Malema: I know who gave cash to Zuma

26 April 2015 - 02:00 By STEPHAN HOFSTATTER, PIET RAMPEDI and MZILIKAZI wa AFRIKA

Julius Malema says he has first-hand knowledge of the secret donors who bankrolled President Jacob Zuma using a series of murky trusts.

He made this startling claim in an 83-page affidavit filed in the High Court in Pretoria this week in his ongoing battle with the taxman.

This is the first time a current or former ANC insider has revealed the source of Zuma's funds when he was broke and jobless after former president Thabo Mbeki fired him as South Africa's deputy president in 2005. Malema is also the first high-profile politician to reveal how most ANC struggle veterans funded their lifestyles.

Malema said he personally raised funds for Zuma at public ANC rallies "and from unidentified donors" before Zuma became president in 2009.

There was no difference, he added, between the conduct of his Ratanang Family Trust, which bankrolled his lavish lifestyle, and that of Zuma's trusts.

"More or less formal trust structures were formed into which donations were made - some large, some small - for the benefit of the leaders. I have first-hand knowledge of this: I dealt with donations to President Zuma. I, myself, was maintained in the same manner. Sometimes money was simply paid into my bank account by anonymous donors, sometimes known supporters paid my expenses or made gifts of money, clothes and other necessities of life and sometimes also luxuries."

Yesterday, Zuma denied he had ever received funds from any "secret donors". His spokesman, Mac Maharaj, said: "The president has consistently disclosed all income received in his tax returns to SARS."

ANC spokesman Zizi Kodwa said Malema's comments about Zuma and the party were "desperate", "spurious" and irrelevant to his case with the South African Revenue Service.

"Desperate times require desperate measures and tactics. Obviously for him he elected to make spurious allegations against some persons. President Zuma and the ANC aren't party to his case and will not dignify his allegations further," Kodwa said.

However, Malema said it was common knowledge that ANC leaders received funds from anonymous donors, although he denied that these gifts bought political influence. "These sorts of gifts are not made to get anything in return. They are made by political supporters to impecunious politicians. These gifts are not income - they are not expected or made because they have to be made. They are made out of liberality."

Malema said Limpopo businessman Lesiba Gwangwa, whom he described as a childhood friend, had donated 50% of the shares in his company, Guilder Investments, to Ratanang purely "out of friendship" and nothing else.

Both were slapped with corruption charges and hefty tax bills related to Ratanang after Malema allegedly used it to receive kickbacks from companies that benefited from contracts awarded by his company On Point on behalf of the Limpopo government.

Political Fallout

In papers filed this week, Malema repeated his claim that his tax troubles were linked to his political falling out with Zuma and his subsequent expulsion from the ANC in April 2012.

A month earlier, SARS had told him he owed R16-million in unpaid taxes. In October 2012, SARS agreed that he could settle the bill with a R4-million payment, but the deal was dashed for political reasons, he said.

He claimed his popularity revived when he championed the rights of mineworkers after the Marikana massacre in August 2012.

Soon afterwards, a last-ditch attempt to rejoin the ANC fold at its elective conference in Mangaung in December 2012 was rebuffed.

Malema was then featured in City Press in a cabbage patch on his farm under the headline "I am a leper". He said the story angered the ANC and stole the thunder from its January 8 party celebrations.

At Zuma's behest, then-finance minister Pravin Gordhan "gave an instruction that notwithstanding my pending compromise proposal, SARS had to use each and every means to destroy me financially. SARS complied with this instruction."

Gordhan rejected "Mr Malema's claims in the strongest terms as these are baseless and unfounded". His spokesman, Dumisa Jele, said: "In terms of tax legislation, ministers do not get involved in individual tax matters as a matter of principle."

But Malema insisted SARS acted on political instructions. "The ANC was extremely irritated by me retaining political power outside the ANC and the leadership instructed SARS to destroy me," he said.

Almost immediately after the cabbage patch incident, SARS launched sequestration proceedings and seized his assets. A curator raised R3.7-million with the sale of his Sandton and Polokwane houses.

After he established the EFF, Malema approached SARS again "to reach a compromise" on its sequestration application.

He stood to lose his seat in parliament if declared insolvent.

He arranged a deal with SARS in May 2014 to pay R4.2-million to settle his tax bill in instalments. The last instalment was in November 2014.

But Malema said the arrangement "displeased Zuma", prompting SARS to renege on the deal.

Lies

In papers filed earlier this month, SARS said it had done so because Malema had lied about his source of income to pay part of his tax bill and tried to dodge paying donations tax.

SARS also assessed his taxes for 2011 and 2012 and slapped him with another R14-million bill, bringing his total liability to R32-million, including interest and penalties.

SARS accused Malema of lying when he said R1-million of the R4-million he had agreed to pay SARS would come from a "Mr Renier Martin" and the rest would be paid by the Julius Sello Malema Trust.

The actual donor was Kyle Phillips, director of tobacco company Carnilinx, which is run by Malema benefactor Adriano Mazzotti, who had paid the EFF's R600000 registration fee last year.

But Malema said it only transpired after he had reached an agreement with SARS that Martin could not pay. He then obtained the money from Phillips, who paid R1-million directly to the curator, stating "his full names, cellphone number and the cause of his payment".

Malema said he received payments directly to his personal account and his trust from 31 "donors who duly declared the donations to SARS". The undeclared funds from unidentified donors were all below the minimum threshold for donations tax.

SARS spokesman Luther Lebelo and Malema's lawyer, Tumi Mokoena, declined to comment.

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