South Africans heaved a collective sigh of relief when the world community of 186 nations with the notable exception of the United States adopted the Kyoto protocol on climate change this week. Not only does the protocol promise to reduce pollution; if it had not been signed there would have been the very real possibility that ongoing negotiations would have bogged down the Earth Summit to be hosted in Johannesburg next year.
Minister of Environmental Affairs and Tourism Mohammed Valli Moosa, who participated in the negotiations in Bonn this week, hailed the agreement as ”a victory for the peoples of the world and a boost to the success of the Earth Summit. The successful conclusion of these negotiations means that the Earth Summit agenda can be focused on other substantial issues critical for development and poverty alleviation in the developing world.”
The agreement was a slap in the face for US President George W Bush, who repudiated the treaty as ”fatally flawed” in March, expecting the rest of the world to follow. The deal makes the US an environmental pariah and puts enormous pressure on the White House to come up with its own promised proposals to tackle climate change.
A recent editorial in the respected scientific journal Nature compared those who dismiss the threat of man-made global warming to those who maintained that HIV does not cause Aids or that smoking does not cause cancer. The menace is real.
But Bush is giving the finger to that menace, despite the fact that the US produces more than a third of the world’s greenhouse gases, on the basis that money and economic growth are the only real indicators of world progress. His father, former president George Bush snr, applied the same attitude when he tried to influence Botswana to lift a moratorium on lion-hunting earlier this year. He, too, was beaten back by Africa.
The South African delegation in Bonn this week was asked to lead negotiations on the thorny issue of compliance with the Kyoto protocol. They came home with the view that co-operation of all nations in respecting the agreement is critical to its success.
The fact that South Africa has been chosen to host next year’s Earth Summit is another indication of the increasingly important role this country is playing on the world’s environmental stage. Indications are that the summit may end up being the largest gathering of international leaders ever, with more than 100 heads of state and 50 000 representatives expected.
We have a big voice. It is time to let Bush and his dirty money-digging cronies hear it.
Vindicated
If doubts persist about the important watchdog role of the media, the past fortnight should have allayed them. Three investigations by this newspaper have had consequences that clearly serve the public interest.
The first of our three investigations probed Don Mkhwanazi. In November 1997 we reported that a company owned by Emanuel Shaw II a notoriously corrupt former Liberian politician landed a R3-million contract to advise Mkhwanazi, then chairperson of the Central Energy Fund (CEF), on ”all issues affecting the chair’s position” and on the restructuring of CEF. The contract was awarded without tender at Mkhwanazi’s behest. The next year, under the headline ”What was in it for Don?”, we reported that Shaw ”has been bankrolling the man who gave him the contract, CEF chair Don Mkhwanazi”. Shaw and Mkhwanazi even shared a bank account.
This week, after a lengthy investigation by the Investigative Directorate for Serious Economic Offences, Mkhwanazi pleaded guilty to contravening the Companies Act. The charges related directly to the contraventions exposed by the Mail & Guardian in 1998. He was fined R6 000 (or six months).
The second investigation involved Bheki Langa, who resigned as Telkom
deputy chief operating officer when the M&G published details last Friday of the allegations (of collusion with private security companies) he faced in an internal Telkom disciplinary hearing. Langa claimed that his resignation was unrelated to the allegations.
The Department of Mineral and Energy Affairs confirmed this week that Langa had been about to be offered the job of CEO of Petrosa, the new state oil company being created from Mossgas and Soekor, when we published the allegations against him. But the department said the offer was now being withheld pending the outcome of Telkom’s investigations.
The third investigation probed alleged petition fraud by Democratic Alliance members and/or Cape Town city council officials to promote Mayor Peter Marais’s campaign to rename two streets. We published on June 8, demanding that the truth out. Seven weeks later came the breakthrough, thanks to an affidavit from an official in the city’s legal department, Victoria Johnson. The council, province and the DA then acted with exemplary speed. Marais’s spokesperson and the head of the city’s legal department were suspended, and a fuller investigation, under Judge Willem Heath, was ordered. We shall see what more comes of it.
