From Zuma legal fees to money laundering: Paul Holden's evidence at Zondo Commission

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Researcher employed by Shadow World Investigations, London, Paul Holden testifies at Zondo Commission on Tuesday.
Researcher employed by Shadow World Investigations, London, Paul Holden testifies at Zondo Commission on Tuesday.
Gallo Images/Sharon Seretlo
  • More than R57 billion was spent by organs of state on contracts tainted by state capture. 
  • Paul Holden returned to the Zondo Commission to give evidence of money flow. 
  • Holden previously said the state spent R49 billion on "tainted" contracts, but has now re-calculated the figures. 

The state spent over R57 billion on state capture contracts involving the Gupta enterprise.  

Paul Holden, the director of investigations at Shadow World Investigations, returned to the State Capture Inquiry on Tuesday to give money flow-related evidence.

He compiled a report, which analysed thousands of bank statements, and detailed alleged money laundering linked to state capture corruption.

Holden, who previously said over R49 billion was spent on "tainted" contracts, made adjustments to the figure after a number of organs of state approached the commission, following his appearance in May, indicating that the payments he identified were incomplete, he said. 

READ | Over R49bn spent on contracts 'tainted by state capture', Zondo Commission hears

"… that I, unfortunately, undercounted ... such as the figures supplied for McKinsey were supplied without VAT included," he said.  

Holden said he was also contacted by the Organisation Undoing Tax Abuse's (OUTA) Rudi Heyneke, who identified three payments made to Regiments that did not reflect in his original report.   

Holden said, of the R57 billion, the Guptas earned R16 217 793 047.18, all of which was drawn from state funds and kickbacks related to state capture.

Holden earlier told the commission the Gupta enterprise used pre-existing and independent criminal networks to launder funds abroad.  

For a number of years, Holden said the Gupta enterprise made use of vehicles, which received payments from contractors to the state, in contracts tainted by state capture.

READ | Ramaphosa's Zondo appearance postponed

"The contractors to the state would make multiple of many payments to first level laundry entities that were designated by the Gupta enterprise," he said.

He also described the four laundry networks identified in his report, saying the laundries were "incredibly complicated", but there was a certain pattern to how they operated.

At the very top level, Holden said there was a first-level "laundry vehicle" entity that received funds from state contractors.

He said the funds were paid into an intermediary account or high-level laundry vehicle.

He said:

The funds are then paid into that intermediary account from multiple different first level laundry entities and then sent onwards in the money laundering network. Generally speaking, the funds are either sent on to a second further party, who aggregates the funds and then makes those transfers onwards again.
  

Holden added: "Combined private investigations is a firm we have identified in the report as receiving quite a large amount of state contracts from different sources, providing, among other things, security services. It made quite substantial payments to a first level laundry network."

Paid

During his testimony, Holden also told the commission that, in April 2014, more than R4 million was paid to Hulley and Associates. 

The money was apparently paid from one of the accounts that received funds from a high level laundry entity, linked to the Gupta enterprise.

Michael Hulley.

Holden then went through invoices from Zuma's late advocate, Kemp J Kemp, which were addressed to Zuma's former attorney, Michael Hulley.

Holden said the invoices were in relation to a matter, in which the Democratic Alliance wanted to review and set aside the decision by the National Director of Public Prosecutions not to pursue the arms deal matter.

"What we see from the statements is that, of the R200 000 that is paid in relation to Kemp J Kemp from Hulley and Associates, of that amount R60 676.37 was in payment of Kemp's services in representing [former] president Jacob Zuma in that particular matter," he said.

In 2018, former NPA boss, Shaun Abrahams, reinstated corruption charges against Zuma.

The matter is currently before the KwaZulu-Natal High Court Pietermaritzburg.  

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