Members of the Gupta family are on Thursday expected to apply for leave to appeal a ruling handed down in the South Gauteng High Court in Johannesburg which ordered them to return a luxury aircraft that they were leasing.
The interim order was handed down by Judge Fayeeza Kathree-Setiloane on March 19.
The Guptas lodged the application on March 23, a few days after the ruling.
Kathree-Setiloane’s order gave the Guptas 15 days to ensure that the aircraft, a luxury Bombardier Global 6000 business jet, is returned and held in a hangar at the Lanseria International Airport.
The company that owns the aircraft, Stoneriver, and Export Developments Canada (EDC), which financed the aircraft, had filed an urgent application to have Gupta-owned business Westdawn Investments Pty Ltd return the aircraft.
Oakbay Investments, another Gupta-owned entity, was the corporate guarantor for the aircraft, while Atul Gupta and his wife, Chetali Gupta, were the personal guarantors.
Matter still to be finalised
Stoneriver stated in the application that between October and December 2017, there had been a number of breaches of the lease agreement, and the company had terminated the agreement with Westdawn on December 13.
Stoneriver then instructed Westdawn to return the aircraft.
Westdawn refused, and challenged the notice to cancel the lease in the UK courts, leading Stoneriver and EDC to approach the South African courts to grant an interim order to have the plane grounded and stored until the matter was finalised in the English courts.
Kathree-Setiloane ordered that, pending the final determination of the case before the High Court of Justice (England and Wales), Westdawn had 15 days to return the aircraft, together with all equipment and additions, to Stoneriver and EDC, at Lanseria airport.
She said neither Westdawn, Oakbay nor the Guptas were allowed to use the aircraft, except for the purposes of returning it, and that Stoneriver and EDC were to keep the aircraft and maintain it, until the outcome of the overseas case.
Kathree-Setiloane also ordered that should they fail to comply, the South African Civil Aviation Authority would be instructed to cancel the aircraft’s registration with immediate effect, for the duration of the interim order.
It was one of the Guptas’ favourite cars up until they fled the country.
Every day, the bullet-proofed black Infiniti QX80 could be found parked outside Oakbay’s offices in Sandown.
But instead of being out in the sun for all to see, the multi-million rand luxury vehicle and its equally impressive mate, a black Porsche Cayenne, are hidden away in the corner of a parking lot of the Grayston Ridge Office Park in Sandown.
News24 visited the offices recently and saw the vehicles parked there. There were crates on the back seat of the Infiniti.
According to workers at the office park, the two cars were parked there around the time the Guptas were said to have left the country. And they haven’t moved since.
The pair is worth a few million.
A standard specification Infiniti QX80 retails for about R1.4m. But the vehicle found by News24 was worth considerably more, owing to the added security features. The additional bulletproofing, ballistic glass and run-flat tyres almost doubled the cost of the vehicle to a secure R3.2m.
Infiniti Melrose, the sole distributors of the Infiniti range of vehicles in SA, confirmed that a QX80 was sold to the Gupta-owned company Confident Concepts in late 2015.
However, staff were unwilling to divulge further information about the purchase price. Confident Concepts is one of several Gupta-linked companies that applied for business rescue earlier this year.
Quotations contained in the Gupta leaks emails show that the Guptas obtained quotes for an Infiniti QX80 in both B4 and B6 plating, amounting to R1.6m and R3.2m respectively.
Infiniti Melrose confirmed that the QX80 was outfitted with category B6 armour plating, sufficient to withstand fire from an AK47 assault rifle. Short of an attack from a high-powered rifle and dedicated armour piercing rounds, the occupants would be safe from most forms of fire.
Together, the two vehicles are worth an estimated R5m.
The Infiniti and Porsche just happen to be part of a court-issued restraint order obtained by the State under the Prevention of Organised Crime Act (POCA). The order was obtained by the Asset Forfeiture Unit (AFU) on April 11 and a large number of Gupta-linked assets was attached.
The assets are connected to the accused in the Vrede dairy farm case and in total are worth an estimated R180m.
The long list of assets included numerous houses, the most well-known being the compound in Saxonwold, as well as cars, coal mines, the private jets ZS-OAK and ZS-AKG, as well as helicopters.
The respondents include current and previous Oakbay executives Asha Chawla, Nazeem Howa, Varun Gupta and Ronica Ragavan, as well as Estina director Kamal Vasram. Their personal assets, including property and vehicles, were included in the order.
The court list also included bank accounts held at the Bank of Baroda and First National Bank amounting to R22m.
The order indicated that the respondents or any third parties who may be in possession of any of the property sought under the order must, under POCA, surrender the property into the custody of the appointed curator bonis.
“Any third party who is in possession or control of any of the property or who acquires knowledge of this order is also ordered to surrender such to the curator within 24 hours of being informed,” the papers read.
Clearly, nobody has handed over these two assets yet.
Shortly after the Saxonwold compound was raided by the AFU, the Guptas through their attorney Rudi Krause of BDK Attorneys, announced they would challenge the AFU’s restraint of assets order.
The Infiniti QX80 and Porsche Cayenne Diesel are listed under their owner Confident Concepts (Pty) Ltd in the restraint order as well as a number of other cars, including a Lamborghini Gallardo, Land Rover and BMW Rolls Royce.
Germany – German automaker Volkswagen is set to replace its chief executive Matthias Mueller Thursday, as it struggles to move on from the “dieselgate” emissions scandal that has mired the company since 2015.
The supervisory board of the world’s leading automaker will meet a day ahead of schedule and will announce its decisions in a statement, a source close to the company told AFP late on Wednesday.
Volkswagen on Tuesday announced it was considering reshuffling its board and replacing Mueller, in a move that sent stocks in the company surging.
Herbert Diess likely to take charge
Mueller had “signalled he was open to play a part in the changes” in conversations with supervisory board chief Hans Dieter Poetsch, the company said in a statement.
German business newspaper Handelsblatt and national news agency DPA reported Herbert Diess, head of the VW brand, one of the group’s 12 makes of cars, trucks and motorbikes — was slated to take Mueller’s place.
