Zondo told of R49bn in 'tainted' contracts, with Gupta family scoring

24 May 2021 - 18:15
Deputy chief justice Raymond Zondo was on Monday told about R49bn worth of tainted contracts.
Deputy chief justice Raymond Zondo was on Monday told about R49bn worth of tainted contracts.
Image: Veli Nhlapo

The state may have paid more than R49bn in contracts tainted by state capture, which saw the Gupta family score handsomely.

That was the testimony of Paul Holden, speaking at the Zondo commission on Monday about money flows to Gupta-linked companies as a result of state capture.

Holden is a London-based researcher who is a co-founder — together with former ANC MP and arms deal whistle-blower Andrew Feinstein — of Shadow World Investigations.

He detailed transactions which ended up with the Gupta family enterprise getting paid millions of rand via several contracts awarded by the provincial governments of the Free State, the North West and Mpumalanga, as well as state-owned enterprises.

Holden described the contracts as tainted by state capture because of the involvement of the Gupta brothers and their associates. The contracts were found to have a number of irregularities in their awarding.

“We have identified those contracts where there are payments made to what we call first-level laundries, where those first-level laundries cannot be conceived of always performing any legitimate businesses but were instead conduits to making payments to the benefit of Gupta enterprises,” said Holden.

The contracts cited by Holden included the infamous Estina dairy farm deal, advertisements paid to The New Age newspaper and several deals with Eskom and Transnet.

He further said he could not tell the commission about the exact cost or losses suffered by the state due to state capture involving the Gupta family.

“The total value of kickbacks paid to the Guptas by third-party contractors to conclude contracts with the state ... this amount could be assumed to be a loss to the state, because an open and honest tender process, without the interference by the Gupta enterprise or other corrupt parties, could be assumed that the bidders could have fixed prices that did not need to accommodate kickbacks that they have committed to pay the Gupta enterprise.

“Here we actually are able to identify a loss to the state, directly, which is the amount of kickbacks that we are aware of and that we have identified previously as R7,305,156,142.06,” said Holden.

He said there were in other instances where the state paid monies to the Gupta enterprise without any real attempt to deliver value to the state.

Holden said the payments of R254m to The New Age for advertising and marketing and the Estina dairy farm project were some of the examples of payments that were not meant to give value to the state.

He said price inflation related to the Gupta-linked contracts was also a factor in how the state made losses from state capture.

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