DA to lay charges against ANC's Chancellor House over Hitachi

2015-09-29 11:04
(File: ANC)

(File: ANC)

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Johannesburg - The Democratic Alliance will lay criminal charges against the ANC's business front, Chancellor House, after reports surfaced that Hitachi made improper payments to the governing party.

Hitachi is the company that won the tender to provide Eskom with boilers for the Medupi and Kusile power stations.

"It is deplorable that yet another ANC corruption scandal has negatively affected millions of South Africans as our load-shedding crisis has been hampered by delay after delay at Medupi and Kusile - costing our economy millions of rands," DA leader Mmusi Maimane said in a statement.

He said he would write to Public Protector Thuli Madonsela asking that her office investigate.

The ANC has not been available for comment.

The US Securities and Exchange Commission announced on Monday that it had charged the Tokyo-based conglomerate with violating the Foreign Corrupt Practices Act.

It claimed that Hitachi Ltd had "inaccurately recorded improper payments" to the ANC in connection with contracts to build two multibillion-dollar power plants.

Other legitimate payments

Hitachi was aware that Chancellor House was a funding vehicle for the ANC.

The commission's complaint was filed in the US District Court for the District of Columbia.

According to the complaint Hitachi, without admitting or denying the allegations, agreed to a settlement and paid a $19m penalty.

The settlement was subject to court approval.

"Hitachi’s lax internal control environment enabled its subsidiary to pay millions of dollars to a politically connected front company for the ANC to win contracts with the South African government," director of the commission's enforcement division Andrew J Ceresney said in a statement.

"Hitachi then unlawfully mischaracterised those payments in its books and records as consulting fees and other legitimate payments."

The US Justice Department's fraud section, the Federal Bureau of Investigation, the Integrity and Anti-Corruption Department of the African Development Bank and the South African Financial Services Board assisted the commission during the investigation.

The commission alleged that Hitachi sold its 25% stake in a South African subsidiary to a company serving as a front for the ANC.

Proper documentation

Through this arrangement the front company and the ANC were able to share profits from any power station contracts Hitachi had secured.

Hitachi was awarded the contracts for the Medupi and Kusile power stations and allegedly paid the ANC's front company around $5m in "dividends" based on profits derived from the contracts.

According to the commission, Hitachi, through a separate, undisclosed arrangement, paid the front company another $1m in what was called success fees.

This was inaccurately booked as consulting fees without proper documentation.

Maimane claimed this amounted to prima facie evidence of corruption which saw the ANC benefit.

"The DA will ensure that those implicated at Chancellor House are investigated, prosecuted and, if found guilty, jailed," he said.

Read more on:    da  |  anc  |  thuli madonsela  |  mmusi maimane

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