Mueller, a former chief executive of sportscar-building VW subsidiary Porsche AG, was brought in to replace Martin Winterkorn in 2015 and was contracted to serve until 2020.
Longtime CEO Winterkorn quit after the firm admitted to manipulating 11-million diesel vehicles worldwide to cheat regulatory emissions tests in a scandal that became known as “dieselgate”.
So-called “defeat device” software allowed vehicles to reduce exhaust pollution under test conditions, while in on-road driving conditions they emitted much higher levels of pollutants.
Buyback slated at $31-billion
Mueller has chivvied the mammoth carmaker into a massive restructuring, aiming to offer electric versions of many of its models and slim down its operations over the coming decade.
But he himself has landed in prosecutors’ sights over suspicions he may have known about the diesel cheating before it became public and failed in his duty to inform investors.
Dieselgate has cost VW more than $31-billion in buybacks, fines and compensation, and the carmaker remains mired in legal woes at home and abroad.
“The most important part of getting the crisis under control is over now, so it’s right for VW to look in a new direction,” judged analyst Juergen Pieper of Metzler bank.
Diess, known as a “very good cost manager” with experience at BMW, would be “the best solution as a successor for the next five years,” he added.
Robert Mugabe’s daughter Bona was at Harare’s international airport on Wednesday to see the arrival of a newly-acquired passenger plane bearing her father’s initials.
The Boeing 777, with the registration code Z-RGM, made a low fly past over Harare’s main Robert Gabriel Mugabe International Airport before it touched down early afternoon from Malaysia.
Pictures from the runway showed Bona Mugabe with her husband, Simba Chikore, who was aboard the plane and dressed in a pilot’s uniform. It was unclear if Chikore, a trained airline pilot, had been at the controls.
See pictures below
Chikore was chief operating officer at the debt-ridden Air Zimbabwe at the time a deal was reportedly sealed last year with Malaysia Airlines to purchase pre-used planes. He no longer holds that post.
State journalist Clarkson Mambo, tweeting from the airport, quoted Finance Minister Patrick Chinamasa as saying the Zimbabwe government had so far paid $35 million for two Boeing 777s. He said the government – now headed by President Emmerson Mnangagwa – plans to acquire six more smaller aircraft.
Debt-ridden Air Zimbabwe is currently banned from flying to Europe because of safety concerns.
Last year there was speculation the government of former president Robert Mugabe would try to create a new airline called Zimbabwe Airways so that it can resume flights on lucrative European routes.
Mugabe was forced to step down during a military takeover in November.
Facebook has suspended another data firm after allegations surfaced that it may have improperly handled users’ information.
The social media giant said it suspended Cubeyou pending an investigation. CNBC reported the data-analytics company was misleading users by saying information it collected through quizzes was for academic research, even though it was in fact being shared with marketers.
“These are serious claims and we have suspended Cubeyou from Facebook while we investigate them,” said Ime Archibong, vice president of product partnerships at Menlo Park, California-based Facebook, in an emailed statement. “If they refuse or fail our audit, their apps will be banned from Facebook.”
Chief Executive Officer Mark Zuckerberg is expected to testify before Congress this week, as lawmakers seek answers about users’ privacy on the site. Facebook has lost billions in market value since a whistle-blower revealed last month that political firm Cambridge Analytica was misusing consumers’ data. Last week, Facebook said that as many as 87 million users may have been affected by the Cambridge Analytica case.
Facebook reached the decision to suspend Cubeyou after CNBC contacted the company with the allegations. CNBC reported the suspension earlier Sunday.
Cubeyou’s website says it has more than 10 million “panelists” contributing consumer opinions, interests and traits throughout the U.S. and that it’s used by more than 1 500 marketers. The company, whose press releases have said it’s based in San Francisco with offices in Milan, didn’t immediately respond to request for comment left outside regular business hours.
San Francisco – Facebook said data on most of its 2 billion users could have been accessed improperly, giving fresh evidence of the ways the social-media giant failed to protect people’s privacy while generating billions of dollars in revenue from the information.
The company said it removed a feature that let users enter phone numbers or email addresses into Facebook’s search tool to find other people. That was being used by malicious actors to scrape public profile information, it said.
“Given the scale and sophistication of the activity we’ve seen, we believe most people on Facebook could have had their public profile scraped in this way,” the company said. “So we have now disabled this feature.”
Facebook also said data on as many as 87 million people, most of them in the US, may have been improperly shared with research firm Cambridge Analytica. This is Facebook’s first official confirmation of the possible scope of the data leak, which was previously estimated at roughly 50 million.
It has resulted in calls from legislators and policymakers for greater regulation of social media, helping to shave billion of dollars from the company’s market value.
“We didn’t take a broad enough view of what our responsibility was and that was a huge mistake. It was my mistake,” Facebook Chief Executive Officer Mark Zuckerberg said on a conference call with reporters. “We’re broadening our view of our responsibility.”
He defended the company’s advertising business model, confirmed he wants to stay in charge and disclosed no “meaningful impact” from an online campaign by some users to delete their Facebook accounts. Facebook stock rose almost 3% in extended trading, after closing at $155.10 in New York.
About 270 000 people downloaded a personality quiz app and shared information about themselves and their friends with a researcher, who then passed along the information to Cambridge Analytica, in a move that Facebook says was against its rules.
Facebook reached the 87 million figure by adding up all the unique people that those 270 000 users were friends with at the time they gave the app permission. Facebook made the new disclosure in an online posting Wednesday.
Cambridge Analytica, which worked for Donald Trump’s 2016 presidential campaign, said it licensed data on 30 million people, countering Facebook’s 87 million estimate. Cambridge Analytica said in a tweet that it “immediately deleted the raw data from our file server, and began the process of searching for and removing any of its derivatives in our system” after Facebook contacted them to let them know data had been improperly obtained.
Facebook says it will tell people, in a notice at the top of their news feeds starting April 9, if their information may have been improperly shared with Cambridge Analytica. But it still hasn’t independently confirmed if the firm currently has the data.
The revelation, and the subsequent media questions, hint at the grilling Zuckerberg will likely face when he testifies on the matter before Congress next week: How many other Cambridge Analytica-scale leaks of data are out there?
