#StateCaptureInquiry: GCIS paid hundreds of millions to the Guptas

Government communication and information system (GCIS) paid R260-million to Gupta-owned media companies between 2011 and 2018, the judicial commission of inquiry into state capture heard on Monday.

The commission — chaired by Deputy Chief Justice Raymond Zondo — heard expert evidence from Jan Gilliland, an accounting officer at National Treasury. Gilliland was tasked by the commission’s investigators to figure out what payments were made by government departments to Gupta-owned companies Infinity Media and The New Age (TNA).

Gilliland told the commission that, after tracking and tracing amounts paid to the two companies through Treasury’s Basic Accounting System (BAS) he found that a total of R260-million was paid to a number of accounts under some variation of the names Infinity Media and TNA. The BAS is a database in which government transactions are recorded.

Around R12-million was transferred to Infinity Media and R248-million to TNA.

Gilliland found that payments were made to 11 separate accounts under the names of the two companies.

Gilliland’s testimony follows on from that of former GCIS head Themba Maseko and acting GCIS head Phumla Williams, who each gave evidence on the attempts made by the Gupta family and others to redirect the department’s budget towards the Gupta-owned entities.

Maseko detailed how he allegedly received a phone call from former president Jacob Zuma in 2010, asking him to aid the Gupta brothers with placing government advertisements in The New Age.

Maseko also alleged that Ajay Gupta had threatened to have him “sorted out” should he not co-operate with this demand. The Gupta patriarch had allegedly told Maseko that he could have him replaced with someone who would co-operate.

Gupta had demanded that he ensure that the GCIS’s entire media-buying budget of R600-million be spent on advertising in TNA, he said. GCIS secures media spots on behalf of government departments.

Maseko was unceremoniously terminated from his position at the helm of GCIS in early 2011 and replaced by self-professed Zuma loyalist Mzwanele Manyi. Williams’ testimony picked up from the day of this changeover.

READ MORE: #StateCaptureInquiry: Manyi was waiting to take Maseko’s place — Phumla Williams

Under Manyi’s leadership, tender processing was to be signed off by him and not the bid adjudication committee, she said. Manyi also demanded that the media buying division report directly to him.“Mr Manyi removed the internal audit which was reporting in my division and suggested that the internal audit must report to him directly,” Williams said.

Williams also testified that under the leadership of former communications minister Faith Muthambi, additional efforts were made to create the conditions at GCIS in which procurement processes could be flouted.

READ MORE: #StateCaptureInquiry: ‘Muthambi wanted to steal at all costs’ — Williams

Gilliland’s evidence demonstrated that there was a sharp increase in the amount paid to the Gupta-owned media entities between 2011 and 2013. In 2011, R7-million was paid to these companies and in 2013, they received R30-million from GCIS.

The New Age newspaper was launched at the end of 2010 and ANN7, which was primarily controlled by Infinity Media Networks, was launched in 2013. Maseko was transferred out of GCIS at the beginning of 2011.

Gilliland also found that there was a R39-million drop in the money paid to these entities between 2015 and 2017. These dates coincide with the former public protector’s investigation into allegations of state capture. In 2017, Ayanda Dlodlo took over as communications minister from Muthambi.

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Sarah Smit
Sarah Smit
Sarah Smit is a general news reporter at the Mail & Guardian. She covers topics relating to labour, corruption and the law.
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