Judicial inquiry to probe red flags in incomplete state capture report

 Ajay and Atul Gupta, Picture: Muntu vilakazi
Ajay and Atul Gupta, Picture: Muntu vilakazi

President Jacob Zuma must appoint a judicial inquiry within 30 days to investigate allegations of state capture as indicated by Thuli Madonsela in her State of Capture report.

This is the remedial action called for by the former Public Protector in the 355-page document released this afternoon.

While the report does not make any adverse findings it does raise a number of red flags. Madonsela writes that her office did not have the capacity to complete the job, which was the reason for the determination that there be a judicial inquiry.

Judge Dunstan Mlambo ruled yesterday that the much-anticipated report must be released and placed on the Public Protector’s website by 5pm.

This came after Zuma’s legal representative advocate Anthea Platt told the full bench of judges – at the North Gauteng High Court – that she was instructed to withdraw and tender costs.

The Democratic Alliance, Economic Freedom Fighters, Congress of the People and United Democratic movement called on the president to be held personally liable for all legal costs, including that of the state attorney. Mlambo called for the parties to make submissions in that regard and reserved his judgment.

The judicial inquiry is to be headed by a judge appointed by Chief Justice Mogoeng Mogoeng.

The remedial action came after a watershed judgment earlier this year in which the Constitutional Court ruled that findings by the Public Protector’s office – a chapter 9 institution – were legally binding.

“The judge is to be given power to appoint his/her own staff and to investigate all the issues using the record of this investigation and the report as a starting point,” the report said.

“The commission of inquiry to complete its task and to present the report with findings and recommendations to the president within 180 days.”

Ministers who could have potentially been implicated include: Des van Rooyen (cooperative governance and traditional affairs), Mosebenzi Zwane (mineral resources) and Lynne Brown (public enterprises).

As reported earlier this week, the report states that Van Rooyen was placed at the Gupta home seven times, including on the day he was announced as minister of finance.

There are also damning observations surrounding Eskom’s relationship with the Gupta family.

A trip to Switzerland by Zwane could have had undue influence in the decision to give business to the Gupta family by way of their acquisition of the Optimum coal mine through their company, Tegeta.

The report flags how Eskom might have deliberately forced Optimum Coal Mine into business rescue and financial distress to position the Guptas into buying the mine.

Glencore put Optimum mine and its holding company, Optimum Coal Holdings, into business rescue because it was no longer viable to export coal at current prices and the mine was tied into a loss-making contract to supply Eskom.

It was losing about R5 million a day

“Eskom may have through numerous methods caused prejudiced to Glencore. Glencore appears to have been severely prejudiced by Eskom’s actions in refusing to sign a new agreement with them for the supply of coal to Hendrina Power Station. This was not in line with previous discussions held by Glencore with Eskom,” read the report.

“It appears that the conduct of Eskom, was solely for the purposes of forcing Optimum Coal Mine/Optimum Coal Holdings into business rescue and financial distress.”

This came after widespread speculation that political influence helped the Guptas to secure Optimum because of their friendship with President Jacob Zuma. Madonsela had in the report pointed out that Zwane may have flouted the Constitution and the Executive Members Ethics Act with a flight to Zurich, which he has repeatedly denied was designed to persuade Glencore to sell the Optimum coal mine.

Another observation by Madonsela was that Zuma potentially violated the Executive Ethics Code by allowing members of the Gupta family and his son, Duduzane Zuma, to be involved in the process of removal and appointment of the minister of finance in December 2015.

“Zuma and the executive failed to take action to verify [former ANC member of Parliament Vytjie] Mentor’s allegations, as well as [former government spokesperson Themba] Maseko’s allegations, as well as regarding the alleged cosy relationship between [Eskom chief executive] Brian Molefe and the Gupta owned companies.”

Meanwhile, cellphone tracking records indicate that Molefe was at or near the Gupta home in Saxonwold at least 19 times between August 5 and November 17 2015.

Ajay Gupta is said to have made at least 14 calls to Molefe, and Molefe called Gupta 44 times.

Copies of the report have also been sent to the heads of the Hawks and National Prosecuting Authority, with the report citing possible criminal elements.

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