Mr Ajay Gupta apparently stated that tell us “where the funds are and inform the departments to provide the funds to you and if they refuse, we will deal with them. If you have a problem with any department, we will summon ministers here” (State of Capture, P: 98).
If you ever thought that the President Jacob Zuma would not have to carry hot water for somebody, than you are wrong. The man with as many alleged Counts of Corruption as there days over two years. That President suspended the last Report made by the Public Protector Hlaudi ‘Thuli’ Madonsela on the 14th October had to have some information that we’re damaging to the Executive, the African National Congress and his connects. The Connects that are family friends of the President, hired his family members and are making sure the Zuma family owns parts of the businesses of the Gupta families as well.
What is in the Report is staggering and damaging, but the connection between the Presidential Family and the Business Family of Gupta has been known. The scandals have already been in the wind, what this does is to amplify the suspicious and the proof of the alleged connection. More and more evidence proves that the Gupta could and understood themselves as King-Makers.
So the Finance Minister mystery of 2015 has more flesh on the bone and the reports from the Media, shows the reality we’re proof, but now there are through investigation some truth behind the questionable sackings made in the name of the Guptas!
Also the transactions, selling and agreement between Eskom, Optimum and Tegeta; as well as the banking operations, loans and pre-payment of the coal that been handled in suspicious ways between Eskom and the Gupta owned enterprises together with the selling of prime estate for the balances of profit to the Gupta family and Tegeta.
Here is the some takes from the report!
Finance Minister Woes:
“It is worrying that the the Gupta family was aware or may have been aware that Minister Nene was removed 6 weeks after Deputy Minister Jonas advised him that he had been allegedly offered a job by the Gupta family in exchange for extending favours to their family business” (…) “Equally worrying is that Minister Van Rooyen who replaced Minister Nene can be placed at the Saxonwold area on at least seven occasions including on the day before he was announced as Minister. This looks anomalous given that at the time he was a Member of Parliament based in Cape Town” (…) “Another worrying coincidence is that Minister Nene was removed after Mr Jonas advised him that he was going to be removed” (State of Capture, P:14-15).
“It appears that the Board at Eskom was improperly appointed and not in line with the spirit of the King III report on good Corporate Governance” (State of Capture, P:19).
On Eskom contracts:
“In light of the extensive financial analysis conducted, it appears that the sole purpose of awarding contracts to Tegeta to supply Arnot Power Station, was made solely for the purposes of funding Tegeta and enabling Tegeta to purchase all shares in OCH. The only entity which appears to have benefited from Eskom’s decisions with regards to OCM/OCH was Tegeta which appears to have been enabled to purchase all shares held in OCH. The favourable payment terms given to Tegeta (7 days) need to be examined further. OCM clearly had 30 day payment terms with Tegeta for the supply of coal to Arnot Power Station, and Eskom appears to have been aware of this. It also appears that Tegeta did not meet all its obligations to OCM as OCM was owed R 148,027,783.91 by Tegeta as at 31 July 2016 and an amount of R 289,842,376.00 as at 31 August 2016” (…) “The prepayment to Tegeta in the amount R659 558 079.00 (six hundred and fifty nine million five hundred and fifty eight thousand seventy nine rand) inclusive of VAT, may not be in line with the PFMA. This is evidenced in the BRP’s section 34 report in which it is stated that the prepayment was not used to fund OCM, it is further emphasised in the financial analysis which shows the prepayment was used entirely for the purposes of funding the purchase of all shares in OCH. On 11 April 2016, Tegeta informed the BRP’s and Glencore, who in turn informed the Loan Consortium that they were R600 million short, on the very same day, Eskom held an urgent Board Tender Committee meeting at 21:00 in the evening to approve the prepayment which was R659 558 079.00 (six hundred and fifty nine million five hundred and fifty eight thousand seventy nine rand and 38 cents) inclusive of VAT” (…) “Tegeta’s conduct and misrepresentations made to the public with regards to the prepayment and the actual reason for the prepayment could amount to fraud. Furthermore, the shareholders of Tegeta (Oakbay, Mabengela, Fidelity, Accurate and Elgasolve) pledged their shares to Eskom in respect of the prepayment and thus knew of the nature of the transaction” (…) “It appears that the conduct of Eskom was solely to the benefit of Tegeta, in that they forced the sale of OCH to Tegeta by stating that OCM could be sold alone. Thereafter, it appears, they have allowed Tegeta to proceed with the sale of a portion of OCH in the form of the Optimum Coal Terminal. This may constitute a contravention of section 50(2) of the PFMA in that they acted solely for the benefit of one company” (State of Capture, P: 20-21, 24).
