SUNDAY TIMES - Zuma's allies in revolt against Guptas (audio)
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Sunday Times News By THANDUXOLO JIKA, PIET RAMPEDI and SIBONGAKONKE SHOBA, 2016-01-31

Zuma's allies in revolt against Guptas (audio)

President Jacob Zuma and the Minister of Mineral Resources, Mosebenzi Joseph Zwane.
Image: Presidency

President Jacob Zuma's closest political allies this week broke ranks with the president over his close ties to the influential Guptas, in a move that has isolated Zuma and laid bare growing hostility in ANC circles to the family.

Although there have long been whispers about the family's close ties to Zuma and some of his ministers, this week Cosatu and SACP leaders went public with their growing irritation at the influence the Guptas are said to have on some leaders.

SACP deputy general secretary Solly Mapaila sparked a debate this week at the ANC's national executive committee lekgotla, which was attended by Zuma, saying the Guptas were the "elephant in the room".

Mapaila confirmed that he had raised the issue of the Guptas' perceived influence.

"We felt we needed to raise it in a meeting because people have been speaking about this thing hush-hush, gossiping about it, and sometimes it has been raised in order to attack the president. And because of that, people who wanted to raise the issue could not raise it because they would be [seen as] attacking the president," he said.

"We have heard of the role of the Guptas and we wanted to tell [NEC members] that they do not account to the Guptas. They account to the liberation movement, headed by the ANC and its government, and not to individual families," said Mapaila.

ANC spokesman Zizi Kodwa confirmed that a discussion on perceptions that some private business people were controlling certain leaders was held at the lekgotla.

He denied, however, that the Guptas were mentioned by name.

"There was never a mention of one person or a group or company. But there was a discussion that there is a threat. The lekgotla warned that we must deal with this threat even if it is a perception that there are people who are strong outside the state who can influence not just the president but can influence cabinet," said Kodwa.

The latest development follows a visit to Zurich in December by Mineral Resources Minister Mosebenzi Zwane, who met the CEO of the Glencore mining conglomerate in the Swiss city, apparently to help facilitate a deal for a Gupta-linked company to buy the distressed Optimum Colliery in Mpumalanga.

A week later, the sale of Optimum coal mine to the Gupta family was announced. The minister's presence at the meeting was considered highly unusual.

Cosatu president S'dumo Dlamini told the Sunday Times that the federation was concerned about the Guptas' perceived role in recent developments in the mining industry - including the acquisition of Optimum Colliery by the Gupta-linked Tegeta Exploration and Resources.

"We can't continue to be quiet over this matter because workers are threatened with retrenchments because people want to buy certain businesses ... certain groupings want to buy these mines but they want them cheaper.

 

"In Mpumalanga there is a mine ... that mine is forced to retrench and close down for reasons other than operational reasons," said Dlamini. He said the mine he was referring to was Exxaro's Arnot mine, where "the same thing [happened as at Glencore]".

"In this [instance] Eskom is saying that Exxaro must reduce their coal prices [and] if they don't do that they will cut the contract, which forces the company to close down ... but then you have to look deeper, what lies behind that ... it's the Guptas in this one.

"We won't keep quiet," he said.

The Sunday Times can reveal that Zwane's three-day itinerary consisted entirely of meetings and dinners with Glencore CEO Ivan Glasenberg at the luxurious Dolder Grand hotel, where he stayed.

Zwane arrived in Zurich on an Emirates flight, via Dubai, on November 30 last year. A Bombardier ZS OAK, a plane owned by the Guptas, is known to have been in Zurich at the same time. Zwane and the Gupta delegation left Zurich, separately, on the same day, December 2, headed for Dubai.

Zwane's spokesman, Martin Madlala, confirmed the trip.

"[Zwane] undertook an official trip, travelled commercially and it was facilitated by authorities in line with standard government protocols," he said.

He did not respond to more detailed questions about the trip.

It has been learnt that, after being received at the airport by South African diplomats as per protocol, Zwane refused further assistance from the embassy and was not accompanied by ambassador Claudinah Ramosepele - as is the norm when a minister is on a working visit in a foreign country.

National Union of Mineworkers president Piet Matosa raised suspicions about Zwane's trip.

"We know that the minister doesn't report to us [but] we would have expected that at least he should sensitise us that 'there is this transaction, I am accompanying these people'," Matosa said.

The Guptas declined to comment on Zwane's trip and their relationship with him.

But a national executive committee member sympathetic to the Guptas said ANC leaders' relationships with the Guptas were being used to tarnish names.

"The SACP can't expect that all relationships with the Guptas are corrupt. They are using it to score cheap points," the NEC member said.

