​State capture probe grinds to a halt under new public protector

'...there is no sign that new public protector Busisiwe Mkhwebane has the appetite to continue on the course set by her predecessor.' (Madelene Cronje, M&G)

'...there is no sign that new public protector Busisiwe Mkhwebane has the appetite to continue on the course set by her predecessor.' (Madelene Cronje, M&G)

The once fast-paced investigation into state capture has ground to a dead halt, insiders and the experiences of some state-owned enterprises suggest, and there is no sign that new public protector Busisiwe Mkhwebane has the appetite to continue on the course set by her predecessor.

A halt in the investigation will let off the hook, at least for the time being, four state-owned enterprises (SOEs), a foreign-owned bank, President Jacob Zuma, and his mining minister, Mosebenzi Zwane. All had been due to receive the same treatment that saw Eskom chief executive Brian Molefe resign under a cloud, down to the examination of cellphone and banking records.

Some, perhaps all, of those investigations will probably not proceed, insiders say, because of the “dynamics” of Mkhwebane’s leadership.

Whereas phase one of the investigation set off a storm of legal challenges and political denunciations, the State of Capture report released early in November was supposed to have been only a kind of introductory work for what former public protector Thuli Madonsela had envisaged as a two-phase work. Although a commission of inquiry delved into the evidence uncovered by phase one — with its focus on Eskom — the broad road map indicated that the public protector would continue to work on separate allegations that the Gupta family had undue reach into the machinery of the state.

But the very existence of the phase-two plan is now being questioned.

“The minister is unaware of a phase two of the investigation,” a spokesperson for Zwane told the Mail & Guardian.
“The public was advised that the public protector’s report was a final one.”

Meanwhile the SOEs that were to have been the focus of phase two said they had seen no sign yet of investigation. “Denel has not been contacted by the office of the public protector for the investigation you are referring to,” a spokesperson for the state-owned arms company said.

Transnet is “available to co-operate with the public protector’s office or any other forum designed to get to the bottom of the challenges we face as a nation,” that parastatal said.

Others did not officially respond but individuals with knowledge of events said there had been no visits from the office of the public protector, no requests or subpoenas for documents and no questions.

Mkhwebane’s office did not respond to repeated questions over the course of more than a week on the status of what was supposed to be an ongoing investigation.

State capture 2: SABC, Denel, Transnet, SAA, Eskom, Zwane, Zuma – and the Guptas

The State of Capture report points to the need for further investigation. But will it happen?

The previous public protector, Thuli Madonsela, envisaged the 355-page State of Capture report, released in early November, to be the first part of a two-phase investigation.

The exact plan for the follow-up investigation is not public and is now the responsibility of her successor, Busisiwe Mkhwebane.

But scattered throughout the phase-one report, in passing mention, are promises of seven definite lines of inquiry:

  • How the SABC, a public broadcaster, began charging government departments to act as conduits for them to reach the public, a service it had previously offered for free, and splitting this new stream of revenue with a Gupta-owned newspaper;
  • The relationship between the state-owned weapons company Denel and its Gupta-linked supplier, VR Laser Services, as well as the related (or completely separate, depending on who you ask) VR Laser Asia;
  • State-owned Transnet’s many large payments to the financial advisory companies Regiments Capital and Trillian, which had denied what appeared to be clear Gupta links, only to be found to have helped the family to pay for a coal mine;
  • State-owned airline SAA’s spending on the Gupta-owned New Age newspaper, such as buying, at last count, at least 5.9-million copies of the publication;
  • State-owned electricity company Eskom’s contracts with a Gupta-owned coal mine to supply its Majuba power station, after Madonsela’s phase-one report raised red flags about contracts with Eskom’s Arnot power station;
  • The apparently fast and loose manner in which the Indian state-owned Bank of Baroda dealt with mine rehabilitation trust funds held with it, and seemed to pretend it was lending a Gupta company money when it really was not; and
  • Whether President Jacob Zuma sanctioned the actions of his mining minster, Mosebenzi Zwane, when Zwane, according to the State of Capture report, may have used “his official position of authority to unfairly and unduly influence a contract for a friend or in this instance his boss’s son at the expense of the state”.

The report also hints that state financing of Gupta enterprises, such as a loan from the Industrial Development Corporation, could form part of the phase-two investigation, as could the awarding of mining licences to Gupta companies. — Phillip de Wet

Phillip de Wet

Phillip de Wet

Phillip de Wet writes about politics, society, economics, and the areas where these collide. He has never been anything other than a journalist, though he has been involved in starting new newspapers, magazines and websites, a suspiciously large percentage of which are no longer in business. PGP fingerprint: CF74 7B0F F037 ACB9 779C 902B 793C 8781 4548 D165 Read more from Phillip de Wet

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