“Optimum has for a consecutive period from 1 March 2012 to 31 May 2015 (the “Supply Period”), failed to supply and deliver to Eskom coal which meets the quality parameter contemplated by clause 3.4 of the First Addendum. The coal supplied and delivered to Eskom, amongst others, failed to comply with the sizing specifications, in that 20% to 45% of the coal supplied and delivered to Eskom by Optimum on a monthly basis, during the Supply Period, was smaller than 0.81mm. Despite this failure by Optimum, Eskom has, without prejudice to its rights in terms of clause 3.6 of the First Addendum, paid Optimum for such coal, without applying any adjustment or reduction to the payment, for Optimum’s failure to comply with the quality parameters, even though Eskom was entitled to adjust or reduce the payment accordingly.” (…) “Eskom has done a calculation of the reduction to the purchase price that Eskom was entitled to impose on the payment to Optimum for the coal supplied and delivered during the Supply Period, which failed to comply with the quality parameters in clause 3.4 of the First Addendum. The reduction Eskom is entitled to impose on the purchase price to Optimum for the Supply Period amounts to R2,176,530,611.99 (two billion one hundred seventy six million five hundred and thirty thousand six hundred and eleven rand and ninety nine cents).” (State of Capture, P: 148-149).
“We have come to learn from the Episodes, Interview and Articles that the Pre-Payment was approved by a committee of Eskom representatives at a meeting held at 21h00 on 11 April 2016. This meeting was held on the same day on which the request for the bridging finance was made to, and rejected by, the Consortium of Banks” (…) “We confirm that the Pre-Payment was not made to OCM and that OCM provides a 30-day payment term to Tegeta for the delivery of coal, on behalf of Tegeta, to the Arnot Power Station” (…) “Whilst we have delegated authority to make payments in the ordinary course of OCM’s trade and business to the management of the OCM, in terms of section 140(1)(b) of the Companies Act, the transfer of R90 000 000 does not fall within the scope of such delegation of authority and accordingly required our authorisation” (…) “However, for your benefit, we have prepared a reconciliation of the net amount (which includes the R 90 000 000 referred to aforesaid) that we believe is payable by Tegeta to OCM” (…) “In the circumstances, we are instructed to advise you that the amount of R 43 492 349 is to be transferred forthwith into the bank of account of OCM, failing which our clients may need to seek legal redress for the transfer of such amount” (State of Capture, P: 186-188).
“Oakbay/Tegeta, reiterated that they did not think they could settle the full amount. They wished to borrow a portion of the funds from the Loan Consortium. It was implied by Mr Ajay Gupta, during said meeting with the Loan Consortium, that they would find that Oakbay/Tegeta is the only party who would be capable of purchasing this entity as well as obtaining the necessary approvals from (Approvals from Department of Mineral Resource and Eskom). The Loan Consortium still maintained that they require settlement to the full amount of the loan” (…) “On 10 December 2015 the BRP’s returned to the Loan Consortium and stated that Oakbay/Tegeta had agreed to pay R2.15 billion and Glencore would pay the remaining amount for the loan” (…) “On 11th April 2016, a meeting was held between the Loan Consortium and the BRP’s. At the meeting the BRP’s informed the Loan Consortium that Tegeta informed them on the same day that they were short R600 million. The BRP’s stated that they were informed that offshore funds were no longer coming in for Tegeta and thus they were short R600 million. It was requested that the Loan Consortium either defer or loan the balance of R600 million. They also offered to cede their receivables from Arnot power station for a period of 3 months and 15 days. The Loan Consortium rejected all these offers and wanting their loan paid in full” (…) “On 14th April 2016, the Loan Consortium received the full amount of the loan which was owed to them (This means that both Tegeta and Glencore satisfied their full monetary obligations in terms of this agreement)” (State of Capture P: 264).
