Gupta past haunts new mines minister
Linked to two scandals involving the politically connected family, Mosebenzi Zwane will now oversee decisions involving their mining interests.
Early on Sunday evening this week, a presidential-level motorcade, complete with a large contingent of traffic police on motorcycles, paid a visit to the Gupta family compound in Saxonwold in Johannesburg.
On Tuesday night, President Jacob Zuma unexpectedly – and to the surprise of even top members of his own party – announced that he would fill a six-month-old vacancy in his Cabinet by appointing the relatively unknown Mosebenzi Zwane to the critically important mineral resources portfolio.
Zwane would be sworn in by the following afternoon, Zuma said in a short statement.
On Wednesday, the presidency did not respond to questions on whether Zuma was in the motorcade, or whether he had discussed his new Cabinet with the Gupta family. But the coincidence is sure to raise eyebrows.
On previous occasions, leaders in the ANC have expressed concern about the Guptas’ influence in appointments, and rumours about consultations with the family before Cabinet appointments are made have swirled around for years.
No mining experience
Zwane’s appointment as a minister plucked him from obscurity after a very brief stint in Parliament and, before that, in the Free State provincial government. He has experience in neither mining nor the handling of an important national portfolio.
He was central to the controversial Estina dairy project outside his hometown of Vrede, a project driven by associates of the Gupta family, although the family itself has denied being involved in the business.
And, in March 2013, a letter on behalf of Zwane, then the MEC for agriculture in the Free State, appeared to provide an official alibi of sorts to turn a visit by Indians into an official government visit – elements that allowed a private plane of Gupta wedding guests to land at the Waterkloof air force base.
In recent years, the Gupta family has moved into mining, primarily uranium – a feedstock that will be in demand if South Africa moves ahead with plans to build a massive new fleet of nuclear power stations – and coal, part of which is sold to Eskom.
Gupta and Gupta-linked companies involved in mining have several times run into trouble with regulatory requirements, including those on environmental compliance. Zwane will now be in charge of enforcing those regulations.
Total surprise to ANC NEC members
Zuma has an absolute prerogative over the composition of his Cabinet, but previous reshuffles and ministerial appointments have come up for discussion in ANC structures. This week, members of the ANC’s national executive committee said Zwane’s appointment had come as a total surprise – no hint of it was given at an NEC meeting at the weekend.
The controversies he became entangled with during his time in the Free State have not yet run their full course, and ongoing investigations could still draw him back into them – in one case, sooner rather than later.
The investigation of the Vrede farm matter has been completed and the report is being written, Kgalalelo Masibi, the spokesperson for the public protector, Thuli Madonsela, said on Wednesday in reply to questions about the Estina investigations.
The report is unlikely to leave Zwane smelling of roses.
The national treasury launched a full-scale investigation of the dairy project following several amaBhungane exposés about it in the Mail & Guardian in mid-2013.
The reports suggested the deal with Estina, a company without agricultural experience and led by a computer sales manager, flouted treasury rules and was designed to milk provincial government coffers.
In 2014, amaBhungane published the transcript of an interview with the then Free State department of agriculture chief financial officer, Dipatle Dlamini, that was conducted as part of the treasury’s investigation.
The transcript suggested the dairy project was conceived during a visit to India by senior department officials and Zwane, the then agri-culture MEC.
Following the visit, officials in Bloemfontein were summoned in May 2012 to a presentation on the project by Estina. Just three days later, the head of department wrote to Estina accepting its proposal.
In 2013, municipal officials and local politicians told amaBhungane they were not surprised that Vrede was chosen for the project because Zwane, they alleged, “runs the municipality as his little farm”.
“As the ANC regional chairperson, whatever Zwane wants he gets; people are scared of him and because he is close to [premier] Ace [Magashule], this makes him more powerful. No one dares to challenge him.”
‘Ace’s best friend’
A councillor said at the time the project was presented to the town council late in 2012 by Zwane, whom he described as “Ace’s best friend … they are like brothers”.
On Wednesday, Zwane was attending a funeral in Vrede and was travelling back to Pretoria for his inauguration ceremony when contacted.
He confirmed he was the initiator of the Vrede dairy project, which he said was merely part of a broader development concept called Mohoma Mobung, which involved the whole agricultural value chain.
He said: “The concept is still with the department … it was agreed that the administration should implement the project.”
He said, as a politician, his role was not to implement but to develop policy and exercise oversight.
The call dropped when Zwane was asked about his relationship with the Gupta family.
He did not respond to subsequent questions sent by SMS before the M&G’s deadline.
Narayan, Transnet, Neotel and Homix
The 2013 Estina articles also flagged allegations of the Gupta family’s proximity to the project and several of the role-players.
A well-placed source subsequently told amaBhungane that Zwane was good friends with Ashok Narayan, who served as an executive of the Gupta company, Sahara Systems, until about three years ago.
Narayan’s name also came up recently in connection with controversial commission payments by telecommunications company Neotel to a company associated with Narayan, Homix, to secure contracts with the parastatal Transnet.
The same source said Zwane flew to a wedding in India in December 2013 with Narayan, members of the Gupta family and Chandrama Prasad “CP” Yadav, the then manager of the dairy project.
Narayan was said to be a key person who liaised with Yadav about the project.
A source told amaBhungane that Atul Gupta was also involved in negotiations to buy a home in Vrede for the use of “CP”.
Yadav is the former secretary to Uttar Pradesh chief minister Mulayam Singh Yadav, the brother of the current Indian public works minister, Shivpal Singh Yadav, who was a guest at the infamous Gupta family wedding at Sun City at the end of April 2013.
The M&G previously reported that, in a letter dated early March 2013, the Free State department of agriculture extended an invitation to Shivpal Yadav to visit the province.
The invitation appeared to provide official sanction, which paved the way for a private Airbus chartered by the family to land at Waterkloof.
The invitation was on the letterhead of the Free State agriculture department and was signed on behalf of Zwane.
It was dated after the government was approached by a representative of the Gupta-owned Sahara Computers for permission to use Waterkloof, a request that was initially denied.
Denials and links
In 2014, the Free State provincial government and the Gupta family denied Gupta involvement in the dairy project, save for a short consulting contract performed by Linkway Trading, a Gupta company.
Spokesperson Gary Naidoo said the Gupta family “has no business involvement in the project”.
Attempts to pose questions to the family about their relationship with Zwane were unsuccessful at the time of going to press.
The Democratic Alliance in the Free State has on several occasions vowed not to let the Estina matter rest, and requested an investigation by the public protector into, among other things, Zwane’s involvement.
The opposition party has also called for investigations into what it branded “a mini Nkandla” in Warden, a town in the same district as Vrede.
Zwane has a home in Warden that, the DA alleged last year, had been built on municipal land and, according to community rumours, had been built using materials pilfered from a troubled government housing project in the town.
“MEC Zwane’s house has been valued at R29 000 while other houses in the vicinity have been valued at R300 000,” the DA said, implying the valuation had been manipulated to save Zwane money on rates and taxes, and to benefit him if a sale agreement for the land is reached.
A camera crew was attacked by a group of “concerned local citizens”, who objected to visuals being captured of Zwane’s private residence.
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The M&G Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za for our stories, activities and funding sources.