Before and after being fired as finance minister, Pravin Gordhan urged South Africans to ‘connect the dots’ when it came to state capture. In the case of SOEs, a clear pattern was unfolding: President Jacob Zuma fires a minister. He appoints a new minister. The new minister appoints a new board of directors, who open the doors of opportunity for the Gupta/Zuma empire. And so it continues.
The capture of the SOEs by the Gupta family and their associates (including Duduzane Zuma) happened with Zuma Snr as the ultimate enabler. Between them, South African Airways (SAA), Transnet, Denel and Eskom have spent hundreds of billions of rands over the past decade to upgrade South Africa’s core infrastructure and services. The state-owned sector was the place to be if you wanted to become very, very rich. Adriaan Basson and Pieter du Toit attempt to connect the dots.
Visit News24 Voices for informed and expert opinions on the news
Dot 1: In June 2010, Zuma went on a state visit to India. He was accompanied by a number of ministers, including then public enterprises minister Barbara Hogan, a struggle-era veteran and former minister of health. Also in Zuma’s delegation were various businesspeople, including Ajay and Rajesh Gupta, and their business partner Duduzane Zuma. The Department of Public Enterprises oversees the country’s SOEs and appoints the boards of these entities. The boards appoint the CEOs, who, in turn, appoint senior staff and oversee the awarding of tenders and contracts worth billions of rands, often with the involvement of board members. For those with ambitions to capture the state, gaining control over the Department of Public Enterprises is essential.
In an interview with Thuli Madonsela in August 2016, Hogan recalled what had happened on the June 2010 trip to India. She noticed that the Guptas had ‘taken control’ of the president’s programme. Hogan found it peculiar that the CEO of the Indian airline Jet Airways wanted to meet with her on several occasions. When she asked then SAA board chairperson Cheryl Carolus about rumours that SAA would drop its Mumbai route, Carolus confirmed to her that Jet Airways had been lobbying SAA unsuccessfully to let go of the profitable Mumbai route. In August 2010, during a joint South Africa/India meeting, rumours were circulating that Hogan would be sacked. On 31 October 2010, during a meeting with Zuma, the president dismissed her as minister.
Shortly before the India trip, Jet Airways introduced its first direct flight between Mumbai and Johannesburg – a route already covered by SAA.
Dot 2: In October 2010, colourful ANC MP Mabel Petronella ‘Vytjie’ Mentor went to Johannesburg to see Zuma after she had asked for a meeting with him to express her unhappiness with the closure of the Pebble Bed Modular Reactor company. Mentor was the chair of Parliament’s Portfolio Committee on Public Enterprises. (*She had organised the meeting through Zuma’s chief advisor, Lakela Kaunda, who would later admit having received money from a Gupta-linked company while working for the ANC.)
*Kaunda denies organising the meeting between Mentor and the Guptas and is currently engaging the Zondo Commission about this matter. She has submitted her phone records that, according to her, shows she never organised the meeting.
In a statement to the police, Mentor told how she had been fetched from the airport by two men dressed in black wearing dark glasses and ear-pieces. She had expected to be driven to the Union Buildings for her meeting with Zuma, but was instead taken to the Gupta businesses’ office park in Midrand. The bodyguards asked her to step inside to greet someone. Inside was Ajay Gupta. He asked her about her family and offered Mentor access to his suite at Newlands cricket ground, adding that she could take her son there, who happened to play cricket for Western Province. Gupta told Mentor that it was a ‘privilege for him’ to meet her, she said. ‘He knew what my position was and also knew that I had an appointment with the President.’ Mentor said she became ‘agitated and irritated’ by Ajay Gupta, who told her Zuma wasn’t yet available to meet her because he had to attend an appointment at Luthuli House. She found it ‘very strange’ that Gupta knew about her meeting with Zuma and the president’s whereabouts.
Mentor was then escorted to the Gupta mansion in Saxonwold. ‘I was served with chai tea with naan bread and curry. By then I was upset and not feeling well, therefore I didn’t enjoy the food.’ Ajay Gupta, she claims, later arrived and told her he was very close to the Indian government and could help Denel with its legal problems in that country. He asked if she would leverage her position of influence to get SAA to stop flying the Johannesburg to Mumbai route. ‘You could be a Minister of Public Enterprises in a week’s time when the President […] reshuffles cabinet and removes the current minister of public enterprises [Barbara Hogan],’ Gupta told her.