Zuckerberg, in Wednesday’s call, said he couldn’t be sure. “We’re not going to be able to go out and find every single bad use of data, but what we can do is make it a lot harder for folks to do that going forward,” he said. “I think we will be able to uncover a large amount of bad activity that exists.”
The company has been embroiled in controversy for weeks over the revelation that data was shared and then not deleted. It raised questions over the information Facebook compiles on users, makes available to third parties, and what happens to it afterward. Facebook made the announcement along with an update on its plans to restrict data access through its platform.
Zuckerberg defended gathering user data for a business model that lets advertisers use Facebook’s information and targeting tools to reach specific audiences.
“People tell us that if they’re going to see ads they want the ads to be good,” he said, noting that requires keeping track of what people are interested in.
Either way, he thinks he should remain at the helm of Facebook. “I think life is about learning from mistakes and figuring out what you need to do to move forward,” he said.
Property mogul Pam Golding passed away at the age of 90 on Tuesday.
She was the founder of Pam Golding Property Group.
Golding died peacefully at her home in Wittebomen in Constantia, Cape Town, according to a statement from the Golding family.
Golding began her property empire in 1976, a time when the real estate industry was described as “male-dominated”.”She quickly identified a niche in the market for a discreet and professional property agency in South Africa, in the process building a reputation for selling the country’s most luxurious homes and building integrity, trust and respect of the Pam Golding Properties brand,” read the statement.
Golding then opened up an office in London in 1986 and eventually expanded the business further abroad with her son and chief executive Dr Andrew Golding.
The company now has over 300 offices in Africa, Germany, France and Mauritius.
Last year, the property group received recognition as the Best Real Estate Agency in South Africa and Africa at the International Property Awards in Dubai.
It is the most awarded real estate company in South Africa and has won the award for Best Estate Agency in South Africa 10 times since 2005.
The company has been run by Dr Andrew Golding since she retired a few years ago. However, she remained the company’s Lifetime President.
“Admired and respected by clients and dearly loved by colleagues, agents and staff alike, her natural warmth and sincere interest in everyone she encountered were trademark characteristics which endeared her to all,” said the statement.
Golding is survived by sons Peter and Andrew, daughter Jilly and 10 grandchildren.
There is a classic con-move called the “bait-and-switch”, in which one product is advertised but another is substituted that is inferior, more expensive or both.
At Transnet, the Guptas and their fellow-travellers pulled off a R4.8 billion bait-and-switch that was so impressive that it must have convinced their Chinese clients that the family held the keys to Transnet’s coffers – and to the huge 1064 locomotive tender that was on the cards.
In Part 1, we revealed allegations of how the family’s agents boasted of their ability to control government decision-making – and how they were paid a 20% commission by China South Rail (CSR) on a deal to buy 95 electric locomotives that Transnet signed in October 2012.
But the evidence suggests that the Guptas cemented their claims to be Transnet tender kings a year later. Between October 2013 and January 2014 they were able to redirect a new deal for 100 “heavy-haul” locomotives that seemed to be in the bag for one manufacturer – Mitsui – across to their friends at CSR.
For that service, CSR agreed to pay a 21% commission, promising the great manipulators more than R900 million in kickbacks.
The 100 loco deal
The chain of events around the 100 locomotive procurement seemed tailor-made to demonstrate the family’s remarkable audacity and influence.
The Guptas were able to reverse a clear preference by railway management for the Japanese manufacturer Mitsui, which had made a major investment in a South African fabrication facility and had a modern heavy-haul locomotive that was already performing on Transnet’s coal export line.
Instead, without an open tender, the Guptas were able to substitute CSR despite the fact the procurement was deemed urgent and the Chinese company did not have an off-the-shelf heavy-haul locomotive suitable for South African conditions.
The role of Iqbal Sharma – then the chair of Transnet’s Board Aquisition and Disposal Committee – appears to have been central.
Sharma, who readily admits a previous friendship with Gupta lieutenant Salim Essa and a range of business ties with the Guptas before they fell out, has denied wrongdoing.
Also key was then Transnet chief executive Brian Molefe.
Molefe was presented with a detailed outline of his role, but responded only briefly, claiming he had no knowledge of any kickbacks or manipulation of adjudication processes.
You be the judge.
The documented sequence of events is as follows.
Friday, 11 October
On 11 October 2013, the then chief executive of the Transnet Freight Rail division, Siyabonga Gama, circulated a document calling for the procurement of 100 heavy haul electric locomotives from Mitsui via a “confinement” – which meant the direct negotiation of the purchase with Mitsui without going out on a competitive tender.
Such confined procurement procedures are allowed in an emergency or where there is a “single source” supplier – or where a public entity seeks to extend an existing procurement contract.
Gama’s motivation for the confinement was the delay in the procurement of 1064 locomotives for Transnet’s general freight business, creating, he argued, a temporary gap in the fleet.
The motivation noted: “The heavy haul 100 Class 19E locomotives will be deployed in the Coal Export Line and will release 125 locomotives that will be used on [general freight] pending delivery from the 1064 program.”
In other words, drafting in 100 new high-powered coal line locos would release 125 older models closer to their retirement age to be used in general freight while the new locos were still coming on stream.
Gama pointed out that the 100 coal-line locomotives formed part of an already approved “fleet plan”. In other words, they were already budgeted for.
Motivating for the confinement to one supplier, Mitsui, Gama argued Transnet would not be able to meet its aggressive freight targets without this emergency procurement.
He noted the Mitsui locomotives would in effect be an extension of an earlier supply contract of the same design. They were already “operating optimally and have exceeded their design parameters”.
He argued that re-starting Mitsui’s local production lines would be quick; jobs would be retained, delivery times would be minimised and set up costs reduced.
Gama said Transnet would demand 60% local content and set a target price of R34.3m per loco.
Gama’s document was addressed to Sharma’s Board Acquisition and Disposal Committee.
Monday, 14 October
Sharma was not impressed. On the contrary, evidence from the #GuptaLeaks shows he sought to derail the proposal by raising doubt about the justification for the confinement.