We do not gloat at others’ difficulties. But we are gratified to see our calls for an unrestricted, independent media vindicated, and to see our institutions acting on alleged or proven wrongdoing in the public sphere.
@Delivery is constrained by policy
A Second look
Anthony Holiday
The abortive land seizures at Bredell and Khayelitsha are more than siren warnings of clouds of social unrest on the horizon. They are reminders of decisions taken under duress, but also of opportunities missed and of opportunistic choices to leave certain alternatives unexplored.
The short-lived land invasions are symptoms of mass impatience with what must seem to the uncomforted poor like unendurably slow improvement in their economic fortunes. That impatience cannot be held in check by what the government’s neo-liberal macroeconomic policy will allow it to deliver. Arguably, given the constraints that policy imposes, the Department of Housing has done well to put roofs over the heads of five million people over seven years, and the Department of Land Affairs is to be commended for delivering some form of land tenure to 64 000 families.
Nonetheless, the limits the government’s overall economic strategy sets limits consistent with the demands imposed by a market-driven global capitalist economy will simply not permit a narrowing of the poverty gap on anything like the scale and at anything approaching the pace sufficient to avoid considerable social strife. That avoidance could be achieved only by massive state intervention, large-scale redistribution of wealth and legal measures which literally forced the rich to share with the poor in other words, by a socialist revolution.
Why is that not an option? How did the African National Congress, which had socialists aplenty in its ranks, inside and outside its ally, the South African Communist Party, allow itself to be manoeuvred into a post-apartheid dispensation which so dramatically curtailed its choices of economic paradigms? The answer lies in the confluence of circumstances which began to coalesce in the decade before Nelson Mandela’s release, circumstances which increasingly made a negotiated settlement between the revolutionary forces and the white establishment look like the only game in town.
The apartheid regime’s problems were legion. The Verwoerdian version of its race policy was in terminal disrepair. Civil unrest was endemic. White voters were divided and confused. Most seriously, the condition of the economy was pernicious. Respected Afrikaner journalists and academics began tentatively to suggest that the time to initiate talks with the ANC had arrived.
The ANC was in a somewhat more advantaged position. Its influence within South Africa had begun to revive, fed by the force of what became the United Democratic Front. Its intensive diplomatic initiatives had greatly increased its stature abroad. However, its efforts to launch a guerrilla offensive had run into the sand, and indeed never rose above the level of armed propaganda. There was a mutinous mood in the guerrilla camps in Angola. The ANC exile community was growing weary of decades of diaspora and their hosts were sending impatient signals that they wanted the whole business over and done with one way or another.
Moreover, for ANC leaders able to sense it and President Thabo Mbeki and Deputy Foreign Minister Aziz Pahad were among them at that stage the entire geopolitical climate had altered in ways which made a global transition to Soviet-style socialism look as unlikely as they made the survival of apartheid seem impossible. Economically exhausted by its support for liberation movements in Vietnam and elsewhere, bogged down militarily in Afghanistan and struggling to adapt to Mikhail Gorbachev’s free market experiment, the former Soviet Union was in no condition to provide unconditional support to an armed struggle in South Africa, or anywhere else for that matter.
The ANC leaders had no option other than to work for a negotiated settlement. But the business tycoons and statesmen Mbeki met in Dakar, Paris and elsewhere made it clear, in language he and Pahad had become adept at translating, that such a settlement could not be a way-stage to a socialist revolution. Any deviation from free-market economics would be met by financial isolation on an international scale. There was, therefore, a sense in which the growth, employment and redistribution strategy was inevitable from the moment Mandela left prison in 1990.
What was not inevitable was that the SACP should continue to cling to the ANC’s skirts and its parliamentary seats, instead of forming a socialist opposition after the Constitution had been safely agreed to and the government of national unity had dissolved. By neglecting to do this, despite their considerable reservations on economic policy, the communists deprived the nation of a principled parliamentary debate on alternatives to the capitalist path. Such a debate might well have produced an economic vision which avoided the pitfalls of rampant free marketeering and the snares of failed oriental models of socialist central planning.
