Gigaba denies state capture accusations

[caption id="attachment_199435" align="aligncenter" width="630"] Finance Minister Malusi Gigaba
Picture: AFP[/caption]

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‚ Mayihlome Tshwete‚ Gigaba’s spokesman, said.

On Thursday‚ Pari released a report written by several academics‚ titled Betrayal of the Promise: How the Nation is Being Stolen .

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 multimillion-rand 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,” the preface to the report reads.

“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 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 chairman of Transnet’s board‚ but failed.

The appointment‚ the report says‚ was vetoed by the cabinet because apparently he was too close to the Guptas.

Sharma was later appointed as the chairman of the board acquisitions and disposals committee at Transnet in what appears to be a circumvention of the veto.

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

Brian Molefe was at this time already the chief executive of Transnet‚ appointed by Gigaba.

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

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 report said.

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.

“These accusations have been regurgitated numerous times and each time with zero substance apart from speculative insinuations‚” Tshwete said yesterday.

“Minister [Gigaba] has repeatedly availed himself for questions and he has answered those questions.”

- TMG Digital