He portrayed this as a matter of principle, but later events suggest it was a pretext – he raised no objections when the Chinese were chosen by a confinement that was far more arbitrary than the Mitsui proposal.
Sharma went over the board’s head, drafting a letter dated 14 October 2013 to then director general of public enterprises, Tshediso Matona.
Setting out his objections to Mitsui, Sharma wrote: “I cannot accept the argument [Transnet Freight Rail] makes that the urgent requirement is due to the late tender of the 1064 locomotives as it was well known that the tender was delayed from July 2012, yet for 15 months they did nothing…
“I am further concerned that the confinement relates to the same company that previously was awarded contracts by Transnet by way of a confinement… They will be presenting their case to [the acquisition and disposal committee] again on October 21, 2013, and it is for this reason that I seek your guidance and opinion on the matter.”
Was Sharma acting as a cats paw for the Guptas to derail the Mitsui bid? He denies it, but the leaks show him coordinating his approach with Saxonwold.
On the same day, 14 October, Sharma forwarded to Tony Gupta an email from Eric Wood of Regiments Capital relating to a R5bn capital raising proposal for Transnet.
And there was more.
Thursday, 17 October
According to the #GuptaLeaks, Sharma sent another email to Tony Gupta three days later, on 17 October 2013, to which he attached his letter to Matona, the DG.
The leaks show he also attached a draft response in Matona’s name in which the DG purported to urge the committee to reject this procurement via a confinement. Metadata show the draft response to have been written on Sharma’s computer.
But Sharma denies sending this email.
He told amaBhungane: “I did not send the purported email to Tony… I can confirm that at least two emails attributed to me were not sent by me. I will substantiate this in an appropriate forum.”
Sharma does not explain why someone would have hacked his email to send his Matona letter to Tony Gupta.
Sharma’s explanation for his decision to write to Matona is that in June 2011, then-minister of public enterprises Malusi Gigaba was upset because he was confronted in parliament with a media report that Transnet had secretly concluded an earlier locomotive deal via confinement with Mitsui. The report also questioned the political connections of Mitsui’s empowerment partners.
Sharma says Transnet chairman Mafika Mkwanazi relayed the minister’s displeasure at a subsequent board meeting.
“Recalling the incident of June 2011, the [acquisition and disposal committee] deliberated on the matter and the ‘urgency’ reason did not seem plausible… Management was sent back to improve their submission…”
Sharma says one member of the board committee disagreed vehemently with his view, so he decided to seek external guidance from the shareholder: “Hence my letter to the DG.”
Sharma and Matona are former colleagues from the department of trade and industry and Sharma describes Matona as a friend.
Matona has confirmed receiving the letter from Sharma but denied knowing of the draft written in his name.
Friday, 18 October
The evidence shows Sharma tried to drive home the supposed political exposure of Mitsui’s empowerment partners by sending Matona a follow-up email on 18 October 2013 in which he copied the 2011 article that he said had embarrassed Gigaba.
In 2006 Mitsui linked up with, among others, Dr Khulu Mbatha and Zolile Magugu.
In 2013 Mbatha was a special advisor to then deputy president Kgalema Mothlanthe, but in September that year, he had resigned his directorship in the company that had a 20% share in Mistui’s local empowerment vehicle.
Magugu had previously been an advisor to deputy president Phumzile Mlambo-Ngcuka, who had left government way back in 2008.
It seems rich that Sharma was concerned about these political links, given that he was in bed with the family that a few months earlier had landed their wedding guests at Waterkloof Airforce base.
And there is more evidence that suggests his real intent was to conspire with Saxonwold to hijack the 100 loco procurement process.
Saturday, 19 October
The #GuptaLeaks show that on Saturday 19 October 2013, Sharma emailed a copy of Gama’s Mitsui procurement motivation to Gupta lieutenant Ashu Chawla with a request: “please print”.
That motivation contained information that was highly sensitive in terms of Transnet’s internal decision-making and pricing.
Sharma admits sending this, but denies that he betrayed his fiduciary duty to Transnet by sharing the 100 loco motivation document with the Guptas via Chawla: “I did send an email to Ashu Chawla to print a document for me, as I was going to see him and wanted to have a hard copy to read.
“I saw no issue in doing so as Ashu’s function was like a PA/Secretary and I knew him. Had my intention been to send it to Tony, I would have done so directly.”
But the #GuptaLeaks show that Chawla was no secretary, but the chief executive of the Gupta’s Sahara Systems as well as a trusted intermediary for many of their more sensitive communications.
Sunday, 20 October
On Sunday 20 October, Matona replied to Sharma’s expression of concern about the confinement.
His response is more nuanced than Sharma’s ghosted letter, but it echoes the negative sentiments, despite Matona having, by his own admission, no access to the relevant facts.
Monday, 21 October
We do not have a copy of the minutes of the acquisition and disposal committee meeting of 21 October, but it is understood that Transnet chief executive Brian Molefe withdrew Gama’s Mitsui memorandum on that date.
The minutes of the following meeting on 21 November 2013 refer to decisions flowing from the previous meeting concerning the 100 loco proposal, including that certain information was apparently shared only with the committee chair – Sharma.
The minutes do not reveal what this information was, but it seems likely it included Matona’s letter. What we do know is that the minutes recorded that “incumbent parties identified in the confinement process were removed”.
Mitsui was gone.
Sharma has defended his actions, telling amaBhungane: “I have always acted in the best interest of Transnet and stand by my reasons for not supporting the Mitsui confinement… It is false for you to suggest that Mitsui was overlooked so that the tender would go CSR.
“All procurement submissions are generated by the Executives… As non-executive independent Directors who attend one meeting a month we did not have the aptitude to interrogate the technical details of the matter, nor was it our role to do so.”
Transnet told amaBhungane the company “was not made aware of Mr Iqbal Sharma’s alleged conflict of interest” in the 100 loco contract: “The Chairperson of the Board of Transnet at that time launched an investigation on the matter. Before these matters could be extensively dealt with, the term of the Board expired.”