“An agreement was signed with Tegeta for the sale of all shares held by OCH. One of the requirements for the sale to go through was that Eskom would provide a release of the guarantee held against OCH” (…) “Tegeta asked for a concession of R600 million in terms of the purchase price of all shares in OCH. The BRP’s approached the Loan Consortium and they declined to accept a reduced amount for the loan” (…) “Mr Howa’s statements created the impression that Tegeta’s accounts were closed. However, account holder information confirms that at the time of the Tegeta deal, Tegeta held accounts with Nedbank and First National Bank. The accounts were active and were used for transaction purposes” (…) “On 04 March 2016 the Bank of Baroda issued an untitled letter to FirstRand Bank limited setting out that Tegeta was its client and that it would affect payment of R2.15 billion on certain conditions including obtaining by 30 March 2016” (…) “However, financial analysis confirms that the Bank of Baroda did not grant a loan to the value of R2.15 billion to Tegeta to purchase OCH. Tegeta raised the funds to pay the Loan Consortium from various sources. All funds were deposited via at least thirty-two (32) Electronic Funds Transfers (“EFTs”) between 09 December 2015 and 14 April 2016 into the Bank of Baroda. The Bank of Baroda then effected payment on behalf of Tegeta on 14 April 2016 into the Escrow Account held by Werksmans Incorporated” (State of Capture, P: 265, 272, 273).
Critical Connection between Gupta’s and the Companies:
“As mentioned above, there appears to be a clear line of communication between Mr Molefe, the Gupta family, and directors of Tegeta (Ms Ragavan and Mr Howa). These communications were made during a critical period and cannot be ignored” (State of Capture, P: 315).
“Further evidence of the apparent prejudice caused by Eskom, is that once the sale agreement was signed in December 2015, Tegeta appears to have easily managed to secure lucrative contracts to supply coal to Arnot Power Station with coal from OCM. This essentially increased the financial stability of OCM and decreased Tegeta’s obligations of PCF to OCM” (…) “Tegeta has entered into the sale of Optimum Coal Terminal and, according to Mr Ajay Gupta, stands to make a profit of approximately $150 million. It is unclear as to why Eskom has now allowed Tegeta to sell an asset which it previously deemed vital to subsidise OCM. Eskom had made its point clear in that OCM, Koornfontein and Optimum Coal Terminal needed to be kept together and cannot be sold separately” (State of Capture, P: 341).
Mr. Jonas meets Ajay Gupta:
“Mr Ajay Gupta informed Mr Jonas that they were going to make him Minister of Finance. Mr Jonas reported that he was shocked and irritated by the statement” (…) “Mr Ajay Gupta continued to speak. He disclosed names of “Comrades” they were working with and providing protection to. He mentioned that collectively as a family, they “made a lot of money from the State” and they wanted to increase the amount from R6 billion to R8 billion and that a bulk of their funds were held in Dubai” (…) “As Mr Jonas was walking towards the door, Mr A. Gupta made a further offer of R600 million to be deposited in an account of his choice. He asked if Mr Jonas had a bag which he could use to receive and carry R600,000 in cash immediately, which he declined” (…) “Immediately after the meeting, he informed former Minister of Finance Mr Nhlanhla Nene. I later also informed current Minister of Finance Mr Pravin Gordan and Mr Zweli Mkhize of the ANC about the offer” (State of Capture, P: 93-95).
“Having had regard to the wider allegations including the allegations that members of the Gupta family are involved in the appointment of Cabinet members, I reviewed the telephone records of Mr Van Rooyen to establish his whereabouts on 8 December 2015, the day Mr Nene was informed by President Zuma that he will be removed as Minister of Finance” (State of Capture, P: 104).
