/ 29 July 2005

‘No evidence of wrongdoing’ in Oilgate

No evidence of wrongdoing has been found in the so-called Oilgate scandal, involving a payment by black empowerment company Imvume to the African National Congress, Public Protector Lawrence Mushwana said on Friday.

Mushwana was speaking to journalists in Pretoria at the release of the report into the Oilgate scandal, in which Imvume is alleged to have paid R11-million to the ANC before last year’s elections.

”The ANC and Imvume are not public entities, they do not perform public functions and are not part of any level of government.

”The state has no shareholding in Imvume,” Mushwana said, reading from the report.

”The alleged payment was clearly made by one private entity to another and could therefore not have had any bearing on state affairs.”

Mushwana said on the available evidence he has not seen any offence and, although the National Prosecuting Authority is an independent body, if he were to recommend that it opens a case, he would have nothing to show the authority.

The sum of R11-million is alleged to have been from an advance payment of R15-million Imvume had received from PetroSA to procure oil from supplier Glencore, which Imvume allegedly never supplied.

The investigation into the matter was launched after a complaint by the Freedom Front Plus in connection with the advance payment of the R15-million by public entity PetroSA to Imvume.

The complaint came after allegations of misuse of state funds arising from the matter were published in the Mail & Guardian in May this year.

It had been alleged that Deputy President Phumzile Mlambo-Ngcuka (during her term as minister of minerals and energy) had improperly influenced PetroSA’s decision to make the advance payment to Imvume.

The public protector’s report states such allegations made against Mlambo-Ngcuka were not substantiated and were without merit.

According to the report, no evidence was submitted or could be found to substantiate them.

The report makes several recommendations in relation to the outstanding payments to PetroSA.

”It was recommended that the board of PetroSA, in consultation with the CEO and its legal advisers, take urgent steps to ensure that the outstanding amount due to PetroSA by Imvume, is recovered without delay,” Mushwana said.

The report also recommends that the board regularly report to Minister of Minerals and Energy Lindiwe Hendricks on the progress made in recovering the outstanding amount.

Imvume sues M&G on sources

Meanwhile, Imvume Management has launched a court action to force the M&G to expose its confidential sources.

On Thursday last week, the company lodged an application in the Johannesburg High Court to compel the M&G, among other things, to disclose how the newspaper acquired information relating to Imvume’s bank account and ”the precise source” of such information.

In an affidavit setting out his case, Imvume boss Sandi Majali notes: ”There is an obvious ‘leak’ whereby [Imvume’s] confidential information is finding its way into the hands of the respondents.

”[Imvume] is entitled to know the source of this ‘leak’ to enable it to take steps to stop the leak and prevent the unauthorised disclosure of information from whatever that source may be.”

M&G editor Ferial Haffajee said Imvume wants the newspaper to disclose its sources.

”We will not do so. Journalism, globally, is facing threats to the principle of protecting confidential sources,” she said.

”This is the most significant post-apartheid challenge to the protection of sources in this country. We look forward to fighting it, though we have put out requests for financial assistance with our mounting legal bills.”

The court application also seeks to interdict the newspaper from further publishing or disclosing any information relating to the bank account or pursuing any further investigation in regard to the bank account.

Details of documents

Imvume wants the court to order the M&G to disclose the precise details of all documents relating to Imvume’s bank account that the newspaper has or may have had and to hand over any such documents to Imvume.

Majali argues that the M&G obtained copies of Imvume’s bank documentation unlawfully and was not entitled to publish information or pursue investigations based on such material.

”Their [the M&G‘s] acquisition and possession thereof is illegal and unlawful and which constitutes an invasion of [Imvume’s] right to privacy and to the sanctity of its commercial documentation …

”The [M&G] ought not, in the first place, to be in possession of [Imvume’s] confidential information and banking documentation at all and moreover, ought not be allowed to make use thereof … including for publication thereof or any investigative process whatsoever.”

Imvume argues that the M&G should pay its legal costs on a punitive scale given the M&G‘s conduct.

Majali has brought the application notwithstanding written assurance from the M&G‘s attorneys that the paper is no longer in possession of any such documentation.

Majali suggests this claim is ”unsubstantiated” and that it is evidence that the M&G ”recognise their possession of the documents is unlawful and are merely deploying tactics to evade a legitimate claim that they disclose such documents”.

The ANC has also renewed its legal attack on the M&G. The party sued the paper following an initial story in February last year about the ANC’s role in oil deals with the Iraqi regime under Saddam Hussein.

Although the party had not applied for a court date more than a year later, it has renewed the suit this month, following the M&G‘s recent revelations about the very close involvement of the party in Imvume’s Iraqi oil ventures.

In November last year, the M&G won an order to compel the ANC to set out specific details of what in the earlier article was inaccurate and defamatory. The party has yet to comply, but has taken the unusual step of applying for leave to appeal this so-called ”interlocutory” ruling.