and his panel of six senior staff members must probe an array of deals between state entities and private businesses, some of them set up to obscure the intended beneficiaries.

It will require wading through hundreds of thousands of documents and interviewing scores of witnesses, many of who may be reluctant to give evidence because they risk implicating themselves. Several key players, including the three Gupta brothers and Duduzane Zuma, have fled the country.

While the panel was given six months to complete its investigation into what’s become known in South Africa as “state capture,” Zondo has said that’s woefully inadequate and he’s requested an extension to its mandate. He hasn’t said when public hearings will begin. The commission’s findings could be used as the basis for criminal prosecutions by law enforcement agencies, which are also conducting several concurrent probes.

These are among the key controversies the commission will have to focus on:

Peddling of cabinet posts

Former Deputy Finance Minister Mcebisi Jonas and Vytjie Mentor, the ex-chairwoman of parliament’s public enterprises portfolio committee, alleged that the Guptas offered them ministerial posts in exchange for business concessions. Jonas said he was also offered a 600-million-rand ($50 million) bribe.

To read the full article, click here.

16 Apr

KPMG South Africa Audits Own Staff After Breaking Public Trust

KPMG South Africa, which has faced scrutiny for its audit work on failed VBS Mutual Bank and companies linked to the politically connected Gupta family, said all staff face background checks every two years to try improve public trust in the firm.

“The vetting is to be done by an external, independent party,” Wiseman Nkuhlu, chairman of KPMG, told reporters in Johannesburg on Sunday. The firm will also extend a review of its past work to stretch back 18 months and set up a hotline for employees to raise concerns about the quality of KPMG’s work, he said.

Two of the auditor’s partners, Sipho Malaba and Dumi Tshuma, resigned this month after they were faced with disciplinary charges related to work done for VBS Mutual Bank, which collapsed in March after the lender was unable to repay some of its clients’ deposits.

The allegations against them included their failure to comply with the firm’s policies and procedures regarding the disclosure of relevant financial interests, KPMG South Africa said in an emailed statement on Saturday.

On the VBS work, “the disappointment and anger is palpable,” said Nhlamu Dlomu, chief executive officer of KPMG South Africa. If the two partners who quit need to be reported to the country’s authorities following the KPMG probe, the firm will take those steps, she said.

Last year, KPMG LLP’s South African unit appointed nine new executives in an attempt to restore trust in the auditing firm as clients distanced themselves over its involvement with the Gupta family.

The Guptas, who have fled South Africa, are accused of using their friendship with former President Jacob Zuma to win state contracts and influence government appointments. Zuma and the Guptas have denied any wrongdoing.

VBS, which isn’t listed, gained attention in 2016 when it gave Zuma a mortgage to settle a Constitutional Court order to repay taxpayers some of the money spent upgrading his private residence.

Source: https://www.bloomberg.com/news/articles/2018-04-15/kpmg-south-africa-putting-all-staff-through-background-checks 

19 Mar

Zuma’s Trial Carries Peril for South Africa’s Ruling Party

Former South African President Jacob Zuma’s prosecution for graft appears at first glance to be a victory for the anti-corruption campaign of the nation’s new leader, Cyril Ramaphosa. Yet it also carries risks for his ruling African National Congress.

Not only will a drawn-out trial be a constant reminder to voters that he was enmeshed in scandal for most of the nine years he led South Africa — it raises uncomfortable questions about why the ANC, parliament and prosecutors failed to take action against him before. The case also threatens to further divide the party.

A wily political fighter, Zuma, 75, may seek to use the case to energize his supporters as payback for the ANC’s decision to force him to resign as the nation’s president last month. And the trial will take place in his home area, KwaZulu-Natal, where the party has its biggest membership and remains badly split a year before general elections.

“He will try by all means to garner support as he goes to court,’’ said Ralph Mathekga, an independent political analyst based in Johannesburg. “Jacob Zuma is a very manipulative leader. It will be very difficult for Ramaphosa to justify the presence of the ANC members who will be supporting Jacob Zuma in court. The ANC could do without this.”

Zuma may also try to delay going to trial as long as possible. His legal team is considering a bid to seek a review of the National Director of Public Prosecutions’ decision to pursue the case, which was dropped nine years ago in what a court ruling described as an “irrational’’ decision.