This dereliction of duty has left the field free to unscrupulous bidders for power to harness the popular revolt against inequality and use it for their own purposes.
Dr Holiday teaches philosophy at the University of the Western Cape’s School of Government and at the Institute of Political Sciences in Paris
@Cape fruit farms go under the hammer
Marianne Merten
It took five minutes for the auctioneer’s final gong to signal the change of owner of Kromvlei fruit farm near Elgin lock, stock and barrel for half its market value.
No amount of cajoling could get the 60-strong crowd assembled on the steps of the white manor farmhouse to top the R11,75-million bid. Kromvlei’s land alone was valued at more than R15-million. Also adding value is the farm’s accreditation by British supermarket Tesco, a first in South Africa.
As the buyer will not be named until the sale is confirmed, rumours spread among the crowd that Land Bank officials bought the farm ”for one of their empowerment projects”.
The two bank officials at the auction rejected this speculation, but confirmed that at least three Cape farms form part of its empowerment programme.
Farmers are worried. The low sale price means local land prices have effectively dropped. This will further depress their balance sheets, already under pressure from a downward spiral in the fruit market.
”This is going to have a snowball effect. We just had halved the worth of our assets but the liabilities remain the same,” said Daniel Joubert, who grows apples, pears and plums in Elgin.
Most of the farmers around Elgin, about 80km outside Cape Town, are battling with increasing production costs, stagnant produce prices and bad weather. Overheads are about R25000 a hectare, yet a ton of apples fetches less than R1000 or an average of R300 if sold to juice makers. Most of the fruit has to be exported to make a profit, but tastes abroad have changed.
Under such conditions it is difficult to break even. Auctions of bank- rupt farms in the Western Cape have increased over the past year, particularly in the fruit-growing areas around Ceres. In the next three weeks another five farms will come under the hammer in the Boland.
Some believe farm auctions could help speed up land reform. Centre for Rural Legal Studies senior researcher Ruth Hall said current laws allow such a proactive approach to the country’s pressing land needs, although appropriate regulations may still have to be drafted. ”It’s an ideal opportunity for government to go out there and acquire good land and infrastructure.”
An assessment and recommendations on the economic feasibility of agriculture, jointly drafted by organised agriculture and the Department of Agriculture and Land Affairs, will be handed to the president’s office within eight weeks.
The Land Bank, in close cooperation with the agriculture and land affairs department, has started an agricultural empowerment and land reform programme.
This Friday the Badenau farm in the Hex River Valley, which was bought out of curatorship, will be signed over to a black farmer. Two other farms have been identified for land reform in the Ceres district, with one of them already being operated by an empowerment company.
Under this programme the Land Bank acquires farms and then meets potential emerging farmers, farm workers and agricultural unions to discuss the title deed transfer to a workers’ trust or empowerment company. It maintains a share of the land on behalf of workers to be sold once the farm is profitable.
Kromvlei’s 200 workers and their families now face uncertainty. They have much to lose they live in brick homes or hostels, have a community hall, a crche and rugby field. Six pensioners and four widows have life tenure rights.
”We are a little worried. We must wait and see until the new owner comes here and tells us what he wants to do,” said farm worker Andries Koeries. ”We put our faith in the Lord.”
@Anti-Mbeki pamphlet surfaces in Mpumalanga
Jaspreet Kindra
A pamphlet highly critical of President Thabo Mbeki’s leadership of the African National Congress is being circulated in Mpumalanga. It says Mbeki’s leadership is characterised by a ”shift towards dictatorship”.
The badly written pamphlet has numerous incorrect spellings. Entitled Briefing Document, it calls on all former United Democratic Front (UDF) members ”and those were in prison together with gunuine [sic] comrades who were in exile work together to save the movement from the disastrous path Thabo has put it on.
”Consultations in the province must start immediately, with a view to consolidate amongst branches, regions and provincial structures ahead of the 51st national conference next year, which we are lobbying, it must be held in Cape Town [sic].”
