The man at the centre of an influence-for-shares scandal rocking parastatal Transnet and the Department of Public Enterprises has — despite attempts to obscure his role — been acting as an official fundraiser for the African National Congress.
The Mail&Guardian last week reported that Zwelibanzi “Miles” Nzama allegedly told Sechaba Photoscan, a bidder in a Transnet privatisation tender, that he could “guarantee” success if the company handed over 15% of its shares. When rebuffed, Nzama negotiated with another bidder, Skotaville Press, which allegedly then sold the ANC a heavily discounted 20% stake.
Although Transnet had evaluated Sechaba tops in the tender to take over the Transnet printing division, it eventually handed the tender to Skotaville. This was after intervention by Minister of Public Enterprises Jeff Radebe and his director general, Sivi Gounden.
The tender bungle has cost Transnet dearly: the Johannesburg High Court last month ordered that it pay Sechaba R57-million damages for having been unfairly deprived of the tender.
The M&G can reveal that Nzama, whose true role party heavyweights have shielded, has in fact been managing a fundraising operation for the ANC in conjunction with the party’s top finance official, treasurer general Mendi Msimang. A third person involved is Nomazizi Mtshotshisa, the ANC-aligned businesswoman who is the chairperson of another parastatal, Telkom.
Last week the ANC national representative, Smuts Ngonyama, said when pressed on Nzama’s role: “I only know him as an ordinary member of the ANC. He does not even work full-time for the ANC … I don’t know.”
And Msimang, when asked whether the ANC had acquired shares in Skotaville, suggested it was a wrong impression created by people who had misrepresented themselves as doing business on behalf of the party.
“A number of people always say they do certain things in order to support the ANC. There is no documentation to show that we are in fact holding these shares.”
True, there may be no such documentation: the allegation in Johannesburg High Court was that the ANC held its interest through a nominee, a mechanism which cuts the paper trail and hides the true owner.
However, there is documentation to show that Nzama, Msimang and Mtshotshisa’s operation was set up not only to accept donations, but also to acquire investments, including shares — through nominees if necessary.
Their vehicle is a trust fund, conveniently at arm’s length from ANC structures, but with the party as the sole beneficiary. It is named, quite simply, the “African National Congress Fundraising Trust”.
It is not clear in how many or in which companies the trust has a stake. It is also not clear how many of these companies have tendered for state contracts. Both Msimang and Ngonyama failed to respond to detailed questions.
In that uncertainty about the party’s interests lies danger for the political process. Politicians have to declare their personal commercial interests publicly; a powerful disincentive to the abuse of office for personal gain. But political parties have no similar obligation to declare, meaning politicians or officials who make biased decisions to advance the commercial interests of their parties are unlikely to be caught out.
That same secrecy gives a tremendous incentive to party fundraisers to extort “donations”, including shares, from companies that compete for state contracts; or for companies wanting state contracts to offer to share the spoils with party fundraisers.
Evidence that Nzama was involved in such an influence-for-shares scheme includes:
• Affidavits by the joint managing directors of losing bidder Sechaba Photoscan, Mandla Mthembu and William Petersen, in which they outline Nzama’s alleged offer. Petersen describes a meeting at a Sandton hotel on March 9 2000, during the tender process: “Miles Nzama informed us that … with his contacts in the African National Congress, he could guarantee our success for a consideration of 15% of the shares in Sechaba Photoscan, at no cost to his principal.”
Petersen said the offer was rejected.
– An affidavit and correspondence from Robert Rammble, a partner at the time in Skotaville Press. He claims “the only reason” Skotaville got the tender was because of Nzama’s “communication” with Skotaville and because Skotaville handed over 20% of its shares to an ANC nominee “at an exceptionally low cost”.
These allegations were repeated in court papers by Sechaba Photoscan when it sued Transnet, and the allegations were not challenged.
Documents inspected by the M&G show that the fundraising trust was already being shaped in November 1998, when Deloitte & Touche, in correspondence with Nzama, agreed to be the trust’s auditors.
The trust was formalised in October 2000 by the Master of the High Court in Pretoria, with Nzama, Msimang and Mtshotshisa as trustees. The trust deed specifies the beneficiary as “any structure of the ANC”.
It devolves wide powers on the three trustees, including “to accept and acquire … any donations, bequests or payments from any person, firm, company or association”.
The trust can hold assets including “shares in any private or public companies … whether they be manufacturing or trading companies or otherwise”.
And to safeguard these investments, the trustees can serve as directors or officials of these companies, “or cause some other person or persons to be so appointed on the basis that such persons will act as nominees for the trustees”.
The M&G last week reported that Nzama is listed as serving or having served on the boards of at least 20 companies. It is not known in which of these he is acting on behalf of the trust — or indeed how many nominees are holding similar stakes on the trust’s behalf. It is known, however, that companies connected to Nzama have vied for government or parastatal contracts.
Nzama asked that the allegations be forwarded to his lawyer, but the lawyer failed to respond.
Mtshotshisa this week confirmed her status with the fundraising trust, but denied specific knowledge of the Transnet matter or any other details about where the trust held its interests. “To tell you the honest facts, I haven’t been in a situation to know where the trust holds shares, or if there are any where there are state tenders involved.”
She acknowledged conflicts of interest could arise “if someone from the ANC will make a decision [on contracts]”.