“In the circumstances, the likely course of action would be to take the announcement of the NDPP on review,’’ his lawyer, Michael Hulley, said in a text message on Saturday. “The decision will, however, only be made after careful consideration and consultation with Mr. Zuma.’’

To read the full article, click here.

15 Mar

Zuma Exit Spurs Revival of South Africa’s Once-Cowed Parliament

Jacob Zuma’s exit as South Africa’s president has given a new lease of life to the nation’s previously submissive parliament.

While the African National Congress used its dominance of the legislature to shield Zuma and his appointees through repeated scandals, its lawmakers have found their voice since Cyril Ramaphosa replaced him as party leader in December and as president last month. Cabinet ministers and officials have been grilled over the misuse of state funds and for failing to do their jobs properly.

ANC lawmakers were reluctant to cross Zuma because he controlled the party’s leadership structures that determined whether they retained their jobs.

Zuma survived several opposition no-confidence votes, despite the nation’s top court ruling that he violated his oath of office for failing to repay taxpayer funds spent on his private home.

He was also implicated by the nation’s graft ombudsman in allowing his son’s business partners to loot state funds and influence cabinet appointments — a phenomenon known in South Africa as state capture.

Ramaphosa won control of the ANC on an anti-graft ticket after fending off a challenge from Nkosazana Dlamini-Zuma, Zuma’s ex-wife and preferred successor, and Zuma was forced to resign on Feb. 14.

Ramaphosa is adamant that he and his government must be held to account and state capture must be stamped out.

“This is the year in which we will turn the tide of corruption in our public institutions,” he said in his first state-of-the-nation address last month.

Over recent months, ANC lawmakers have worked alongside the opposition to convene probes into state capture and summoned cabinet ministers, Zuma’s son, Duduzane, and several of his close allies to appear before them.

They’ve also hauled officials from government departments, the state broadcaster and the national tax agency before them to explain a series of management failings.

Parliamentary sittings that previously degenerated into shouting matches and brawls between members of the radical Economic Freedom Fighters and the legislature’s security officers, who were instructed to evict them when they tried to prevent Zuma from speaking, are now relatively mundane affairs.

To read the full article, click here.

14 Mar

South African Graft Inquiry to Summon Zuma’s Son, Guptas

South African lawmakers said they will summon the Gupta family and the son of former President Jacob Zuma to appear before an inquiry that is investigating the mismanagement of public funds at state-owned enterprises.

The former chairwoman of South African Airways, Dudu Myeni, will also be subpoenaed after failing to heed two invitations to give testimony at the hearings in Cape Town, parliament said in an emailed statement on Tuesday.

The portfolio committee on public accounts is probing so-called state capture, or allegations that Zuma has allowed the Gupta family to secure state contracts and influence cabinet appointments. They all deny wrongdoing.

The “issuing of summons is the last resort that the committee had to undertake as invitations have been issued without any success,” parliament said in the statement. “It would be impossible to finish the work of the inquiry without the testimony of Ms. Myeni, including that of Mr. Zuma and the Gupta family.”

On Tuesday, Home Affairs Minister Malusi Gigaba, who was minister of public enterprises when the board members involved in the allegedly corrupt contracts were named, told the committee he had a limited role in making the appointments and that state-security authorities should vet prospective board members more closely.

“There is a very high cost to corruption and allegations of state capture and there is a very high benefit to action being taken against those issues,” he said. “Unfortunately, the lesson can only be learned after enormous cost to the economy, but nonetheless the lesson has been learned.”

Source: https://www.bloomberg.com/news/articles/2018-03-13/south-africa-graft-inquiry-to-summon-zuma-s-son-gupta-brothers

02 Mar

Politics Can Be Murderous in South Africa’s Port City of Durban

Politics around South Africa’s third-biggest city, Durban, can be a murderous affair. A bloody battle for positions gripping the African National Congress has left dozens dead in KwaZulu-Natal province in the past year.

The region, which accounts for more than a fifth of the party’s total membership, has been a battleground between two factions vying for control of positions with access to government budgets worth billions of rand.

A local councillor who’s represented constituents in the Umlazi community outside Durban for the past decade learned in December that party colleagues were plotting her assassination.