If this wasn’t interesting, the findings of the Public Protector of South Africa, than I don’t know, this shows what kind of game the Gupta Family has done together with the President Zuma, that he can be corrupted is for sure and that he doesn’t plan to respect his place and his position. Zuma has sold away and used the rich investors to gain riches and ownership into businesses that deals with Government Corporations that even steadily create wealth for the ones that deliver services back it. Like Eskom needs Coal to their Power Plants and that has been sold from companies that are even connected with Gupta, that are complied with the internal connection in Eskom and the reasoning for selling it and also opening up questionable transactions. That has been showed. So the Oakbay, Optimum, Tegeta are parts of the ownership of Gupta family and even some has ownership by the Zuma family. So the connections between that and the ability to appoint Eskom board, show the problems of the Executive taking too much power.
Also the questionable hiring and firing the Finance Minister in December 2015; that is clearer, but still the Executive and President Zuma have questions to ask as he has failed to deliver any sort of explanation, even to the Public Protector as they just got shuffled away like bad fish. Just let this entire report sink in! Peace.
South Africa Public Protector – ‘State of Capture’ Report No. 6 of 2016/17
The big story over the weekend by City Press revolved around the alleged Eskom untoward “bail out” of the Gupta business.
JOHANNESBURG, South Africa, June 14, 2016 – The Gupta family has now been cleared by over four entities of any wrong doing but you wouldn’t know this from the media reports. The big story over the weekend by City Press revolved around the alleged Eskom untoward “bail out” of the Gupta business. But Eskom has issued two detailed statements which clears the Gupta family business more specifically Tegeta which is one of the coal suppliers to Eskom. The Eskom statements come at the backdrop of the Gupta family also being cleared by the ANC NEC investigation which followed the alleged “state capture” by the family. It must be remembered that when the long term auditors of the family KPMG stopped its association with the family business it made it clear that there was nothing wrong with the books of the Guptas, an assertion which was confirmed by the new auditors who undertook their own independent “due diligence” on the state of the finances of the business. As if that is not enough, even the South African Reserve Bank (SARB) has come out and denied that there is any investigation against the Guptas. These facts make a fair reader to ask; why is the media spreading lies?
The stories by both city press and Sunday times are devoid of any factual truth, are malicious and possibly illegal as well. City Press was given clarifications by Eskom which showed that their story had no basis in fact. But they ignored all that and continued to publish lies and fabrications. City Press essentially alleges that the Tegeta was given preferential treatment on the Arnot deal to offset the losses on the Hendrina deal. The readers not familiar with the Eskom deal might know that once Guptas bought the Swiss company known as Optimum Coal, they continued to supply coal at R150 a ton as opposed the R530 demanded by the Swiss company under threat of unleashing load shedding. That is the Hendrina deal which continues until 2018. What happened in between is that Eskom needed more supplies for the Arnot power station, and the request was opened to other suppliers which included Tegeta. The quality of the coal is different from that which is required by the Hendrina station. Eskom explained in its statements that, the quality of the coal for this station is “export grade”.
City Press chose to lie openly when it says, coal was ferried from 50km away to offset the loss making of Optimum Coal deal. Eskom clarified to city press in a statement that, “The Optimum Coal Mine provides two coal qualities to Eskom. The Optimum – Hendrina supply is a blended product of run-of-mine and washed product. This is supplied under the existing Optimum-Hendrina contract that expires in 2018.” Eskom was explicit that; “The second product from Optimum from their export mining compound. It is a higher quality coal and this is supplied to Arnot under the current short term agreement”.
City Press deliberately omitted the distinction between the coal supplied on Hendrina and the one supplied to Arnot. Furthermore, City Press deliberately misinformed its readers by not disclosing that Tegeta was one of the seven suppliers for the short term contract named by Eskom. This shows that City Press has an agenda specifically against Tegeta because it’s partly owned by the Guptas. Eskom on Saturday issued a statement which made it clear that; “Eskom firmly rejects the suggestion that Tegeta was favoured or that due process was not followed”. But City Press is not interested in the truth it’s only interested in the agenda to kick the Guptas out of the coal sector because white owned companies now feel the heat of competition.