The Exxaro case raised by Dlamini involves the recent closure of Arnot mine in Mpumalanga, after the expiry of its coal-supply contract with Eskom. Eskom refused to renegotiate the R900-a-ton contract, saying it was unaffordable.

Eskom had also refused to renegotiate Glencore's R150-a-ton contract, which contributed to the company's decision to sell its mine.

An executive at Glencore, who asked not to be named, said the company had been strong-armed into selling.

The insider said Eskom's refusal to renegotiate coal prices had put financial strain on Glencore, making running the mining operation difficult.

"That is when the Guptas came with an offer. But we refused to sell, saying the mine was not for sale."

The insider said the Glencore mines were then hit with Section 24 notices by Zwane's department, which sent inspectors and threatened to close down some of its mines.

That was when Glencore entered into negotiations with the Gupta company, he said.

Glencore declined to reply to detailed questions.

Eskom CEO Brian Molefe denied that the parastatal had in any way influenced the sale of Optimum Coal to Tegeta.

"Eskom is not a Glencore shareholder," said Molefe.

The parastatal also defended its decision to fine Glencore R2.5-billion over the quality of its coal.

"Penalties are part of the normal service level agreements between suppliers and their clients.

"Optimum had failed to provide Eskom with the contracted quality and quantities of coal, hence the penalty ... Moreover, Glencore has never suggested that Eskom was trading unfairly or outside of the legally binding contract," said Molefe.

Gupta family spokesman Nazeem Howa said the information it had received about the debate at the NEC meeting was that it was balanced and not a one-sided attack on the Guptas.

"It is important to note that we have also learnt that the debate also saw several other leading ANC members responding to the statement made about influence over individuals," said Howa.

He said Tegeta would honour Optimum's Eskom contract "at the current rates until the end of the contract period" - in 2018. - Additional reporting by Qaanitah Hunter

Read Eskom’s Full Response Here

Read the Guptas Full Response Here

 

SACP: ANC should not be scared of Guptas

SACP second deputy general secretary Solly Mapaila said the party had to speak out against the Guptas because it wants to send a clear message to all ministers, MECs, directors-general, mayors and chief executives of parastatals that it will not tolerate corporate capture of the government.

“We felt we needed to raise it in a meeting because people have been speaking about this thing, hush hush, gossiping about it and sometimes it has been raised in order to attack the president.

“And because of that, people who wanted to raise the issue could not raise it because they would be saying they are attacking the president. So we have nothing to lose. The president knows we have supported him, so we can criticise him constructively,” Mapaila said.

“We have heard [of] the role of the Guptas and we wanted to tell them [NEC members] that they do not account to the Guptas. They account to the liberation movement, headed by the ANC and its government, and not to individual families ... so they don’t feel scared that if the Guptas call them they have an obligation to go [to the Guptas’ Saxonwold compound] or they would be removed from government.”

Mapaila said the SACP wanted to defend the country’s sovereignty from the “influence of other countries”.

“When we [don’t defend] our sovereignty and independence we allow a mere family to almost capture our state. Because if you allow that to happen we will definitely lose our independence.

“The value of our democracy will be deeply eroded. Collectives that are democratic collectives — whether it’s the collective of the ANC, the collective of the alliance, and the collective of government — will mean nothing.

“The votes would mean nothing because individual families will then decide what should be the priorities and the discourse of our republic,” Mapaila added.

 

Zwane and the Guptas

Mosebenzi Zwane, who was an agriculture MEC in the Free State in 2013, was at the centre of the controversial Gupta plane landing at the Waterkloof Air Force Base in Pretoria.

Zwane had issued an official letter inviting the Gupta’s visitors to the country - the same letter which was used by the influential family to justify the landing of the plane at the airforce base, carrying wedding guests from India.

The letter’s purpose was to give the impression that the visit was an official government engagement.

Zwane, a teacher by profession, was also linked to the controversial Estina dairy project outside his hometown of Vrede.

The project was spearheaded by Gupta family associates but the family denied any involvement in the project.

Reports had suggested that the business with Estina, a company without agricultural experience and led by a computer sales manager, flouted Treasury rules and was designed to milk provincial government coffers.

The project was apparently hastily put together after Zwane and his team visited  India in 2012.

Last year Zwane was quietly sworn in as an MP and a few weeks later he was announced by President Jacob Zuma as the Minister of Mineral Resources.

He is also facing a public protector investigation after the DA in the Free State alleged that he had undervalued his private home to avoid paying rates and taxes.

The DA alleged that Zwane’s house was valued at R29,000 whereas other houses in the area had been valued at R300,000.

jikat@sundaytimes.co.za, rampedip@sundaytimes.co.za, shobas@sundaytimes.co.za