ANC spokesperson Nomfanelo Kota says: ”The party dismisses the pamphlet with the contempt it deserves. It is very un-ANC for people to communicate or lobby through faceless pamphlets while there is a proper process of lobbying their choice of leaders through ANC structures.”
Mbeki’s office would not comment.
The Mpumalanga pamphlet proposes a list of names for the party’s top positions as a ”mere guide for consultative purposes”:
”President: Cyril Ramaphosa; Deputy president: Terror Lekota; National chairperson: Tokyo Sexwale; Secretary general: Kwalema Motlante [sic]; Deputy secretary general: Valli Moosa, Treaure [sic] general: Popo Molefe/Mathew [sic] Phosa.”
This is the second pamphlet critical of Mbeki to emerge in the run-up to the elections of provincial ANC office-bearers to be held later this year.
A pamphlet, believed to have originated in the North West province, caused a furore among the ANC leadership in April. It was followed by Minister of Safety and Security Steve Tshwete publicly identifying Ramaphosa, Sexwale and Phosa as co-conspirators of a plot to overthrow Mbeki. Tshwete named former Mpumalanga ANC Youth League leader James Nkambule as the source of the allegations.
The allegations sent waves of paranoia through ANC provincial structures as divisions between former UDF members, those who were in exile during apartheid and those held on Robben Island surfaced.
The Mpumalanga pamphlet refers to this controversy while citing ”rumour mongering” as a feature of Mbeki’s tenure, ”characterised by his use of state resources to deal with opponents, eg. the Tshwete-Nkambule plot saga”. It claims Mbeki’s tenure has been characterised by:
l Continuous and deliberate sidelining of key former UDF and Robben Island leaders.
l A deliberate campaign to side-line key former exiled members who differed with him in exile.
l Centralisation of power in his hands by appointing ”his cronies” into strategic positions in the ANC and the state machinery.
ANC sources in Mpumalanga cite disillusionment within the party’s provincial structures as a reason for the pamphlet surfacing. ”There is unhappiness about the deployment of party personnel from the province and to the province,” says one, referring to the removal of six senior ANC leaders last month to the national Parliament.
An official deployed from the national Parliament, Thabang Makwetla former ANC caucus chairperson says he has not come across any disgruntled members. ”The recommendation for the deployment had come from the province itself at the political tribunals held here some months ago.”
Nkambule has been expelled from the ANC Youth League in Mpumalanga on charges of misconduct.
@President’s brother buys into arms deal
Moeletsi Mbeki stands to make millions if his investment plans are approved
Paul Kirk
The younger brother of President Thabo Mbeki is hoping to make millions out of arms sales by buying into a weapons company tied up in South Africa’s R50-billion arms deal.
The way the company Moeletsi Mbeki hopes to buy into came to be so profitable is a fascinating tale involving the controversial government arms procurement chief Chippy Shaik.
The company, Vickers OMC, formerly Reumech OMC, was originally part of privately owned South African Reunert group of defence-related industries. With its research financed by millions of tax rands, the firm developed some of the world’s most sophisticated military vehicles. Best known for producing vehicles such as the Nyala and Rooikat and the chassis for the world-beating G6 cannon it also built tanks.
The OMC in Reumech’s name stands for the Olifant Manufacturing Corporation. The Olifant was South Africa’s indigenous main battle tank, based on the obsolete British Centurion Tank chassis. Reumech OMC was the only South African firm capable of constructing and maintaining heavy armour such as tanks.
In addition to this construction line, Reumech also had two operating units: a research and design facility called Ermetek; and a gearbox construction unit for giant vehicles, Reumech Gear Ratio.
Despite lucrative contracts including supplying Casspirs to India and strong interest in the company’s G6 cannon chassis, Reumech was sold for little more than R120-million in mid-1999 by its parent company, Reunert, to Vickers plc, a British company owned by Rolls Royce, itself a component of BAe Systems.
It then became Vickers OMC.