The Great Switcheroo
Just two months later, on 24 January 2014, Molefe submitted a new confinement motivation to a special Transnet board meeting – except this time CSR was substituted for Mitsui.
The document is understood to have been drawn up in a hurry and appears to be largely a cut-and-paste of Gama’s Mitsui motivation.
Molefe’s motivation in favour of CSR artfully echoes Sharma’s concern about supposed political risk, noting: “Reputation risk exists, although subjective and places the company under unnecessary risk if it were to follow a confinement approach with Mitsui.
“This reputation risk involves speculation in the media around Mitsui’s local partners and their political affiliations. Transnet would never entertain awards based on the political prowess of any business partners… but the risk does need to be taken into account…”
A source involved in the Mitsui bid, who asked not to be identified, said Transnet never raised this “risk” issue with the company.
Mitsui in Japan were sent detailed questions but declined to comment, citing a confidentiality agreement with Transnet. The company has since significantly scaled down its office in South Africa.
Mbatha, their one-time empowerment partner, said the Japanese style was to walk away.
“They were in negotiations with Transnet to extend the earlier contract. Then, all of a sudden, Transnet just disappeared.”
It is understood that the concern regarding Mitsui’s supposed political exposure was never raised formally with the company.
Mbatha said: “There were rumours about concerns because people were politically connected. We would have welcomed an investigation… because I never lobbied anyone – at Transnet or in government… Instead of an investigation, we just heard this tender was given to the Chinese. I was very much shocked.”
Mbatha says some in the consortium wanted to fight the decision, but the Japanese business culture meant they would not say anything openly: “Even now with the email leaks – when it’s become quite clear why we lost the tender – they won’t budge.”
In his re-tread version of the Gama’s earlier Mitsui confinement application, Molefe also swept aside Mitsui’s proven design, arguing that “the Mistui consortium did not fare well in the two most recent tenders issued by Transnet”.
These were the 95 and 1064 tenders, the latter which was reaching its conclusion by January 2014. Of course, it bears noting that the consortium that did fare well in both cases – CSR – was later shown to have paid massive “commissions” to the Gupta network.
It should also be noted that records show Essa, the Gupta lieutenant and Sharma associate, arriving for a lightning visit in Hong Kong on 9 January 2014 – shortly before Molefe submitted the CSR proposal on 24 January.
It is known that CSR Hong Kong signed a 21% commission contract on the 100 loco deal but it is not known exactly when.
As with the 1064 deal, it is understood that CSR first signed the commission agreement with a company that the Guptas appeared to use as a partner to launder their money – JJ Trading in Dubai – but later updated the deal with Essa as the signatory.
Sharma’s discomfort about a confined tender also did not rear its head again now that CSR was involved.
It may be significant that on 19 December 2012 the Gupta company Aerohaven is reflected in the leaks as having instructed its bankers to transfer R20m to “Iqbal Meer Sharma”.
It is not known if this occurred, but it seems likely this was a loan to fund his stake in the purchase of VR Laser, a steel cutting business that would have been an ideal subcontractor for locomotive fabrication. Sharma has denied that VR Laser intended to do Transnet-related work, but this is contradicted by other evidence. He did not respond to a later question about the R20m.
Molefe’s request to the Transnet board to confine the bid to CSR was still based on “urgency”, despite the fact that CSR did not have a proven, ready-to-roll product.
As one industry insider explained: “Because of our narrow gauge, there’s no such thing as off-the-shelf. Everything has to be rebalanced.”
Part of the motivation for selecting Mitsui in the first place was that Transnet could simply order a new batch of Mitsui’s 19E locomotives which were already operating on Transnet’s lines.
“Mitsui was a known design you could just continue with production; there would be very little delay. CSR did not have a heavy-haul loco. You had to add months’ delay to design one,” a second industry expert explained.
Somehow this was not a problem. No one objected to CSR being substituted for the same kind of contract where Mitsui had been rejected, despite the fact there was a much stronger case for Mitsui.
Transnet’s board approved the uncontested award for 100 Electric Locomotives to CSR the same day, 24 January 2013, at an estimated cost of R3.87bn.
Note that price.
As anticipated, the new locomotive had to be redesigned as an upgrade from the 22-ton axle-load engine that CSR had developed for the 95 loco contract.
The first prototype CSR loco delivered as part of the 100 loco contract only rolled off the Chinese assembly line on 16 September 2014 and these locomotives were accepted into operation only by November 2015.
The second industry expert said: “Why was it confined when it was not an off the shelf product? It basically put Mitsui out of business here, losing that contract…”
The Mitsui operation, which had manufactured the 19E at Union Carriage & Wagon in Nigel since 2009, was largely wound down. Contractors like Dorbyl and were also hard hit.
“It was devastating,” former managing director of Union Carriage Louis Taljaard told us. “They [Union Carriage] were without work for quite a long period of time. Especially if that could follow on after they’ve had the other locomotives you would have retained more skills, you would have had a company that was making more profit. But the effect on Dorbyl was equally bad. Because supplying [locomotive] bogies [to Mitsui] was a big part of their business.”
By contrast, according to Transnet’s own figures, 40 of the 100 CSR locomotives were produced in China and only the remaining 60 locomotives were “assembled” at Transnet’s Koedoespoort yard, suggesting CSR came nowhere near the 60% local content requirement.
But Transnet’s questionable decision to substitute Mistui with CSR also came with a heavy price tag.
While 10% upfront payments are standard in the rail industry, Transnet paid an exceptionally high 30% advance to CSR on 1 April 2014, shortly after the contract was signed – amounting to a staggering R1.32bn.
amaBhangane has established that another 30% was due on 1 October 2014 when the design for CSR’s new locomotive would be approved, with only 37% of the price being withheld for formal acceptance of the physical locomotives and 3% for retention – a scenario that the first industry expert described as “crazy”.
What that means that by the time the first prototype was delivered, the Guptas and their associates were due to have received more than R554m in terms of their 21% commission.
“Escalation” – or kickback?
On 10 April 2014, Mkwanazi, the then Transnet chairperson, directed a memorandum to Gigaba, copied to Matona, in which he sought so-called “section 54 approval” under the Public Finance Management Act for the confinement to CSR.
