President Cyril Ramaphosa’s ambitious plans to rescue SA’s economy from the ravages of state capture are in the balance today, after a gulf in trust opened up between him and finance minister Nhlanhla Nene this week over the latter’s private meetings with the Guptas and his failure to disclose them.
Until Nene’s shock disclosures at the Zondo commission this week, he and public enterprises minister Pravin Gordhan had been the aces up Ramaphosa’s sleeve in his clean-up campaign.
Now the finance ministry is again in the balance, and there are serious questions about Nene’s credibility, particularly over whether the Guptas had any role in his previous deployments as minister and deputy minister of finance, and whether he ever acted under their instruction.
The Sunday Times has learnt that when he was reappointed to the cabinet in February, Nene did not disclose to Ramaphosa that he had seven meetings with the Guptas during his previous stints in the finance ministry. In a response to questions from the Sunday Times, Nene said he did not think that the meetings he had with the Guptas were relevant for the purpose his appointment, but “looking back I should have informed the president then, or subsequently”.
“The question never arose and I am not aware that presidents ask people they are about to appoint to reveal who they have met as part of the appointment process.”
Nene this week disclosed to the Zondo commission investigating state capture that he held meetings with Ajay Gupta after being invited to Sahara Computers offices and later to the family’s Saxonwold, Johannesburg, compound.
“I regarded the visits as one of my tasks as deputy minister to engage with different stakeholders in the economy,” said Nene. He said he had also been to the Gupta house twice after first being appointed minister, in August and November 2014.
“I was not requested to do anything to benefit the Gupta family or Mr Ajay Gupta, nor was I offered any inducement,” said Nene. He told the Sunday Times that he had no meetings with the Guptas prior to his appointment as deputy minister, and denied they were involved in his ministerial appointment.
“The Guptas did not discuss with me the possibility of me being appointed minister of finance.”
He said he shared his commission submission with Ramaphosa before appearing before deputy chief justice Raymond Zondo on Wednesday. Nene is now facing an onslaught of public criticism for only owning up to the interactions with the family after the circulation of a text message alleging he was “linked to the Guptas” and “instrumental in funding many of their business deals”.
“The disclosure of my meetings with the Guptas was included in the statement long before the circulation of the text messages,” Nene said. “I had not kept a record of these meetings. It didn’t help also that when I was fired in December 2015, staff who had been in my office shredded some of the records, including my driver’s log book where he had recorded all the trips we had to meetings, including those with the Guptas. I had to rely mostly on my memory as well as the recollections of my driver.”
Ramaphosa was apparently unaware that Nene was to make an apology to the nation on Friday for meeting the Guptas at their Saxonwold home rather than at his office, and not disclosing the details earlier. He is said to be “very shocked” at the revelations of Nene’s relationship with the Guptas but is understood to have not yet discussed the matter and the future of the finance ministry with him.
High-profile insiders in the presidency say Ramaphosa is in a quandary about what to do as the storm around Nene undermines attempts to clean up the government and stabilise the National Treasury after years of volatility during the Zuma administration.
“Why did he not earlier disclose that he had met them, under what circumstances?” said a presidency official. “Did these meetings lead to him doing anything illegal or unethical? Did he do the Guptas any favours?”
Nene’s colleagues and officials in the Treasury became aware of his meetings with the Guptas only as his legal team was finalising his affidavit last week. Gordhan, who was minister of finance at the time most of the meetings were held, and Nene’s former deputy, Mcebisi Jonas, said they had “no knowledge” of his contact with the Guptas.
Nene said he met with “many people in business, politics and the social sector, the details of which I never discussed with the minister or Treasury officials”. He said in his meetings with the Guptas, “there was nothing specific to National Treasury or the ministry of finance discussed”.
“In retrospect, this was gross oversight on my part, particular after Mcebisi had informed me of his offer by the Guptas. At the time these meetings were taking place, I did not think the meetings were of any significance as there was nothing that National Treasury or the ministry of finance needed to do with regards to the discussions I had had with the Guptas.”
Commenting to the Sunday Times about his reaction to calls for his resignation and concerns about the credibility of the finance ministry, Nene said: “In the ANC, in cabinet and in government as a whole, the period during which all these events took place was a very unusual and difficult time. I appreciate the reaction of fellow South Africans, which has ranged from those who call for me to fall on my sword to those who thanked me for coming out and apologising. Beyond that, I have nothing more to say on this point.”
Ramaphosa also faces a dilemma over the appointment of a commission of inquiry into alleged impropriety at the Public Investment Corporation as it is likely to include allegations against Nene. The Mail & Guardian reported on Friday that Nene’s son was involved in securing funding from the state-owned fund manager while Nene chaired it.
As finance minister, Nene has to recommend to the president the names of the chair of the commission and the supporting team, as well as the terms of reference. Nene said yesterday that the inquiry details would be announced by the presidency.
“The terms are broad enough, in my view, to include the allegations published by the Mail & Guardian,” he said.
Nene testified before Zondo that he refused to bow to pressure from former president Jacob Zuma and his cabinet colleagues to sign off on the nuclear deal. He also told the inquiry he was fired on the day the cabinet approved the deal after he and former Treasury director-general Lungisa Fuzile argued against the “unaffordable” deal.
But questions are now being raised about whether the Guptas interfered in the ministry of finance during Nene’s previous term as minister — particularly over his failure to act to protect the South African Revenue Service (Sars) when it was plunged into crisis.
Former employees of Sars say they made numerous pleas to Nene for help when allegations arose of a “rogue unit”. Former Sars deputy commissioner Ivan Pillay asked for a commission of inquiry to investigate alleged rogue activity at the revenue authority.
“My initial reaction was to leave these matters to the institution to deal with,” Nene said yesterday.
“However, it soon became clear — this is now towards the end of 2014 — that [Sars commissioner Tom] Moyane was interested in the matter of the investigations unit more than revenue collection. It was at this point that a decision was made to appoint an advisory panel headed by Judge Frank Kroon, to which all matters relating to the investigations unit would be referred.”
Presidential spokesperson Khusela Diko declined to comment on whether Ramaphosa discussed Nene’s testimony with him...