Business Day last week reported how Mbeki joined Diliza Mji, former ANC treasurer in KwaZulu-Natal and BAe Systems’ South African chairperson, to bid for a stake in Vickers OMC.
Using funds that Mji sourced from the Industrial Development Corporation (IDC), the duo, the only two directors of Dynamic Global Defence Technologies, plan to buy a R22-million stake in the newly formed Vickers OMC. The Registrar of Companies simply calls Mbeki’s company by its initials, DGD Technologies.
Mji’s directorship of the IDC raised some eyebrows and prompted Minister of Trade and Industry Alec Erwin to order that a list of loan and business transactions between the IDC and its directors be published by the end of this week.
Business Day reported that Vickers OMC failed to win a stake in the recent arms deal. But the Mail & Guardian has established that the company is set to make a tidy sum of money from the deal possibly thanks to the interference of Shaik in the tender process relating to the supply of ships to the navy.
The minutes of the Procurement Committee on Defence discussing ”Project Citron” code for the naval element of the arms deal and Armscor correspondence throw Shaik’s role in awarding contracts into sharp focus.
Minutes of the meeting on August 23 rubbish claims by the government that the state played no role in the awarding of sub-contracts. In this instance, the procurement committee intervenes on behalf of and Chippy Shaik personally goes out to bat for a subcontractor connected to the company Mbeki hopes to buy into.
Item 12 on the minutes reads: ”Gearboxes. Acting project officer, Project Citron, informed the board that there was some deliberation around use of either the Maag or Renk gearboxes … The dilemma being that, whereas the Maag [a European manufactured] gearbox is the preferred option, the Renk gearbox will provide much-needed work for [Reumech] Gear Ratio.”
Shaik then interjects that, provided the technical aspects are identical, the extent of industrial participation the companies are offering must be the final arbiter of who wins.
The Maag gearbox was clearly technically preferable to the Renk. An earlier letter from Lew Swann, CEO of Armscor, dated June 29 1999 and addressed to the German Frigate Consortium, says the project control board had decided on Maag as the supplier of gearboxes. The board had the exclusive task of evaluating technical aspects of various bids.
Swann’s letter notwithstanding, the day after the Project Citron meeting of August 23, Shaik tasked a senior Armscor official to write to the German Frigate Consortium informing it of the importance of Reumech Gear Ratio to both Armscor and the Department of Defence. The letter, dated August 24, was written after Shaik sent a memo to the official concerned informing him of the decisions taken at the committee meeting the day before. Almost overnight the Maag product was dropped and Renk was chosen instead. ”Much needed work” as the minutes call it, was about to be sent Gear Ratio’s way.
The minutes have a footnote that this recommendation comes into effect after August 30 1999.
The price of R120-million that Vickers plc paid for Reumech OMC was based on the value Reumech OMC had at August 30 1999 in other words before Reumech could boast the contract for gearboxes for the German Frigate Consortium.
The fact that the soon-to-be-signed Corvette gearbox contract appears not to have been factored into the price is either incredible coincidence or worse. Soon thereafter, the value of the Corvette gearboxes would have had to be factored into the price.
But the Corvette contracts are not the only factors that stood to increase Reumech OMC’s value. Vickers OMC stands to make big profits from a number of new arms contracts to re-equip the army.
Originally the defence department had hoped to buy nearly 150 main battle tanks. This project code named Project Aorta has been put on ice but may be revived.
If Project Aorta is revived, Vickers OMC could make big profits from the R6-billion deal. As the only local company capable of delivering main battle tanks, it is likely to be favoured above foreign-based suppliers.
Also likely to throw millions the way of Vickers OMC are Projects Ambition and Hoofyster, both of which aim to allow the South African National Defence Force to field new armoured cars. The exact value of these projects is unknown.
Contacted for comment Mji stressed that his company had not yet bought into Vickers OMC. Mji said: ”It is out of our hands really. We have put in a bid and we will have to wait for approval from Britain.”
Mbeki’s office this week said he would stand by Mji’s comments.
