..NPA is now expected to arrested them at any time
After four years, 400 days of hearings, and over 300 witnesses, the State Capture Inquiry has found that there was state capture.
- More than 1 400 individuals were implicated in evidence before the Zondo Commission.
- Prosecutors face a mammoth task to piece together cogent cases in instances where the wrongdoing spans years and complex legislation.
- There are several cases for clear cut violations of the Public Finance Management Act and the common law offence of perjury that would not take immense resources to bring to court.
The first part of the Zondo Commission’s report recommended and identified at least nine offences on which the National Prosecuting Authority can move quickly – and civil society leaders say an increasingly impatient country need to see action soon.
Acting Chief Justice Raymond Zondo makes recommendations for further probes and prosecution against numerous individuals, but nine cases stand out, because the evidence against the implicated individuals is readily available.
The commission heard evidence over more than 400 days, and roughly 1 400 individuals were implicated – which will all be set out in parts two and three of his report, due to be handed over at the end of January and February.
They are numerous cases of violations of the Public Finance Management Act (PFMA) by former officials and board members of state-owned companies, perjury for lying to Parliament and for being dishonest before the Zondo Commission and in one case, a violation of the Commissions Act by former South African Airways AA chairperson and Zuma Foundation chair Dudu Myeni, for revealing the identity of a witness.
“Broadly, I would agree with that, but ultimately the constitutional responsibility in deciding whether or not to institute a prosecution lies with the NPA,” said Lawson Naidoo, executive director for the Council of the Advancement of the South African Constitution (Casac).
“We need prosecutions, but we can’t afford bad prosecutions that result in acquittals – I think that would be perhaps even more damaging to the morale of this country,” said the executive director for the Helen Suzman Foundation, Nicole Fritz.
“[Focus should] not just be on the theft and personal enrichment, but the actual destruction of state capacity, in that the state institutions which were world class, were incapacitated, were destroyed so that they couldn’t perform those functions. I think it is absolutely essential that we see real consequences for that and that prosecutions are brought,” she added.
“But I don’t think that bad prosecutions would achieve anything but convince South Africans that the state isn’t serious about ensuring that there is the proper accountability for this utter destruction.”
The nine cases identified are: (Note – This list is not exhaustive and does not include public servants who may have committed offences after capitulating to pressure or threats from their superiors to do so, particularly if they cooperated with the Zondo Commission. Zondo also does not recommend charges against these individuals)
Dudu Myeni – Contravening the Commissions Act for naming witness “Mr X” Dudu Myeni, former chairperson of SAA.
Myeni, in her capacity as board chair, oversaw the decline of SAA to the point that Zondo said the airline was reduced to an “an entity racked by corruption and fraud”. She was implicated by a raft of witnesses who detailed sweeping graft under her purview, with recommendations that she be probed on corruption charges.
But the low hanging fruit in getting her to court is a charge – already laid – for contravening the commissions act. Myeni, despite being warned by Zondo, revealed the identity of a witness dubbed “Mr X”.
The witness had detailed how he had been a conduit for funds bled from Free State provincial coffers, cash which was channeled to Myeni as well as the Jacob Zuma foundation.
“Myeni disclosed the identity of a witness in respect of whom I had made a clear ruling that his identity should not be revealed because of concerns for his and his family’s safety and security…this matter needs to be brought to finality by the law enforcement agencies and the National Prosecuting Authority,” the report reads.
Eskom: Collin Matjila – PFMA violationsCollin Matjila.
For signing a R43-million contract committing Eskom to sponsor more than 30 TNA Business Breakfasts, Matjila could see a five-year prison term or a fine for violating Section 86 (2) of the Public Finance Management Act.
86 (2) provides that an accounting authority, being a board or an individual, can face these sanctions if they are found to have wilfully or in a grossly negligent way fail to comply with sections of the PFMA that call for these accounting authorities to prevent wasteful and fruitless expenditure. The Zondo Commission found that Eskom derived no benefit from the TNA business breakfasts, and that Matjila had no authority to sign the contract.
