State Capture report: Politicians’ power to appoint SOE directors must be diluted – Zondo

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The Judicial Commission of Inquiry into Allegations of State Capture heard evidence on the capture of the country’s SOEs such as Eskom, Transnet, SAA and Denel. Photo: Getty Images
The Judicial Commission of Inquiry into Allegations of State Capture heard evidence on the capture of the country’s SOEs such as Eskom, Transnet, SAA and Denel. Photo: Getty Images

NEWS


The Gupta family managed to capture state-owned enterprises (SOEs) only because their directors and executives lacked integrity, even if, in some instances, they had the right knowledge, skills and experience for their positions.

The Judicial Commission of Inquiry into Allegations of State Capture heard evidence on the capture of the country’s SOEs such as Eskom, Transnet, SAA and Denel.

“Integrity is very important for people who get appointed to these positions because, if you appoint people who have no integrity, knowledge, skills and experience, you end up with what South Africa has ended up with in terms of the capture of those SOEs and the aftermath thereof. I referred to parts I, II and IV of this commission’s report because it is in those parts that this commission has dealt with the evidence of the capture of SOEs,” said commission chairperson Chief Justice Raymond Zondo in his latest report, which was handed over to President Cyril Ramaphosa on Wednesday night.

Zondo said it was not only for the SOEs that the commission heard evidence revealing a lack of integrity by board members, CEOs and chief financial officers (CFOs). He cited the department of correctional services and the SA Revenue Service (Sars) as examples.

READ: Zondo: Guptas used pawns to milk SOEs

“The commission also heard such evidence in respect of the department of correctional services, where senior leaders in the department had effectively been captured by Bosasa to the extent that, when there was a tender to be issued to the public, they would not only inform Bosasa ahead of the public notice, but would actually ask Bosasa to prepare the specifications for the job and, of course, Bosasa would draw the specifications in such a way that only it could win the tender.”

Bosasa provided security services and catering at correctional facilities and is rather infamous for using its connections to prominent politicians and government officials to benefit from tenders valued at R2.37 billion, after allegedly paying bribes worth about R75.7 million. Bosasa also rendered services at SOEs such as the SA Post Office and Airports Company SA.

READ: Zondo report: The charge sheet against Zuma grows

Zondo said:

There was also Sars, which was led by Mr Tom Moyane, who got captured by Bain & Company [a US management consultancy] even before he set foot in Sars and allowed Bain, after he had joined Sars, to basically run the show there.

“The evidence has revealed that Mr Tom Moyane had no integrity, nor did he have the right qualifications, skills and experience for the job. He was identified by president Zuma for appointment as a Sars commissioner long before time,” added Zondo.

Bain & Company benefited from R167 million in fees from Sars over 27 months.

Zondo mentioned that what had been common about all the chairpersons, CEOs and CFOs of the boards of SOEs, and Moyane was the fact that they were all appointed by politicians.

“This suggests that the politicians – ministers – have not shown themselves to be able to pick people of integrity and people with the knowledge, expertise and experience necessary to lead these very important SOEs. We cannot continue doing things the same way they have been done over a long period with the consequences that the country has suffered in terms of SOEs.”

He added that the role of politicians must be seriously diluted so as to allow other people to influence the kind of leaders of SOEs.

“Apart from who makes the appointment, it is also necessary to make sure that the appointment processes are transparent and open to the public.”


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