@A Shaiky tale
While the tale of Vickers OMC is an interesting one, the minutes of the Project Citron meeting that detail how the company came into a lot of work overnight also tell an interesting tale about defence acquisition chief Chippy Shaik.
The minutes suggest Shaik may not, as has repeatedly been claimed, have recused himself from meetings where his brother Schabir Shaik’s arms company was discussed at least not at the time he claimed he did.
Paragraph 15 of the minutes details how Chippy Shaik has declared his possible conflict of interest in an earlier meeting and that it has been noted in paragraph 13 of the minutes of the meeting held on April 28 1999.
However Shaik told Parliament’s Select Committee on Public Accounts that he declared his interest much earlier on December 4 1998.
Item 10 of the meeting held on August 10 discusses combat suites for the corvettes a contract Schabir Shaik was bidding for and there is no record of Chippy Shaik leaving the room. Although he is not recorded as speaking, it appears he may have listened in to the deliberations around this programme that affected his brother’s business.
Shaik himself signed the minutes to approve them and so he could hardly not have noticed an omission as important as recording his departure from the room. Sitting in the room as he appears to have done, he ran the risk of being accused of leaking information to his brother. Paul Kirk
@Bill to ban private third-party eavesdropping
David Le Page
The Interception and Monitoring Prohibition Act of 1992 is to be replaced by a new Interception and Monitoring Act, currently a Bill.
The names of the two Acts suggest that the trend in South Africa is away from the avoidance of eavesdropping and towards licensing the state to increase its monitoring activities.
This is confirmed by a close reading of the Bill that demands that the police, defence force, intelligence and directorate of special operations establish ”central monitoring centres”. These centres can (but need not) be shared, and are likely to be rather expensive.
These centres will serve as points to which communications may be diverted by service providers when this has been approved by a judge. But significantly, the Bill makes provision for information about calls, as opposed to content, to be diverted without judicial sanction.
Without asking a judge, senior police, army and intelligence officials will be able to request, for an unlimited time, information such as who you are calling, how long you talk to them, where you are calling from and where those calling are when calls are made.
In the right circumstances this information might be as useful to the agencies as anything actually said in the course of calls.
When those using the Bill do turn to a judge, it will have to be in cases of crimes or planned crimes that cannot be otherwise investigated or in the event of a threat to national security or ”other compelling national interests”. What such compelling national interests might be is not further defined.
The Bill has substantial implications even for those not plotting to intercept the flow of 4x4s to the upper echelons of government. It makes it legal for one of two parties conducting a conversation to record that conversation without the other’s knowledge.
It also makes any bugging of a conversation by a third party, such as a private investigator, illegal under all circumstances.
The bill will probably provoke further protest from the likes of MTN and Vodacom it demands that they foot the cost of equipment required for monitoring communications; the state will only pay for the ”direct costs” of intercepting and diverting communications, and will not cover any long-term equipment costs. There are likely to be equivalent costs for Internet service providers.
Of even greater concern to the cellular networks is the Bill’s demand that proper records be kept of the identities of those purchasing pay-as-you-go cellular airtime.
The government has given interested parties less than a month to comment on the Bill, which was published on July 18. All comment must be received by August 13.
Quit bugging me, mate, page 10
@Mkhwanazi gets six months for CEF deal
After a brief court appearance the former head of the state’s oil company paid a fine to avoid prison
Evidence wa ka Ngobeni
Don Mkhwanazi, one of the leading South African black businessmen, has been convicted of contravening the Companies Act while working for the Central Energy Fund (CEF), the state oil company.
Mkhwanazi was sentenced to six months in prison, with an option of paying a R3 000 fine, in the Randburg Magistate’s Court on Thursday. He pleaded guilty on Monday.
He paid the fine on the spot. The prosecution said Mkhwanazi had a ”material interest” in the R3-million-a-year contract he awarded to Liberian politician Emanuel Shaw II and his company International Advisory Services (IAS).
Mkhwanazi was the chairman of the CEF at the time. He did not disclose his relationship with IAS at the time Shaw was awarded the contract or the fact that he provided IAS with the funds to establish the consultancy.