Just three months after a price of R3.87bn was approved by the board, the price had now risen to R4.84bn.
Mkwanazi claimed this was because of: “Entering into a fixed price contract thereby shielding the Company against any potential deterioration of the Rand against the US Dollar”; an escalation in labour and material costs; and something mysteriously labelled “forward looking trends”.
Mkwanazi declined to respond to queries for this article.
He said: “I suggest you publish what you have and I will respond through Transnet after the publication. The so called allegations against me will be responded to by Transnet.”
But Transnet would only say: “Transnet cannot comment on alleged activities that took place outside of working parameters of the individuals mentioned in your query.”
Gigaba recently told parliament that ministers were not involved in procurement at all. He claimed section 54 approvals were based on “in principle approval” of projects above a certain size, but the minister was not privy to who the bidders were.
On the 100 loco deal, he said: “I did not know who was involved in the bidding process, and therefore interfered in no way.”
But the section 54 documents show Gigaba was informed that the bid was via a confinement, that CSR was nominated – and that the cost had inexplicably risen from R3.87bn to R4.84bn.
He gave his approval.
In fact, the R970m increase motivated by Mkwanazi neatly provided for the R924m “commission” that CSR had agreed to pay the Guptas and their associates.
The Chinese paid – and the Guptas delivered.
There would be no argument about their ability to swing the 1064 contract.
Part 3 will show how.
South Africa’s borders need to be open for people – particularly Africans – to move more freely and to promote business, President Cyril Ramaphosa has said.
He also reiterated the need for a single currency on the continent.
Ramaphosa told journalists following a summit on the African Continental Free Trade Area on Wednesday that “the easy movement of people across borders and countries should never be seen in a negative sense by us as South Africans”.
He said he discussed this matter with Rwandan President Paul Kagame in their bilateral on Tuesday. “There is a deep yearning in Rwanda and the region for this visa matter to be resolved, and we need to open up the borders of our country and allow people to move,” he said.
South Africa and Rwanda have had strained relations since 2010, and in 2014 diplomats from both sides were suspended after a Rwandan opposition leader was murdered in South Africa. This also meant the South African visa office in Rwanda was closed and Rwandans had to travel outside the country to get visas to South Africa.
Ramaphosa on Wednesday signed the Kigali Declaration, signalling South Africa’s commitment to moving towards a free trade area in the continent, but it stopped short of signing the actual African Continental Free Trade Area agreement and the Protocol on the Free Movement of People because of outstanding internal legal issues and Constitutional processes that needed to be followed.
Ramaphosa said the free trade accord would mean that other countries, like Rwanda, could come do business in South Africa, and vice versa. “Because when they come, they come with money. They bring dollars to come and invest in South Africa,” he said.
Some also came to learn in South Africa, while South Africans went out to study and learn from other countries, like Rwanda.
“So movement of people does not only mean people are coming to South Africa to take our people’s jobs. It also needs to be seen in another dimension that we are sending companies here (to Rwanda) to do business, to trade and to learn new skills. And as it is now, Rwanda has a lot to teach us. They have developed so quickly and got out of the total disaster they had 20 years ago and they are a completely transformed country,” he said, with reference to Rwanda’s genocide.
He said the movement of people should be looked at “in a positive sense that people, as they move, got something to contribute. And similarly when we move as South Africans, we move to other countries, we know that we have something to contribute, so let’s treat them like we want to be treated.”
Ramaphosa also said businesspeople on the sidelines of a forum on Tuesday had called for a single currency. He said he agreed that this would help trade.
“Africa is developing in a wonderful way, further on this economic journey, and we will be beginning to interface with the notion and the idea of a single currency. Some even suggested a digital currency, and it is possible that a digital currency will even precede a real single because it is easier done than having a proper full currency,” he said.
Ramaphosa said it was still early days, but it meant Africa was opening up a range of economic opportunities and has moved beyond sloganeering.
Altogether, 44 countries signed the African Continental Free Trade Area agreement in an elaborate ceremony on Wednesday, 43 signed the Kigali Protocol committing to working towards such a free trade area, while 27 signed the Protocol on the Free Movement of People.
Two of the continent’s biggest economies, Nigeria and South Africa, did not sign the free trade agreement because they needed to complete internal processes and consultations.
The Guptas are well known for their alleged role in state capture in South Africa. But the #GuptaLeaks show how Gupta lieutenants allegedly went about capturing an Indian aviation company.
Heritage Aviation is an Indian aviation company with no apparent direct links to the Guptas or South Africa. The company was formed in 2009, operating mostly chartered pilgrimage and temple tours from a small helipad in the unfortunately named town of Guptkashi.
But the leaked Gupta emails show how its sole director, Rohit Mathur, was duped, browbeaten and eventually strong-armed into giving up control of Heritage to the Guptas.
A fiddling enterprise
To set the scene, we take a step back. Last year, News24 journalists Pieter-Louis Myburgh and Angelique Serrao attempted to crack open the City of Shells. Tellingly, it was what they didn’t find in Dubai that was of significance: of the six Gupta associated companies linked to Dubai, only one, Griphon Line Trading, had an actual office. And even that office appeared permanently closed.
Dubai is a low-disclosure jurisdiction, which means obtaining official records of company shareholding and directorships is extremely difficult, if not impossible.
One of the shell companies News24 journalists could not find in Dubai was Fidelity Enterprises Ltd. Fidelity was traced, using information in the #GuptaLeaks, to Al Quoz, an industrial district in the western reaches of the city. There the trail went cold among the dusty warehouses: locals had never heard of Fidelity, nor did they have any idea where its business address was.
Except for a brief mention in Oakbay Resources and Energy’s pre-listing documentation, no apparent links exist between the businessmen from the rural town of Saharanpur and Fidelity.
Until the #GuptaLeaks.
