SAA and Transnet malaise expected in first part of state capture report

Little-known group Democracy In Action failed in its bid to block Raymond Zondo’s handover of the report to President Cyril Ramaphosa

04 January 2022 - 16:20 By Erin Bates
Acting chief justice and leader of the inquiry into state capture, Raymond Zondo. File photo.
Acting chief justice and leader of the inquiry into state capture, Raymond Zondo. File photo.
Image: ELMOND JIYANE/GCIS

South Africans will soon know some of the outcomes of the state capture inquiry when acting chief justice Raymond Zondo hands over the first part of the commission’s final report to President Cyril Ramaphosa on Tuesday afternoon. 

Business Day was reliably informed that the first part of the much-awaited report will focus on graft at aviation state-owned enterprises — including national carrier SAA, SAA Technical and SA Express — and rail utility Transnet.

Zondo’s report has been divided into three parts, with the second part expected to be handed to the president in late January, and the final part due to be handed over in late February. The presidency has indicated the first part of Zondo's full report will be made public within hours, as those fingered have already had an opportunity to respond.

Ramaphosa is due to receive the first document at 4pm on Tuesday at the Union Buildings in Pretoria. The handover from Zondo will expose alleged misconduct by SAA’s board and chairs — notably former chair Dudu Myeni, a close ally of the former president who chairs the Jacob Zuma Foundation — and former ministers. The section will also detail the actions of private businesspeople and contractors working with the airline.

SAA continues to struggle financially after years of surviving on government funds. According to testimony presented by witnesses at the inquiry, billions of rand were siphoned from the airline through shady deals, fraud and corruption.

Transnet faced a similar predicament, allegedly losing billions in corrupt agreements. The inquiry studied two major Transnet deals of concern. The contracts for locomotives, in partnership with railway companies China North Rail and China South Rail, also implicated private financiers and management consultancies.

After the announcement of the handover of the report, a little-known organisation, Democracy In Action, with scant record of public activity outside litigating in politically sensitive cases (in which it has defended the conduct of the erstwhile public protector) lost its bid to block the release.

Zondo, one of four judges contending for the vacant chief justice position, has faced criticism for missing deadlines, obtaining several extensions for the process, and failing to promptly file its concluding document.

The complete report will collate more than three years’ evidence, the testimony of more than 300 witnesses, and further evidence from hundreds more sources.

The inquiry’s voluminous records included the Gupta leaks, with critical data drawn from a business server and held on a hard drive. The material was provided to US authorities including the FBI. The brothers Ajay, Atul and Rajesh “Tony” Gupta, who grew close to Zuma and formed business partnerships with his son Duduzane Zuma, were sanctioned by the US treasury in late 2019.

The report will include findings on the Guptas’ alleged threat to SA’s sovereignty, which intelligence seniors testified amounted to a threat to national security.

Zondo’s document will interrogate a claimed racket involving Zuma, Duduzane Zuma political allies such as Myeni, and their close associates, foremost the Gupta family, to hijack organs of state (and their resources) to the benefit of a political elite and its business allies.

The suspended secretary-general of the ANC, Ace Magashule, was implicated in alleged lawbreaking during testimony about two lucrative contracts in the Free State when he was its premier. Magashule and Mosebenzi Zwane, who advanced from agriculture MEC in the Free State to mineral resources minister under Zuma, were the target of repeated accusations of wrongdoing in the province.

Former North West premier Supra Mahumapelo, another Zuma loyalist, was among scores of politicians — including current and former ministers and parliamentarians — also implicated in testimony before Zondo.

Mahumapelo was implicated in testimony about an aviation contract in the North West  involving SA Express and the provincial government. He and former ministers Lynne Brown and Dipuo Peters faced claims of accepting millions of rand in kickbacks.

Much of the inquiry’s work dealt with state capture, corruption and fraud at state-owned enterprises (SOEs) including Eskom, Transnet, the Passenger Rail Agency of SA (Prasa) SAA and SA Express, among others.

Law-enforcement agencies such as the police, prosecuting authority and intelligence services formed another important focus area. Zondo’s recommendations must include ways to stem wide-scale corruption between the government and the private sector.

Ramaphosa was the penultimate witness before Zondo in August. He appeared before Zondo as a witness in both his capacities as  head of state and leader of the ANC.

In October, former spy boss Arthur Fraser sought to compel Zondo to hear his testimony, which Fraser claimed would expose the true extent and nature of state capture, corruption and fraud. He urged Zondo to hear him, and raised the midyear violence after Zuma's imprisonment for contempt of an apex court order to testify at the commission.

Zondo dismissed Fraser’s bid on December 1 in what was the final sitting of the process ahead of Tuesday’s first handover.

The event will be broadcast live and the first third will be released to the public and media soon afterward.

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