“Given Mr Collin Matjila’s role in the conclusion of the contracts… between Eskom and TNA, particularly his misrepresentation that one or more was a partnership or were partnerships when they were sponsorships, it is recommended that the law enforcement agencies conduct such further investigation as may be necessary with a view to the possible prosecution of Mr Collin Matjila by the NPA for fraud and/or contravention of the PFMA,” Zondo found.
In Matjila’s case an audit report found in 2014 that he had acted outside his delegation of authority, and it would not require an intensive investigation to bring the matter to court.
Eskom: Zola Tsotsi – PFMA Violation Former Eskom board chair Zola Tsotsi.
Tsotsi, who was the board chairperson of Eskom, can be hauled before court on PFMA violations, in failing to exercise his fiduciary duty to Eskom on the R43m contract with TNA that was unlawfully signed by Matjila. Tsotsi, as one of only three board members who survived a purge in late 2014, failed dismally to appraise the new board of all the facts he had at his disposal when the new board, via round robin, ratified the contract in early 2015.
The round robin resolution was circulated on 3 February 2015. The document contained a “summary of facts”.
“Despite Tsotsi having signed the document to confirm that its contents were correct, he admitted during his testimony that he did not in fact read the document and he now accepted that there were errors in it,” the Zondo report reads.
“Tsotsi admitted that, even though he realised there were errors in the document, he did not go back to the Board members after they had cast their votes to alert them to these errors.
He said he was going to explain the errors at the next Board meeting of 19 March 2015 but the minutes of that meeting do not reflect that this was discussed.”
The report finds that even if Tsotsi did not wilfully attempt to influence the ratification of the contract, he acted at best “negligently and in contravention of his fiduciary duties and his legal duties” as a member of the board.
“This negligence facilitated wasteful expenditure and the siphoning of public funds from an already overburdened public body,” the report reads.
“Tsotsi’s conduct in ratifying this contract and in failing to ensure that the new board was made fully aware of all the facts about this contract and what the previous board – of which he was the chairperson – had said about this contract can only lead to the conclusion that he was either advancing the agenda of the Guptas or was so incompetent that he should never have been a director of a company, not to speak of being Chairperson of Eskom. It is incomprehensible how he could have acted in the manner he did unless the situation was one of the two,” Zondo notes.
The Eskom board of early 2015 – PFMA Violations
Similarly, Zondo recommends that an investigation be undertaken into the rest of the board that had ratified the Matjila/TNA contract by round robin in early 2015. Venette Klein confirmed to the commission that she had voted against the resolution, however the others did not.
Zondo notes that information was kept from the board, but its members should have noticed that the submission in support of the resolution was itself defective and contained vague information that should have been questioned.
The other members of the board at the time were, in addition to Tsotsi and Klein, Chwayita Mabude (reappointed), Norman Baloyi, Dr Pathmanathan Naidoo, Nazia Carrim, Romeo Khumalo, Mark Pamensky, Zethembe Khoza, Ben Ngubane and Viroshini Naidoo.
Dr Naidoo said he had considered the “impact the TNA contract had for the company’s interim results” which could not conceivably have been determined with any degree of certainty.
Viroshini Naidoo informed the commission their decision had been based on a hastily prepared legal opinion obtained by the previous board. Zondo recommends an investigation into the remaining board members.
Eskom: Mark Pamensky – PFMA violation Mark Pamensky.
While Zondo recommended futher investigation, prosecutors could consider Pamensky’s evidence before Zondo as potentially damning in the furtherance of his conviction for violating the PFMA. With regard to the same round robin resolution ratifying the R43 million contract with TNA:
“[Pamensky] accepted that, if the Board knew everything that Mr Pamensky knew now, the ratification of the contract with TNA would have constituted wasteful expenditure,” the Zondo report reads.
“Mr Pamensky certainly cannot be accountable for what he did not know unless his ignorance was as a result of him not taking reasonable steps to inform himself about matters. However, he and his fellow Board members were accountable for what they did know and the decisions they took based on what was placed before them,” Zondo continues.
Zondo found that from a proper consideration of the round robin, it should have been apparent to any reasonable person that the summary of facts made little sense and was ambiguous. The contract itself was also not included.
The report said:Nobody who sits on a board of a company and knows what they are doing can ratify a contract that he or she has not seen or read unless he or she does not care about the interests of the company or seeks to achieve someone else’s agenda.