Fidelity is first mentioned in the #GuptaLeaks in a string of dodgy transactions between Gupta-linked companies starting June 1, 2011. SES Technologies (SES), another Gupta-linked company based in India, transferred US$400 000 to Fidelity, with the payment confirmation sent to Ashu Chawla. Chawla was a director of SES at the time and a known Gupta lieutenant. On February 15, 2018, Chawla appeared in the Bloemfontein Magistrate’s Court on charges relating to the Estina dairy farm, where millions in state funds intended for developing emerging farmers were funnelled to the Guptas.
A relationship between Fidelity and the Guptas could also be witnessed in several other transactions. A US$1m payment was made to Oakbay Investments on March 5, 2014. An unsigned loan agreement was sent to Gupta lieutenant Ronica Ragavan’s JIC Mining email address. In the agreement Fidelity undertook to lend $15m to an as-yet-to-be-identified borrower. It is clear from the #GuptaLeaks that service providers were frequently requested to invoice Fidelity for trips undertaken by the Gupta brothers.
In February 2012, Gupta-owned Sahara Computers paid Fidelity US$1m for “software”. A few days later Sahara paid another US$180 000 into Fidelity’s dollar account, as well as EUR320 000. Considering the exchange rate at the time, Sahara paid Fidelity at least R12.2m in February 2012 alone.
Not bad for a business without an address.
Fidelity’s lofty aviation aspirations took off in mid-2014. On June 6, 2014, Fidelity sent a letter of interest to Green Lane Capital Corporation. This expressed Fidelity’s interest in purchasing a 2005 Agusta A109E helicopter.
Agusta A109E helicopter
While Fidelity had an aircraft, it still needed an operator in India licensed to use the helicopter over there.
Heritage Aviation, headquartered in India, had previously managed another aircraft on behalf of Sahara Computers. Sahara leased its Beechcraft King Air B300 (bearing registration number VT-ACD) airplane to Indian company Air Charter Services. Heritage was without a licence at the time, and was mainly responsible for the logistical arrangements around the aircraft.
After obtaining its own licence in May 2014, Heritage Aviation’s Mathur requested Ajay Gupta “to kindly give me an opportunity about the lease of aircraft to my company so that I can start the procedure in DGCA (director-general of civil aviation) immediately”. The director-general of civil aviation supplied a no-objection letter to Heritage Aviation on October 9, 2014, giving it the green light to operate.
The problem was simple: Fidelity had the aircraft, but needed an operator in India; Heritage had an operator licence, but needed aircraft to fly. Their solution was to have Fidelity lease its aircraft to Heritage, thereby securing Fidelity an income while allowing Heritage to pocket any profit it made after the cost of the lease was accounted for. Heritage would fly charter services, charging wealthy individuals for the privilege of private flights.
Fidelity was greedy: as a foreign company, Fidelity would be taxed 25% of the lease revenue in terms of Indian tax legislation. Its tax obligations could be reduced to only 10% if the transactions were funnelled through a permanent account number (PAN) member. As Suresh Tuteja, former chief financial officer of Sahara Systems in South Africa, pointed out in correspondence to Chawla, Fidelity either had to apply for a PAN itself, or make use of another entity that was already a PAN member.
On October 16, 2014, Gupta lawyer Martinus van der Merwe, of the firm Van der Merwe and Associates, supplied Chawla with a new lease agreement between Fidelity, Heritage and Islandsite Investments 180. This appears to be an attempt to structure the agreement as per Tuteja’s instructions. Islandsite is a Gupta investment holding company, and owns, among others, the Guptas’ Sahara building in Midrand and the family’s R17m Constantia compound in Cape Town.
The plan was abandoned when it became clear that Islandsite would be in the same position as Fidelity in terms of its tax obligations, and that Heritage had already informed aviation authorities that the aircraft would be leased from Fidelity.
The deal was decidedly global. The seller was in the United States. The buyer, a company in Dubai, managed from South Africa. An operator was waiting in India, eager to take on the helicopter waiting in Rio de Janeiro. The contractual wrangling between Green Lane Capital, various brokers, Fidelity and eventually Heritage was facilitated by the Guptas’ lawyers in South Africa at the time.
Heritage’s Mathur attempted to negotiate better terms for himself and his company in respect of the lease agreement.
His attempts were shut down by Chawla and Tuteja. On November 24, 2014, Tuteja drafted an email to Mathur on behalf of Chawla.
“I am really surprised to receive your mail in which you mentioned that you need below mentioned amendments in the signed agreement which you have already signed and received from FEL (Fidelity). Now once the helicopter is in transit you need the amendment in agreement without any reason for it.”
Fidelity and Heritage finalised the lease agreement on Chawla and Tuteja’s terms on January 20, 2015. Heritage would lease the aircraft for 20 million rupees per annum, payable in quarterly instalments of 5 million rupees. This equated to R3.6m per year, payable in quarterly instalments.
At around the time that Mathur signed the lease agreement for the Agusta helicopter, Chawla and Tuteja were engaging Airbus Helicopters to purchase another two aircraft. On February 21, 2018, Airbus invoiced Fidelity Enterprises for two Airbus AS350 B3e helicopters. The purchase price for the aircraft was just short of R51m and R2.5m was paid to Airbus on February 23, 2015, securing the brace of aircraft.
One of the AS350 B3 helicopters, with the proposed white and gold colour scheme.
On March 7, 2015, Mathur once again attempted to negotiate better terms in respect of the lease agreement between Fidelity and Heritage.
“I don’t want to make any commitment to you which becomes difficult for us to honour. I am also providing first 50 hours as absolutely free of flying charges. Therefore Rs 2.5 Crores (25 million rupees) lease will be too much for my company and so I will sincerely request you agree to my suggestion,” he pleaded.
Chawla and Tuteja pushed ahead remorselessly.
At the same time, Chawla and Tuteja arranged for Heritage to take over the lease of Sahara Computer’s Hawker Beechcraft Beechjet 400XP for another 7.5 million rupees per annum.
The aircraft was transferred from Lanseria’s Execujet (using registration number ZS-POT) to Heritage Aircraft (using registration VT-HBX). Heritage entered into a lease agreement with Sahara Computers at 7.5 million rupees per annum. The transfer was concluded in mid-2015.