Mentor asked Gupta how he could do that. He responded to the effect that he would put in a word with the president to have her appointed. ‘I was doubtful and he could see it,’ said Mentor. ‘So he said that they have done it previously, I must just play along, meaning I must agree to influence SAA to stop the route.’ According to her statement, Mentor then got ‘very angry’ and in a ‘loud voice’ asked to be taken back to the airport. Then, like something out of a movie scene, Zuma entered the room.
Mentor stood up and angrily explained to the president the exchange that had just taken place, telling Zuma how Gupta said that he would ‘put in a word with the president’, so that she would become minister. Zuma, she said, told her to ‘calm down and not to worry’; she said that he ‘never reprimanded’ Gupta.
In her interview with Madonsela, Mentor said Zuma wasn’t angry that she declined the offer. ‘He apparently said to her in Zulu, something like “it’s okay Ntombazane (girl) … take care of yourself”.’ In her police statement, Mentor said that Zuma didn’t seem surprised by what Ajay Gupta had told her but that she had been made to look like ‘the mad one’. ‘The President didn’t even have a meeting with me,’ said Mentor. ‘He walked me out of the house to the vehicle. … I asked the President why he meets with these people and in that house. He said that his son is staying next door. He also said that he was sorry.’
Shortly after being offered the position of minister in exchange for culling SAA’s Mumbai route, Mentor made an appointment with then SAA CEO, Siza Mzimela. She asked her how long it would take to cultivate an international airline route. In her statement she continued:
She said that the first four years capital [is] invested … from the fifth year up till the ninth/tenth year you break even, and only making profit thereafter. Then I told her that someone approached me to influence SAA to close the route between India and SA. She said it was [SAA’s] main and most profitable route and that it would not make economic sense to close that route. Then it made sense to me.
After turning down their offer, Mentor never heard from Zuma or the Guptas again.
Dot 3: Later that week, Zuma fired Hogan and replaced her with Malusi Gigaba as Minister of Public Enterprises.
On 8 May 2012, SAA announced it would be adding additional flights to its Johannesburg-Mumbai route following ‘increased demand’ on this popular route: ‘The airline hopes to be adding even further flights on this route in the near future as travel between South Africa and India has recently shown noticeable growth.’
Five months later, Carolus and seven SAA board members stepped down after a breakdown in their relationship with government, represented by Gigaba and the Department of Public Enterprises. Two weeks later, they were followed by Mzimela and two general managers.
Dot 4: In January 2013, the chair of the Jacob G Zuma Foundation and very close personal friend of the president, Dudu Myeni, was appointed chair of the SAA board.
Dot 5: In April 2013, SAA and Jet Airways announced a code-sharing agreement whereby SAA passengers would code share on Jet Airways’ operations between Mumbai and Delhi, Bangalore, Hyderabad, Chennai and Thiruvananthapuram. In turn, Jet Airways would code share on SAA’s flights between Johannesburg, Cape Town and Durban. In the same media statement, SAA confirmed the steady increase in tourists from India to South Africa. ‘In essence, we are truly bringing the world to Africa,’ Manoj Papa, SAA’s acting general manager for commercial, was quoted as saying.
Dot 6: Two weeks later, a Jet Airways chartered Airbus A330 didn’t bring the whole world to Africa, but landed with 200 Indian guests who had come to South Africa at Waterkloof Air Force Base to attend the Gupta family wedding at Sun City. After the scandal broke, Jet Airways was fined $8 800 for landing at a military airbase without permission. By now, the close link between Jet Airways and the Guptas was there for all to see.
Dot 7: In early 2015, SAA announced that after 20 years it would cut the Johannesburg-Mumbai route owing to financial losses. From being the ‘most profitable’ flight for SAA five years before and adding more flights to the route in 2012, the airline, now under the management of Myeni and her confidant, acting CEO Nico Bezuidenhout, started reporting from 2014 that the Indian route was making a loss. At the time that SAA shut down the route, a travel industry official was quoted as saying flights on this route were between 82% and 88% full. In a statement announcing the end of its direct flights to India, SAA praised the fact that passengers would now be able to travel to more cities on the sub-continent through code-sharing agreements with Jet Airways and Etihad (which owned 24% of Jet Airways).
Whether the true reason behind the closure of SAA’s Johannesburg to Mumbai route was financial losses or not, the fact remains that less than five years after Ajay Gupta allegedly offered Vytjie Mentor a ministerial post in exchange for dropping SAA’s Indian route – while Jacob Zuma was in the house – his wishes came true. The Guptas have denied ever meeting Mentor or offering her a ministerial position.
* This is an extract taken from Enemy of the People, by Adriaan Basson & Pieter du Toit, published by Jonathan Ball Publishers (R260).