It fell to the board, under the PFMA, to prevent wasteful and fruitless expenditure.
“Strangely, however, Mr Pamensky testified that he only became familiar with the PFMA about six months after he had been appointed as a member of the Eskom Board…he later claimed that a board member could only be expected to understand their full obligations under the PFMA after about 3 to 4 years of serving on the board.”
Zondo did not buy this.
“Quite clearly, this is a self-serving and preposterous claim. Board members are individually liable under the PFMA for performing their functions and keeping other officials and delegates accountable for the performance of their duties. They are given no grace period for doing so. Failure to do so would necessarily amount to negligence or even gross negligence.”
Transnet: Brian Molefe – PFMA Violation Brian Molefe.
Long before Molefe arrived at Eskom, where the Gupta state capture project would have graver consequences still, he was the chief executive officer of Transnet. While there, Molefe signed at least four contracts committing Transnet to sponsoring TNA Business Breakfasts worth more than R100 million over several years.
Molefe did not have the authority to conclude the contracts, the Zondo Commission found, and furthermore failed in his duty to prevent wasteful and irregular expenditure, as the breakfasts did not result in any value to Transnet.
In an attempt to further the scheme and avoid having to obtain board approval, the deals were cast as partnerships, rather than sponsorships. Molefe could, as CEO, approve sponsorships to the value of R10 million.
The deals with TNA were often double that amount. In every case, TNA was paid upfront.
“The business breakfast contracts were clearly not partnerships. They were sponsorships that exceeded the group chief executive’s delegation of authority. This ought to have been picked up just as Mr Matjila’s efforts to commit Eskom to the business breakfasts was found by Eskom’s auditors to have been beyond his delegation of authority,” the Zondo report found.
“Given Mr Brian Molefe’s role in the conclusion of the contracts referred to above between Transnet and TNA, particularly his misrepresentation that some of those contracts were partnerships when they were sponsorships, it is recommended that the law enforcement agencies conduct such further investigation as may be necessary with a view to the possible prosecution of Mr Brian Molefe by the National Prosecuting Authority for fraud and/or contravention of the PFMA,” Zondo found.
But, Molefe did not act alone.
Transnet: Mboniso Sigonyela – PFMA violation Former Transnet spokesperson, Mboniso Sigonyela.
“It is apparent that Molefe and Sigonyela were directly facilitating the use of public funds for TNA spending. They did not appear to put up any resistance and indeed appeared determined and anxious to ensure that these contracts were concluded (and on extremely disadvantageous terms for Transnet),” Zondo noted.
“Sigonyela used threats and intimidation to ensure that his subordinates complied with instructions to advance the interests of TNA. The spend on these contracts was irregular, fruitless and wasteful,” he found.
Sigonyela was the Transnet executive for marketing and communications. He pushed not only for the business breakfasts, but also another deal that was called the Big Interview, that would see Transnet sponsor a full page in The New Age newspaper, which would include an interview with a celebrity or personality.
Between 2011 and 2016, Transnet paid TNA R24.8 million for this, in circumstances where the parastatal’s media advisors had expressly recommended against it.
“The Big Interview sponsorship contracts were irregular in that they did not follow the ordinary processes set out (albeit informally) in Transnet. It is also clear that the spending was wasteful and fruitless expenditure as Transnet derived no value from it. No transparent and competitive processes were followed by Transnet in obtaining these services,” Zondo found.
“Sigonyela pushed his subordinates to make this happen, provided authorisation to Transnet media consultant and provided false information to Molefe in submission for him to approve same,” the Zondo report reads.
SARS: Tom Moyane – PerjuryTom Moyane.
Zondo recommended that former SARS commissioner Tom Moyane be charged with perjury for providing false information to Parliament.Moyane told Parliament in 2017 that he had never been involved in procurement, when he had in fact, signed a letter authorizing the award of a portion of a R16 billion debt collection contract to New Integrated Credit Solutions which was owned by his long time friend, Patrick Monyeki.