“The political contest is no longer healthy,” said the councillor, who asked not to be identified because she fears for her life. “If I challenge you, it means I will be your enemy till you die.”

KwaZulu-Natal was one of the hotly contested regions in the race to elect a successor to Jacob Zuma as leader of the ANC in December.

Cyril Ramaphosa defeated Nkosazana Dlamini-Zuma, Zuma’s former wife and ex-chairwoman of the African Union Commission, and was elected South Africa’s president last month.

Violence has claimed the lives of 22 politicians since January 2016 and about 100 others in the past four years in the province, according to Mary De Haas, a researcher who’s monitored the region for several decades. Drive-by shootings are a favoured method of killing in Durban, a port city of 3.7 million people.

It’s so bad that a commission headed by Marumo Moerane, a lawyer, is holding public hearings on the violence that are regularly attended by sobbing relatives recounting how their family members were slain.

Recent political turmoil in the government has filtered down to cripple some of South Africa’s crime-fighting units, said Senzo Mchunu, the former premier of KwaZulu-Natal.

The province is no stranger to political violence, reaching its height in the run-up to South Africa’s first democratic election in 1994 that brought Nelson Mandela to power after white-minority rule.

To read the full article, click here.

01 Mar

Bank of Baroda Cries Foul as Cash Frozen in South Africa Gupta Case

India’s Bank of Baroda objected to the freezing of some of its funds in South Africa after it was alleged to have helped transfer money meant for the development of a government-backed dairy farm to the politically connected Gupta family and their associates.

The 30 million-rand ($2.5 million) preservation order is wrong because the money due to clients had already been withdrawn and the attachment of an equal amount of the lender’s own funds is “unsustainable,” Luke Spiller, a legal representative for the Bank of Baroda, said in the Free State province’s High Court in Bloemfontein on Thursday.

The court documents showed that other banks transferred cash to the same dairy farm but their money wasn’t frozen, making the order against Bank of Baroda unfair, the lawyer said.

The case is related to a state-owned farm in the Free State leased to Gupta-linked company Estina (Pty) Ltd. in 2012.

The regional government agreed to help develop the land, but the High Court on Jan. 19 gave the National Prosecuting Authority permission to freeze the project’s assets after more than 220 million rand destined for the farm was said to have been transferred to Atul Gupta, one of three brothers, and a number of companies and associates. State prosecutors allege Atul Gupta received 10 million rand.

Atul Gupta and businesses linked to his family have applied to the same court to reconsider the assets’ attachment. The Gupta family have close ties to former President Jacob Zuma and have been accused of using the association to win state business and influence government appointments.

Zuma and the Guptas have denied wrongdoing. The crackdown on the dairy farm project came just weeks after South African President Cyril Ramaphosa replaced Zuma as head of the ruling African National Congress.

The prosecutor’s papers are “a national embarrassment,” Michael Hellens, a lawyer acting for a number of Gupta-linked companies including Oakbay Investments Pty Ltd., said in the same court.

To read the full article, click here.

22 Feb

Gupta Empire Crumbles as Zuma Exits South African Presidency

For years, brothers Ajay, Atul and Rajesh Gupta were ranked among South Africa’s most prominent businessmen and socialized with the ruling elite, including their friend, then-President Jacob Zuma.

They weathered accusations that they’d exploited their political connections to land an aircraft at a high-security military base to ferry guests to a private wedding, installed their allies in key positions at state companies, tried to influence cabinet appointments and looted billions of rand of taxpayer funds. Law enforcement agencies took no visible action against them, saying only that investigations were ongoing.

That all changed on Feb. 14, when Zuma quit as president under pressure from the ruling African National Congress the same day the police’s Hawks investigative unit staged a dawn raid on the Guptas’ sprawling luxury estate in Johannesburg’s Saxonwold suburb. Some of their top lieutenants were arrested and the eldest brother, Ajay, was declared a fugitive.

The timing of the two events was no coincidence, according to Mark Swilling, a professor at Stellenbosch University who convened an academics’ study last year that concluded that the Zumas, the Guptas and their allies had orchestrated “a silent coup.”

