Veterans' official in private deals
The ANC’s Umkhonto weSizwe Military Veterans’ Association may have benefited as an organisation from a multimillion-rand Gupta family mining deal, but its treasurer general, Johannes “Sparks” Motseki, has also personally cashed in on it, a Mail & Guardian investigation has revealed.
Motseki, who told the M&G in an interview this week he was a close friend of President Jacob Zuma’s son Duduzane, has confirmed his stake in Dixie Investments. The company has a 5% shareholding in Islandsite Investments 255, a subsidiary of Oakbay Investments, which owns Shiva Uranium mine.
Motseki’s confirmation of his private business interest contradicts the veteran group’s president Kebby Maphatsoe’s denial last month that current veteran leaders have any personal financial interest in the Gupta empire.
Motseki’s business interests in companies linked to the Guptas lends credence to claims that the veterans’ association is being used as a political pawn by some ANC leaders to gain support in the run-up to the party’s elective conference in Mangaung next year.
Maphatsoe recently defended the business links between Zuma’s family and the Guptas, following reports about growing resentment within the ANC about the influence of the Guptas over Zuma. He accused the media and some ANC leaders of peddling unfounded allegations about the Guptas and Zuma’s family.
The Guptas bought the Shiva Uranium mine from Toronto-listed Uranium One last year for $37-million. According to the share register Shiva Uranium is owned by Islandsite 255 and Oakbay Resources and Energy.
Islandsite 255, which holds 26% in Shiva Uranium, is controlled by Duduzane Zuma and Rajesh Gupta, the youngest of the three Gupta brothers. Two MK-linked war veterans associations and Motseki’s Dixie Investments control 5% each in Islandsite.
The veterans’ association’s investment arm was formed in 1996 and was launched by former president Nelson Mandela. Its function is to assist its members and their families who are struggling to make ends meet.
Apart from its interests in Shiva Uranium, the association has also held shares in Mvelaphanda, Neotel, Cell C, Tjate Platinum Corporation and Fleet Africa’s Eastern Cape division, the M&G has ascertained.
The organisation was also identified as a possible black economic empowerment partner to controversial Australian-owned mining company Central Rand Gold, which Motseki helped to acquire its mining licence. Central Rand Gold has contracted veterans’ association-linked companies to provide security and fuel.
Central Rand Gold has also offered to donate an annual fee of about R1-million to the association to help it bury its members.
The M&G‘s attempts to get comment from Central Rand Gold were unsuccessful.
Although the association has entered into what appear to be lucrative deals in various sectors in the past few years, the proceeds of these investments have not visibly benefited ordinary members. Instead, some veteran leaders have been accused of using the organisation’s investment arm to accumulate wealth for themselves.
According to Maphatsoe, the association cannot account for all its investments because it cannot afford a forensic audit.
Motseki has previously attempted to hold both a private stake in a company and manage a stake on behalf of the association’s members.
When Central Rand Gold invited the association to join its BEE consortium, Motseki was offered a private directorship in a parallel company, Afri-Oz Resources, to scout for investment opportunities in Zimbabwe.
Motseki’s co-directors in Afri-Oz included self-styled sushi king Kenny Kunene. A visibly uncomfortable-looking Motseki told the M&G he “didn’t get a cent” from Afri-Oz and resigned after his relationship with Afri-Oz’s Australian directors turned sour.
Although Motseki was critical of former association leaders who allegedly used the organisation to accumulate wealth for themselves, he told the M&G he saw nothing wrong in holding private shares in Shiva Uranium.
He claimed he accepted the shares only after he was persuaded by his comrades not to resign from his current position within the association because he was not earning a salary from it. “In the MKMVA we don’t get salaries,” he said.
“The only person who was getting paid was the secretary general [current public services deputy minister Ayanda Dlodlo], until she was appointed as Zuma’s parliamentary councillor.
“I wanted to resign and go back to my previous job in the intelligence sector, but [association] comrades persuaded me not to,” said Motseki.
He told the M&G he was first offered a stipend of between R20 000 and R50 000 by Tony Gupta, who discovered he was not getting any salary from the association.
He rejected the offer because he did not want to be indebted to the Guptas.
“The fact that I did not agree to the stipend, gave them [the Guptas] a different perspective of black people in South Africa. To alleviate my burden, they said I needed to start a company that would generate income for me. The intention was that Dixie would have a stake whenever they [Guptas] struck a business deal.
“Most of the deals that they do are family deals. They have nothing to do with government. In Sahara, which does business with government, Dixie is not involved,” Motseki said.
Approached for comment this week, Gupta family spokesperson Gary Naidoo said: “Your questions are clearly a continuation of the malicious campaign by your newspaper to denigrate and cast aspersions on the Gupta and Zuma family members. We will play no part in this agenda.”
Duduzane Zuma was approached for comment but could not respond by the requested deadline.
Motseki acknowledged that past attempts by the veterans’ association to build a portfolio of investments had been “chaotic”.
“We would respond based on opportunities that arose ... it was a reactive rather than proactive investment strategy,” he said.
He alluded to association representatives doing private business in the organisation’s name.
“Companies would do business with individuals, thinking they were doing business with MK, but this was not the case. Then, when a comrade leaves MK, the business is still registered in their [private] name.”
The current executive committee resolved that “things would be different” after they took office in September 2007. “We wanted to focus less on being a general dealer and grab only strategic things,” Motseki said.
After another investment went wrong—the volume of business the association anticipated from a fuel supply contract with Central Rand Gold failed to materialise—it was forced into another rethink.
Three months ago, MK veteran Lawrence Maswabi volunteered his services as chief executive and a volunteer board of directors re-consolidated the association’s investments in a new holding company, Mbutho Investments.
Senior MK veterans and ANC figures were also appointed to oversee the MK Trust, which disburses funds to the organisation’s members.
Despite the association’s attempts to clean up its act, however, it appears that the organisational culture of highly placed individuals like Motseki doing lucrative private business on the sidelines continues.
Matuma Letsoalo and Mmanaledi Mataboge are senior political reporters; Lionel Faull is a member of amaBhungane, the M&G Centre for Investigative Journalism.