Another incident involved Moyane’s submissions to Parliament regarding an investigation by Hogan Lovells law firm into the former SARS chief operations officer, Jonas Makwakwa. Zondo does not delve into too much detail around the specifics, but found that Moyane had acted to advance the interests of state capture in undertaking an extensive restructuring of SARS, with consultancy Bain and Company, when no such restructuring was needed.
Instead, the restructuring was intended to “neutralise” key individuals.
Former president Jacob Zuma – Perjury Former president Jacob Zuma.
Zuma has already felt Zondo’s wrath with his conviction for contempt of the commission for failing to file submissions even after he was directed to do so by the courts. He was handed a 15-month prison term by the Constitutional Court, which in July 2021, led to deadly looting and unrest in KwaZulu-Natal and Gauteng.
More than 300 people died. In the first part of its report, the commission already found that Zuma acted on numerous occasions to further the state capture project.
The earliest example of this, was when Zuma instructed the late minister Collins Chabane to remove then Government Communications and Information Systems chief executive, Themba Maseko.
In testimony before the commission, Zuma lied about this, saying he had never issued the instruction, which could amount to perjury.
Zuma flatly denied that he had ever instructed Chabane to remove Maseko as alleged during a phone call with Chabane in January 2011, however the evidence heard by the commission to contradict this, is overwhelming.
“On the evidence heard by the Commission there is absolutely no doubt that President Zuma did, indeed, instruct Minister Chabane to fire Mr Themba Maseko or move him from his position as DG and CEO of GCIS. There is also no doubt that in giving this instruction, President Zuma was giving effect to the wishes of the Guptas or was complying with their request or instruction to him to remove Mr Maseko because he had refused to co-operate with them,” Zondo found.
Zuma, who had been out of the country at the time, gave his version of the phone call: “I will wait until I leave the country and when I am very far away, then call [!] It is quite funny. I am not running a department. Why would I have not talked to Minister Chabane when I was here? Why should I wait until I go?
“It is a little bit fishy. If the Minister is finding it difficult to say to the DG, I am now saying go, and use the name of the President because I do not see why I should leave the country. Only when I am abroad then I must attend to this issue. It definitely – it is a little bit strange and funny and I – I never phoned Chabane about the – this DG when I was abroad. Not at all,” Zuma said.
“Zuma’s version that he did not instruct Minister Chabane to fire Mr Maseko or move him out of GCIS and that Minister Chabane may have requested President Zuma to approve Mr Maseko’s transfer because there may have been an issue between Mr Maseko and Minister Chabane is a dishonest version,” Zondo found, adding:It is a fabrication by Mr Zuma to avoid accountability for a decision that he took. Mr Zuma falsely implicated Minister Chabane because he knew that Minister Chabane has passed on and will not be there to refute his evidence.
Chabane died in a motor vehicle accident in 2015.
“They [the NPA] would have to evaluate the evidence and make a call as to whether there is sufficient evidence to enable them to institute charges, or whether there is something more that they would need to do,” Naidoo said.
“In those cases, there clearly is a considerable amount of evidence but ultimately the weighing of that evidence before a prosecutorial decision is made lies with the NPA,” he said of some examples mentioned to him.
Fritz said that private prosecutions were not an option as a “systematic” approach.
One or two cases were perhaps possible, but she felt it would be too costly and difficult to bring widespread private prosecutions.
“We have got to make sure that there is capacity within the state to take on these prosecutions in a wholesale way,” she said.
In this regard, the NPA announced last week that it would establish a task team to tackle the recommendations made by Zondo, who is due to deliver parts two and three of his report at the end of January and February.
“I don’t think anyone can say it’s a bad thing if the NPA wants to ensure there are specialized resources to take forward these recommendations and whether that is financial or expertise or collaboration with other agencies, I don’t think one can say that’s a bad thing,” Fritz said.
“I do think one will hear the praise from the public and the applause from civil society when we actually see successful prosecutions, cases that are prosecuted with excellence, and not just the appointment of another task team,” she said.
Naidoo said the announcement signaled a recognition of the need for the NPA to move quickly.
“The country is getting increasingly impatient to get action moving, to see prosecutions starting, and I think the announcement by the NPA of this task team, I think they recognise the urgency of some of these matters,” he said.
Additional reporting by Jeff Wicks.