Saga of ‘power-drunk’ Jacob Zuma

Zondo inquiry hears how Nene saved SA from ruin

Finance minister Nhlanhla Nene testifies at the state capture inquiry.
Finance minister Nhlanhla Nene testifies at the state capture inquiry.
Image: Thapelo Morebudi

One man standing his ground in Russia.

Until now, South Africa never knew how its finance minister, Nhlanhla Nene, braved former president Jacob Zuma and his cabinet colleagues and protected the country from certain financial ruin.

Nene has kept silent for almost three years about the pressure and hostility against him in the buildup to his dismissal in December 2015.

He finally had his say, giving exhaustive testimony at the Zondo commission on Wednesday about the onslaught against him and the National Treasury, how they were labelled “spies” by Zuma for opposing his pet projects, and how Zuma dismissed him in a two-minute meeting on the day the nuclear deal was approved by the cabinet.

Nene testified how during the Brics (Brazil, Russia, India, China and South Africa) summit in Russia in July 2015, he refused to put his signature on a letter that would have guaranteed financing for a deal with Russia on the nuclear build programme.

Nhlanhla Nene has told the Zondo commission that his refusal to approve the nuclear deal and the SAA strategy led to his...

Posted by Times LIVE on Wednesday, 3 October 2018

“Mr Zuma criticised me for not finalising the financial aspects of the proposed nuclear deal with Russia,” he said.

“Mr Zuma said he was not happy that I was not doing what I was supposed to have done a long time ago so that he could have something to present when he meets President [Vladimir] Putin for their one-on-one meeting.

“I told President Zuma in the meeting that I could not sign the letter without having first interrogated the financial and fiscal implications and proposed funding model.”

Nene refused to budge, even after being presented with various versions of the letter by former energy minister Tina Joemat-Pettersson and hostility from then international relations minister Maite NkoanaMashabane and former state security minister David Mahlobo.

Nene’s was the first evidence at the state capture inquiry from a serving member of cabinet and by far the most dramatic testimony, exposing Zuma as power-drunk and contemptuous of the responsibilities on the minister of finance and strict rules governing state spending.

Nene told the inquiry how the day before his axing, Zuma threatened him and former Treasury director-general Lungisa Fuzile at a meeting attended by ministers involved in the nuclear project.

This was after Nene and Fuzile opposed a proposal by the department of energy on the nuclear deal as it severely understated the cost of the project.

Nene said the proposal was based on an exchange rate of R10/$.

“This was a truly gross material understatement of the project,” he said.

It was decided to proceed with the nuclear programme proposal, despite the contrary views of the Treasury.

“In fact, the president made an off-the-cuff remark that the Treasury would not ‘do to us what you did with PetroSA’,” Nene said.

This was in reference to a refusal by Nene, Fuzile and former finance minister Pravin Gordhan to issue a guarantee to PetroSA for the purchase of a majority stake in Engen.

Nene’s caution on the Engen deal, saying he would only consider the guarantee after receiving the necessary documentation and conducting the normal evaluation process, led to Zuma making a bizarre accusation against his department.

“It was at that point that President Zuma, in the presence of the Malaysian official connected to PetroSA, raised the issue of spies within Treasury,” Nene said.

A month later, a bogus intelligence report titled “Project Spiderweb” surfaced.

It suggested that the Treasury had been “captured” by apartheid-era intelligence operatives as well as “white monopoly capital” to control SA’s finances. It also claimed that Nene was being “handled” by Absa CEO Maria Ramos, whom it code-named the “Queen of Leaves”.

Nene said his conflict with former SAA chair Dudu Myeni had led to a further breakdown in his relationship with Zuma.

He said he opposed Myeni’s attempt to change the terms of the Airbus contract as it would have resulted in SAA defaulting on its loans, with severe consequences for the fiscus.

His view that Myeni should resign because of the crisis at SAA under her leadership and his opposition to her and Zuma’s proposal for a new flight route to Khartoum had “frustrated” the former president and contributed to his firing.

In a gruelling day of testimony, Nene also confirmed that he had met members of the Gupta family on several occasions between 2010 and 2014 as deputy minister and minister of finance.

“I was not requested to do anything to benefit the Gupta family or Mr Ajay Gupta nor was I offered any inducement,” he said.

The meetings had been to discuss the economy and the Guptas’ media projects, which Nene said deserved support because of the hostility of the SA media against the ANC and the government.

“After becoming minister of finance in 2014, I went to their house on two occasions, around August and again in November 2014.

“On the first occasion, Mr Ajay Gupta raised with me an issue that he was having with Mr Iqbal Surve of Independent Media,” Nene said.

“This was in relation to a soured deal between Surve and the Guptas to buy the Independent Media Group. “

The Public Investment Corporation, which financed part of the deal, opposed changes to the shareholding, thus precluding the Guptas’ participation.

Nene said he had advised Gupta to raise the matter directly with the PIC.

He also refuted allegations by the EFF that he had facilitated business deals for the Guptas with the PIC.

He denied allegations he had used his position as chair of the PIC to benefit his family.

This follows the circulation of a text message claiming that his son Siya’s oil company received funding from the PIC and that money was channelled via a Swiss bank account to his wife.

Nene claims the EFF was behind the campaign to discredit him.

He said the timing of the social media attack on him a few days ahead of his appearance at the commission was also “very interesting and strange”.