He is suing the Mail & Guardian for R3-million for publishing these charges and for an entry in the Krisjan Lemmer column describing him as a ”well-known crook about town”.
He claims an M&G article entitled ”What was in it for Don” (February 1998) was defamatory and damaging to his reputation. The article described how he and Shaw shared a bank account, which paid bond instalments on Mkhwanazi’s luxury home. The article also said state oil officials were not informed of Mkhwanazi’s close association with Shaw before signing him up as consultant.
On Thursday he arrived at the court in his Mercedes Benz S 360, with a personalised number plate reading ”Donga”. He was on crutches and walked slowly into court flanked by two men. His legal team comforted him as they went past the security gate.
Inside the courtroom he sat motionless. After paying the R3 000 fine he was set free. Outside the court he tried to assault an M&G photographer, hitting out with his crutches when photographs were taken of him. Only a few people were in court during Mkhwanazi’s first appearance on Monday. His case was on the court roll for Tuesday.
Within minutes of his trial starting, he pleaded guilty. According to the charge sheet Mkhwanazi shared a bank account, through his company Juno Investments, with Shaw.
The charge sheet also states that that Mkhwanazi had financial links with Shaw before and after he awarded him the R3-million job a charge that was first revealed by the M&G in 1998.
Mkhwanazi has always maintained his innocence. In 1998 he shrugged off the findings of a commission of inquiry, which was appointed by former minister of mineral and energy affairs Penuell Maduna to look into the allegations against him.
Maduna failed to take decisive action against Mkhwanazi despite recommendations by the commission that Shaw’s contract be cancelled and that Mkhwanazi be sacked as chair of CEF.
Mkhwanazi finally resigned as chair of CEF in April 1998, citing a campaign of innuendo and malice by the M&G as one of the reasons. Again he declared his innocence.
Mkhwanazi’s brief was to transform and oversee the restructuring of the state oil company. In 1997 he appointed IAS to advise on the restructuring .
Mkhwanazi hired IAS without going through tendering procedures and without the knowledge of Maduna. According to the charge sheet, he flouted the Companies Act as he had material interest in and funded the establishment of IAS.
Despite pleading guilty on Monday, Mkhwanazi issued a statement on Thursday attempting to justify his actions as an ”oversight”.
Mkhwanazi said: ”This … serves to acknowledge that in my capacity as chairman of the Central Energy Fund … I unintentionally omitted to opportunely disclose a professional relationship that existed at the time between a person whose company was awarded a consultancy contract by CEF and myself.
”With the benefit of hindsight, I do realise now that I erred in not informing board members of CEF that the principal of International Advisory Services had in the past done some work for companies owned by me, prior to the signing of the contract between CEF and IAS, as we legally and ethically expected of me to make such a declaration.
”This error of judgement on my part, which I sincerely regret, was at no stage driven by any hint or possibility of personal gain financially or otherwise.”
@New questions over Telkom security
Stefaans Brmmer and Evidence wa ka Ngobeni
Police are investigating charges of cable theft against officers of a security company with which departing Telkom crown prince Bheki Langa has been accused of colluding.
Langa, the deputy chief operating officer groomed to take over as chief operating officer, resigned from Telkom last Friday as the Mail & Guardian published details of disciplinary charges the parastatal intended to bring against him after months of investigation.
The charges included allegations that Langa abused his position to help security companies based in Durban, his hometown, bag Telkom contracts worth millions; that he covered for these companies; and that he compromised Telkom security.
The two main companies named in the Telkom charges Royal Security and an associated company, Indlovu Security have Telkom armed response contracts covering all of KwaZulu-Natal, while Royal also has guarding contracts in Gauteng. Until an internal reorganisation in March, Langa’s portfolio included Telkom’s security and investigations division.
Nationally, cable theft is one of Telkom’s biggest security headaches, with losses of up to R38-million a year. It is for this reason that Telkom has entered contracts with private security companies to guard and respond to cable theft. If the security companies do not perform, Telkom’s losses are compounded.
