Zuma's pals in R5-billion gas deal

'New Guptas', former convicts Kunene and McKenzie, introduced as 'BEE partners' on Moscow junket

17 September 2017 - 00:05 By MZILIKAZI WA AFRIKA and THANDUXOLO JIKA
ANC insiders have said Kenny Kunene and Gayton McKenzie, widely regarded as 'the new Guptas', have access to Zuma's official residence Mahlamba Ndlopfu - and are using their influence to seek favours.
ANC insiders have said Kenny Kunene and Gayton McKenzie, widely regarded as 'the new Guptas', have access to Zuma's official residence Mahlamba Ndlopfu - and are using their influence to seek favours.
Image: Gallo Images/Sunday World/Mabuti Kali

South Africa's "new Guptas" - former jailbirds Gayton McKenzie and Kenny Kunene - are being lined up as BEE partners in a lucrative deal with a Russian oil company, thanks to their increasingly cosy relationship with President Jacob Zuma.

The Sunday Times can reveal that the two convicts-turned-politicians travelled to Russia at the same time as State Security Minister David Mahlobo and a delegation from South Africa's Central Energy Fund to sell themselves to Russian company Rosgeo as possible BEE partners.

Last week, the Sunday Times reported that the pair have such influence with Zuma that they were in a position to nominate a future deputy minister of higher education.

The state-owned entity and government officials were in Moscow to meet with Rosgeo - just a week before the R5-billion gas deal was signed on the sidelines of the Brics summit in Xiamen, China, on September 4.

ANC insiders have said the pair, widely regarded as "the new Guptas", have access to "the big house" - Zuma's official residence Mahlamba Ndlopfu - and are using their influence to seek favours.

The Sunday Times has established that McKenzie and Kunene flew first class with Mahlobo and CEF chairman Luvo Makasi from South Africa to Dubai on Emirates flight EK 0766 on Sunday August 27. Makasi's adviser, Anda Bici, flew business class.

'Blackmailing'

The group arrived in Dubai on August 28 and flew out to Moscow on flight EK 0133, and stayed at the Ritz-Carlton.

In Moscow, Bici and Makasi met with Rosgeo representatives to finalise details of the R5-billion deal, the CEF confirmed. It is understood that McKenzie, Kunene and Mahlobo met separately with Rosgeo.

The group left Moscow on August 29, on EK 0132 for Dubai, and flew back to South Africa on EK 0761.

"I know for a fact that Gayton and Mahlobo were in Moscow a week before the Brics summit in China two weeks back," said a senior government official.

Makasi confirmed McKenzie and Kunene were in Russia at the same time as he was there with his team. "I saw them in Dubai and spoke to them briefly but I don't know what their business was in Russia," he said.

[The state security
minister] has been
running around organising deals for Gayton and Kenny
Security cluster official

Bici said the "purpose of the visit was to listen to Rosgeo's proposal, which they have been in talks with PetroSA on for five years or so".

Another senior government official told the Sunday Times that Kunene and McKenzie were introduced to Rosgeo CEO Roman Panov, in the presence of Mahlobo, on August 28 as suitable BEE partners.

The senior government official said Mahlobo's presence was to "strengthen their credibility" as business people.

An official in the security cluster said: "Mahlobo has been running around and organising deals for Gayton and Kenny. It is still not clear whether they are his proxy or they are blackmailing him to do as they say.

"Gayton and Kenny used Mahlobo as a master key to infiltrate the security cluster."

Mahlobo did not respond to questions yesterday.

It is not clear how McKenzie and Kunene learnt about the deal, but two months before it was signed, their close ally Leanne Williams, who was a Johannesburg city councillor for their political party, Patriotic Alliance, was appointed to the PetroSA board. She has since resigned, after blowing the whistle on corruption at the state entity.

News of the Russian trip has been doing the rounds in ANC circles. A national executive committee member told the Sunday Times that the two were earmarked as BEE partners in the PetroSA deal - and the deal itself was "seen a consolation to the Russians because the president [Zuma] has so far not delivered the nuclear deal".

Rosgeo had not responded to questions at the time of going to press.

McKenzie and Kunene's trip to Moscow came just a month after Energy Minister Mmamoloko Kubayi led a delegation of senior officials to an international forum in Russia. While there Kubayi and her Russian counterpart discussed "various options in the nuclear and energy space".

She also met state-owned energy company Rosatom's executives to discuss issues around the nuclear build programme. The Department of Energy could not be reached for comment yesterday.

This week a fuming Kunene, who has in the past worked as a PR consultant and lobbyist for mining companies, refused to answer questions about the trip or confirm a meeting with Rosgeo. Instead he threatened legal action against the Sunday Times.

Gas exploration

"I am not going to f*****g answer ... I am not going to answer to your agenda ... Do you ask your boss Cyril Ramaphosa where he has travelled?" he said.

McKenzie did not deny travelling to Moscow, but denied travelling with Mahlobo and declined to comment on the purpose of the trip. He only admitted to meeting Makasi and Bici in Dubai for coffee.

"Since when do I report my deals to you or anyone in media? Your paper last week intimated that I am getting training to be a spy, this week I'm signing a deal. Stay on story."

PetroSA is yet to announce who the local partner will be in the Rosgeo deal, which will allow the company to conduct exploration work for the extraction of 4million cubic metres of gas daily, to be delivered to the gas-to-liquid refinery in Mossel Bay.

The deal involves development in the exploration areas of blocks 9 and 11a off South Africa's southern coast. Rosgeo is supposed to conduct a considerable volume of geological exploration work. In particular, it is planned to carry out more than 4,000km² of 3-D seismic operations and over 13,000km of gravity-magnetic exploration works, as well as the drilling of exploratory wells. The estimated volume of the investment is $400-million (R5.2-billion).

"All projects within the country need to conform to laws that include legislation on BEE," said PetroSA spokesman Thabo Mabaso. "However ... for now no local partners have been finalised. We will announce such a partner when the matter is concluded [after] negotiation between PetroSA and Rosgeo." He said the prerogative to appoint a BEE partner lay with Rosgeo, and PetroSA would do due diligence on the partner.

McKenzie, who is the leader of the Patriotic Alliance, and businessman Kunene are said to be the masterminds behind e-mails published in the Sunday Independent that purported to show that Deputy President Cyril Ramaphosa was having a string of affairs with young women. Kunene - who last week claimed he had been shot at - was this week ordered by the High Court in Johannesburg to remove sexually explicit images of one of the women from his website.


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