The racism of City Press report comes with how it does not believe that a black owned company can do better than a white owned business. White media asks how Tegeta can turn around a loss making company which whites had given up on. Instead of recognising Tegeta for business skills and innovation they cast aspersion suggesting wrong doing. “If whites can’t do it, blacks can’t do it either” is the philosophy behind City Press report supported by Sunday Times. Furthermore, City Press and Sunday Times in their campaign to destroy the Gupta family, failed to inform their readers that Eskom has declared that the deal with the Guptas has saved it R1 billion in mere 8 months. This is a big positive story, when Eskom saves money it means South Africans benefit. But such truth comes in the way of the agenda of the media.
The media is also silent about how Eskom explains how Tegeta has stepped in when there was a crisis at the Hendrina power station and has saved thousands of jobs. City Press furthermore, withheld information to its readers which would have shown that in fact the deal they claim is bad, comes at much lower price for Eskom than the deal before which was under the white owned Exxaro which sold R1 132 per ton as against the average of R500 by Tegeta. That is half the price the white companies use to demand, but such facts don’t support the campaign and are therefore suppressed.
The Gupta business tired of distortions and has called on all the media houses to a live debate on their stories. None are willing to do so because a live debate doesn’t allow for distortions. Oakbay Investments CEO Nazeem Howa has thrown the gauntlet and till date only Media24 has accepted the challenge to a live debate and the result is quite revealing on how the media is doing the bidding for white owned companies who are feeling the heat of the competitive edge of the Gupta owned companies. In the media 24 live interview, the public gets to learn a lot about selective reporting and the revelations that the media has ignored the Eskom own statement and the SARB. It would come as a big surprise to many readers to know that actually, Oakbay only supplies about 5% of the coal to Eskom. The other about 80% is supplied by white owned companies who are not being hounded by the media. http://m.fin24.com/fin24/Economy/exclusive-oakbay-ceo-speaks-out-on-coal-and-cash-reports-video-20160612
The media needs to be asked as to why it is not interested in the 80% coal suppliers of Eskom. The reason is patent to all fair people. The troubles of the Oakbay started when they out smarted the Swiss giant Glencore and bought their ailing company which was trying to blackmail Eskom by withdrawing its coal with the hope of hitting South Africa with another outage and then to be able to name the price it wants to sell coal to Eskom which would have been outside the agreement it had. It was the foresight and courage of the Eskom CEO Brian Molefe who stopped the whole scheme and quickly put the Swiss giant on a back footing and was forced to sell their business called Optimal Coal to the Guptas. This has infuriated white business and had led to the political attack sponsored by white capital and the Gupta must go campaign on the one hand and on the other the same white monopoly capital in competition with the Guptas has pressured the banks to close the accounts of the Gupta business. The media is not interested in the linkages including the serious impact on the 7500 workers and their families which comes to affecting over 50 000 people!
The renewed media attack on Oakbay seem to be linked with the realization that the Guptas are turning around the loss making Optimum Coal. A few months ago the business was on its dead bed but today has been removed from the ICU to the bitterness of white monopoly capital. This means Oakbay is establishing itself in the coal sector which is currently dominated by white owned companies. What is even more intriguing is that one of the companies which are major players in coal are those associated with Johann Rupert. Together with the companies linked to the Deputy President Cyril Ramaphosa who is personal friend of Rupert their companies have respectively milked over R8 billion from Eskom. Clearly Rupert and Ramaphosa are concerned that their milking cow is now doing business with companies which are not linked to white monopoly capital.
Given the lies written by the media against black companies and businesses it makes sense that government should without any further delay institute a media tribunal and criminalize lies and slander by the media. The South African media is no longer held accountable by media ethics, it has become peddlers of lies and distortion for narrow racist ends.