“There is a multi-pronged attack on the Zuma-Gupta network,” Swilling said. “One of these was a political attack launched from within the ANC to get rid of Zuma as the linchpin of that power elite. Linked to that is another set of actions initiated by the criminal justice system to nail the Guptas.”

The Guptas arrived in South Africa from India in the early 1990s and built up a business empire with interests ranging from mining to pay television. They acquired a private jet and mansions from Cape Town to Dubai. Their business partners included Zuma’s son, Duduzane, and they employed one of his four wives.

The Guptas became household names in South Africa in 2013 when they secured access to the Waterkloof airforce base for their wedding guests.

To read the full article, click here. 

20 Feb

Zuma’s Political Victims to Return to South Africa Cabinet

Former South African ministers banished to the political wilderness under Jacob Zuma’s presidency are set to make a comeback as his successor prepares to revive the stagnant economy.

The ruling African National Congress’s top-six officials, including President Cyril Ramaphosa, will meet on Friday to discuss changes to the cabinet, according to three people who asked not to be identified because they aren’t authorized to speak publicly on the matter.

Finance Minister Malusi Gigaba, who Zuma appointed on March 31 when he had no experience in economics, tax, or banking, is among those who will be affected in the shake-up that’s expected to be announced next week, they said. Gigaba will deliver his first full budget to lawmakers on Wednesday.

Among those touted to come back are former Finance Minister Pravin Gordhan and his deputy Mcebisi Jonas. They lost their positions in the March midnight cabinet shuffle that led to a credit-ratings downgrade and a sell-off of the country’s currency and bonds.

The two, who were widely respected by investors, became part of a campaign against ‘state capture,’ a term used in South Africa to describe allegations that Zuma ceded control of the state to the Gupta brothers, who are his friends and business associates of his son, Duduzane. They all deny wrongdoing.

“It is the prerogative of the president to change cabinets; of course there will be those engagements by the top leadership,” ANC spokesman Pule Mabe said by phone. Tyrone Seale, the presidency’s acting spokesman, didn’t immediately answer a call to his mobile phone.

Zuma’s nine-year term ended last week when the National Executive Committee of the ANC instructed him to resign as head of state in order for Ramaphosa to take over.

Ramaphosa could also appoint Nhlanhla Nene, another finance minister that Zuma fired and replaced with a little-known lawmaker in 2015, to the cabinet, the people said. Nene declined to comment.

To read the full article, click here.

15 Feb

Ramaphosa Faces Challenge to Rejuvenate South Africa After Zuma

Cyril Ramaphosa faces a tough road ahead as South Africa’s new president after Jacob Zuma’s resignation late Wednesday ended nine years of his scandal-marred administration.

Ramaphosa remains acting president until his expected election in parliament later Thursday in Cape Town and swearing in by the chief justice.

Groups of people gathered in the streets of the country’s cities celebrating the possibility that South Africa may regain its reputation as “the rainbow nation” that was so tarnished in the Zuma era, while markets cheered the transition of power.

A lawyer and one of the wealthiest black South Africans, Ramaphosa, 65, is widely expected to adopt business-friendly policies, prompting the rand to rise more than any other currency against the dollar since his election as ANC leader on Dec. 18.

While he showed remarkable political deftness in outmanoeuvring Zuma since his tight election as president of the ruling African National Congress in December, the road ahead is perilous — the ANC remains deeply divided, the cabinet needs a clean-out and a moribund economy requires a jump-start.

“The new president is going to have to make tough decisions on who is in his cabinet and that’s where the tough fight is going to be from now on,” said Ivor Sarakinsky, academic director at the University of the Witwatersrand’s School of Governance in Johannesburg.

Markets cheered the decision, with the rand extending Wednesday’s 2 percent rally against against the dollar, reaching the strongest level since February 2015 on Thursday.

It was 0.5 percent higher at 11.6570 at 9:48 a.m. in Johannesburg. Stocks climbed the most since June 2016 and the yield on the local-currency bond due in 2026 dropped five basis points to 8.34 percent.

During his resignation speech, Zuma backed away from the tone of comments he’d made in an interview with the state broadcaster earlier in the day, when he said the ANC’s decision to push him from office threatened to become “a crisis that I think my comrades will not be able to handle.”

To read the full article, click here.