Hawks’ eerie silence on Gupta files

The Hawks have wasted no time in pursuing the whistle-blower who exposed the Gupta hand in “Nenegate” – yet the elite police unit denied any knowledge of a string of corruption reports involving the controversial family.

The whistle-blower’s protected disclosure to the public protector entailed explosive detail of state capture, foreknowledge that finance minister Nhlanhla Nene would be replaced by ANC backbencher Des Van Rooyen in December 2015, and how the Gupta family and their business associates allegedly lined up deals to cash in on it.

Barely one month after former public protector Thuli Madonsela’s State of Capture report into the scandal was released, the whistle-blower’s former employer, financial advisory company Trillian Capital Partners, opened a criminal case against her. Trillian, majority owned by the alleged Gupta lieutenant Salim Essa, is central to the allegations of state capture.

Days after the case was opened, the Hawks asked her lawyers for a warning statement. A warning statement is usually a prelude to being criminally charged – an indication that the investigation is at an advanced stage and nearing its end.

The whistle-blower may not be named in terms of an order from the Commission for Conciliation, Mediation and Arbitration. Her lawyer, Daniel Witz, said they “understood that the criminal complaint against her includes allegations of fraud and contravention of the Electronic Communications Act, although we have not been formally presented with the charges yet”.

Witz said he found it “surprising” that his client was asked for a warning statement at “this early stage of the investigation”.

At the same time it seems that the Hawks have, for up to 18 months, been ignoring three damning reports fingering the Gupta family and their business partners for corruption.

On Thursday Hawks spokesman Brigadier Hangwani Mulaudzi said: “We are not aware of the three reports as indicated in your inquiry.”

But the reports were handed to the Hawks in terms of section 34 of the Prevention and Combating of Corrupt Activities Act (Precca). The Act requires any person in a position of authority with knowledge about criminal activities to report them to the relevant authorities. Failure to do so is a criminal offence.

They were submitted to the Hawks in August 2015, July 2016 and November 2016.

The Precca reports implicate the Guptas, Essa and their associates in corruption, fraud, a blatant scheme using The New Age as a money-laundering vehicle and the fleecing of state resources. The reports attach evidence, which allegedly backs the claims.

The allegations have previously been denied by Essa and the Gupta family. A spokesperson for the Guptas referred further questions to the Hawks.

Trillian said the allegations are “spurious and without foundation”.

Trillian chairman Tokyo Sexwale has commissioned Geoff Budlender SC to conduct an independent inquiry into the allegations.

All indications are that the Precca reports have been gathering dust at the Hawks’ headquarters in Pretoria. The M&G could find no evidence of a Hawks investigation into any of the three alleged corruption cases.

The M&G has spoken to seven people either implicated by the Precca reports or who said they had key evidence of wrongdoing. The Hawks have not interviewed any of them or asked for further evidence or supplementary affidavits.

“To be honest, I don’t feel the Hawks have done enough to investigate the matter,” said an author of one of the Precca reports. He spoke to the M&G on the basis of anonymity because he is not authorised by his company to do so.

“We weren’t interviewed or phoned for further evidence. The investigating officer said to me that the docket was sent to the National Prosecuting Authority [NPA] for a decision on whether to prosecute,” he said. “We submitted a supplementary affidavit on our own initiative, but haven’t heard from the Hawks since.”

The NPA could not find a trace of such a docket in their archives, said spokesperson Luvuyo Mfaku.

Trillian further confirmed that “neither Mr Essa nor [Trillion chief executive] Dr Wood have had any inquiries from any authorities in this regard”.

The apparent absence of an investigation into the three Precca reports – or apparently any investigation into the Gupta family – has also been confirmed by a senior Hawks official with knowledge of the unit’s projects.

“The complaints weren’t analysed and allocated because of the politics around the family,” the Hawks official said. This is confirmed by two mid-level Hawks officials in relevant departments.

The absence of a Gupta probe follows the public protector’s highly publicised report on state capture as well as revelations under oath by Finance Minister Pravin Gordhan of 72 suspicious transaction reports red-flagged by the Financial Intelligence Centre (FIC).

Mulaudzi said that “on the Financial Intelligence Centre matter we can confirm that we are investigating several matters which were brought to our attention”.

This contradicts a letter of January 17, signed by Hawks boss Lieutenant General Mthandazo Ntlemeza, which indicated the unit was not investigating the FIC transactions.

Though Madonsela made no findings in her state capture report, she brought the evidence gathered in her investigation to the attention of the Hawks.

The FIC has refused to provide further detail to the Hawks about the 72 re-flagged transactions, which would complicate a Hawks investigation.


Corruption reports’ content known but remain ignored

The content of the three Precca reports are not new revelations to the Hawks, strengthening concerns that they are reluctant to investigate the Guptas.

In August 2015 telecoms provider Neotel submitted the Precca report to the Hawks after its involvement in a Transnet kickback scandal was revealed. Neotel paid two instalments worth R41-million, including value added tax, to the Gupta-affiliated company Homix, which offered to secure a lucrative Transnet IT contract worth more than R300-million for Neotel.

After the revelations, in 2010 the Neotel board ordered an investigation, and the facts were widely publicised in the media.

The Hawks are not reliant on complaints from the public, but are empowered to initiate their own investigations.

More than a year later, in November 2016, another Precca report was submitted to the Hawks, this time by Regiments, a rival company of Trillian Capital Partners. It provides evidence that includes alleged fabricated invoices and service agreements. The attached documentation is alleged to point to a money-laundering scheme, in which R17.1-million was washed through the Guptas’ newspaper The New Age.

The report was leaked shortly after it was submitted to the Hawks and was widely publicised in the media.

The third Precca report was submitted to the Hawks in July 2016 by the business rescue practitioners of Optimum Coal Holdings and Optimum Coal Proprietary, referred to extensively in the State of Capture report.

Alerted by information revealed in media reports by amaBhungane and Carte Blanche, this Precca report alleges how a late-night teleconference meeting by Eskom officials saved the Gupta’s plan to acquire Optimum. Eskom is alleged to have agreed to prepay the Gupta company Tegeta R586-million for coal yet to be delivered. Eskom’s intervention filled Tegeta’s shortfall in the R2.15-billion deal. Eskom’s prepayment to help out the Guptas was also widely published in the media and the public protector’s report.

Note, February 3 9.30am: This story has been altered to include Mthandazo Ntlemeza’s accurate title.

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Pauli van Wyk
Pauli van Wyk is a Scorpio investigative journalist. She writes about the justice cluster, state-owned companies, state politics and the inescapable collision course they're on. Pauli cut her teeth at Media24. She became a journo at Beeld, was trained by the amaBhungane Centre for Investigative Journalism and joined Mail & Guardian's investigative team before becoming a member of Scorpio.

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