The M&G has a copy of an affidavit by Nicolas Holt, a resident of Umhlali near Durban, who states that on April 18 he and a private guard surprised three men two of them in Indlovu Security uniform hacking at Telkom cable freshly laid near his house and attempting to drag more cable away with an unmarked vehicle.
Holt claims more than R1-million worth of Telkom cable had been stolen from the area since December, and that the same stretch of cable was regularly stolen sometimes on the same day it was laid.
Umhlali police this week confirmed they were completing an investigation into the incident and that the docket would be forwarded to the prosecution service soon for a decision. One police investigator confirmed that the Indlovu guards implicated had, in their version, not disputed being on the scene they were only disputing actually trying to steal cable.
Indlovu Security failed to comment on the matter.
Official Telkom figures also raise questions about the effectiveness of Royal and Indlovu. The figures show that in January to June this year, arrests related to cable theft were drastically lower in Telkom’s eastern region essentially KwaZulu-Natal, where the two companies have all the armed reaction contracts than in Telkom’s other ”trouble regions”.
In the north-eastern region (Pretoria and beyond) there were 162 arrests, while the Gauteng central region and the central region (Free State) each reported 104 arrests. Royal and Indlovu’s eastern region reported only 31 arrests over the same period.
Meanwhile, it appears that Langa took the leap from Telkom without being sure as he implied in a statement last Friday of alternative employment. In the statement Langa said: ”I have resigned from Telkom, with effect from the end of July 2001. I will be taking up the position of chief executive officer in another organisation …
”My resignation from Telkom is not related to the allegations made against me. I was approached months ago, and had already started negotiations concerning my new employment when the allegations were made. These allegations have no basis in fact, and I look forward to having my name cleared.”
The ”other organisation”, it soon emerged, is Petrosa, the new state oil company being created out of state oil assets including Mossgas and Soekor. Kanyo Gqulu, representative for the Department of Mineral and Energy Affairs, was reported earlier this week confirming that the oil job offer was about to have been made to Langa when the Telkom allegations emerged.
But, Gqulu said, the offer would be withheld pending completion of Telkom’s probe.
When Langa resigned, Telkom confirmed it had intended a disciplinary hearing against him, but said the hearing could not be held in view of his resignation. The investigation would, however, be pursued.
A Mossgas board representative later said Langa would be treated as ”innocent until proven guilty”, but that a written ”reference” was being awaited from Telkom.
In his statement last week, Langa said he had provided Telkom with a detailed response to all the allegations against him. ”I am confident that my response shows that there is no factual basis whatsoever for any of the complaints.”
It is understood that some senior Telkom executives have accepted Langa’s explanations, while others believe he is not in the clear.
@The main players in the state oil sector
l Don Mkhwanazi presided over the board of the Central Energy Fund (CEF), the state oil holding company, between 1997 and 1998. His brief was to change CEF in line with broader transformation. Mkwanazi did not stay long enough to fulfil this mission.
Mkhwanazi resigned in 1998 after the M&G revealed how CEF had irregularly appointed a shady Liberian consultant to advise on restructuring. Mkhwanazi was this week convicted on related charges in the Randburg Magistrate’s Court.
l Keith Kunene’s subsequent appointment as chair of the CEF board three years ago was expected to close a disastrous chapter. Not so. Kunene, who has also since resigned and whose entire board was dissolved by the government, is now the subject of a probe by the Scorpions for allegedly accepting a R360 000 kickback to influence a secret oil deal with an international firm.
l Seth Palatse, the chair of the Strategic Fuel Fund, a subsidiary of CEF, was one of the major players who presided over the controversial R1,5-billion oil deal which cost Kunene his job. Palatse, who now works for BMW South Africa, was forced to resign from the SFF board last year.
l Renosi Mokate, the present chief executive of CEF, was put at the helm of the state oil company by Kunene. A former director at the University of Pretoria, Mokate earns an annual salary of more than R1,2-million nearly double that of President Thabo Mbeki. Mokate landed the extraordinary remuneration package without board approval.
ENDS