Sahara’s Beechcraft Hawker 400XP (ZS-POT) in flight. Credit: User “Photon” (www.avuser.co.za)
The final lease agreements saw Heritage coughing up US$400 000 to lease each of the two B3s, 5 million rupees per year for the Agusta and another 7.5 million rupees per year to lease the Beechcraft. Heritage had been bound to a total annual obligation of almost R25m per year towards the Guptas.
Brace for impact
Between November 2014 and June 2015, Fidelity engaged Heritage with a view to establish a joint venture between the two companies. It made business sense: Fidelity had planes, and Heritage had the licence needed to operate in India the planes it had leased from Fidelity.
From correspondence in the #GuptaLeaks, it is established that Heritage insisted on a 50/50 partnership. Ajay Gupta, Chawla and Tuteja were however pushing Mathur to settle for a 51/49 partnership in their favour, in essence giving them control over Heritage. On April 6, 2015, a final joint venture agreement was sent to Mathur. He appears to grudgingly agree to the 51/49 ownership.
It is unclear if the joint venture went ahead. But on September 12, 2015, Heritage hit turbulence.
In a letter dated September 11, 2015, addressed to Heritage, Fidelity informed Heritage it was in breach of the lease agreements it signed. Fidelity required Heritage to pay 15 million rupees and US$400 000 in terms of the first and second lease agreements respectively, within three days. Should Heritage fail to pay, Fidelity would terminate the lease agreements and inform the DGCA, resulting in a termination of Heritage’s operating licence. Heritage had to find a way to pay nearly R9m within three days, or lose everything upon cancellation of the leases.
Four days later Tuteja and Naresh Khosla, a former employee of Sahara Computers in India, met with Mathur, and attempted to convince him to hand over his financial control of Heritage to Tuteja. Mathur would only be allowed to keep operational powers.
“Tuteja ji also… threatened in a subtle way that if I don’t agree to his suggestion, bosses will take a decision on closing the operation,” Mathur confided to Chawla later that day. Chawla promptly forwarded the message to Tuteja.
“When we were discussing final points of JV [joint venture] with Ajay Sir around 22 April you were also on the phone line. Ajay Sir told me that I must agree for giving 51% stake to Sahara and in return all management rights will always remain with me. I am very eager to understand why after 1 – 2 months of getting NSOP (operator permit) I am being pressured to give away financial powers. Why there is a drastic change in your stand?” The response and eventual agreement reached with Mathur is not clear.
It was a case of Heritage needing Fidelity’s aircraft more than Fidelity needed Heritage to operate them. While Fidelity could easily lease its aircraft to another operator, Heritage was entirely dependent on Fidelity’s aircraft for its income. Heritage could either agree to the Guptas’ demands, or stand to lose its sole means of generating revenue while still owing millions to Fidelity.
Disarm doors and crosscheck
Less than two months later, Indian company records show Mukul Tekchandani was appointed as a director of Heritage Aviation. Tekchandani is also a director of SES Technologies, a company directed by Chawla’s wife, Harsh.
In the weeks following his appointment, Tekchendani sends weekly financial reports and cash flow statements to Chawla. Mathur’s correspondence dwindles and is limited to operational matters – pilot’s salaries, maintenance expenses and insurance costs for the company.
Mathur is still listed as the contact person for Heritage Aviation. As of February 1, 2018, aviation records show that Heritage sports an additional two Airbus Helicopters EC130 helicopters that have been added to the fleet, as well as the Beechcraft B300 that Mathur used to manage on Sahara’s behalf. This brings the operator’s fleet to a total of five helicopters and two airplanes.
Despite requests for comment, neither Mathur nor Chawla responded. Detailed questions to Van der Merwe and Associates were also not responded to.
It remains unclear exactly how much money the Guptas have allegedly ferreted out of the country. The web of shell companies, opaque shareholding and the Gupta’s use of their lieutenants make tracking down their companies difficult. But if their conduct in Heritage Aviation is anything to go by, millions of state funds could already be locked away in entities without any clear links to the Guptas
A member of parliament in Zimbabwe says he wants parliament to summon former president Robert Mugabe to explain where $15 billion worth of diamond revenue went to during his rule.
Temba Mliswa, a former ruling party MP turned independent, chairs a parliamentary committee on mines that has been probing diamond mining in Zimbabwe’s once-booming eastern Chiadzwa diamond fields.
Two years ago Mugabe told state TV that the country had earned less than $2 billion from its diamonds – but an estimated $15 billion worth had been mined. The former president’s wife Grace was at one time rumoured to be linked to one of the main diamond firms operating in Chiadzwa, though the association was never proven.
Mliswa also said Mugabe would be grilled on why his government chose to evict firms from the diamond fields to make way for a state-run diamond firm in February 2016.
‘Investors were putting in the money’
“If we have to bring the former president before us, he will come so that he tells us where he got the 15 billion-dollar figure, why the government took over diamond mines yet investors were putting money,” Mliswa was quoted as saying by online news site, New Zimbabwe.
“We never saw that money in the fiscus,” the MP added.
Mugabe was persuaded to step down after the military put him under house arrest in November 2017. There’s no guarantee he would agree to appear before the committee.
South Africa MPs recently voted in favour of a motion to begin a process that will allow land expropriation without compensation.
But as the country pushes for this radical move, seen as a way to redress imbalances of the past and promote land ownership and participation in the agricultural sector by black people, it is important that those involved take lessons from its northern neighbour, Zimbabwe.
Zimbabwe went through the same process of fast tracking land reform and managed to displace commercial white farmers, replacing them with blacks, but the results were not as desirable as many would have wanted. Following the exercise, which took place at the turn of the new millennium in the year 2000, the country plunged into an economic and social crisis whose effect is still being felt up to now.
This sad chapter, which has cost Zimbabwe probably two decades of any meaningful development, is still to come to an end as the land question remains a thorny issue far from being solved.
This comes as those who were given land – due to lack of knowledge, resources and the desire to utilise it – have failed to produce enough food for the nation. Others, who also benefited from the chaotic land reform programme, only did so for speculative purposes and are holding on to vast tracts of idle land.
Lesson #1: Give land to those who can really use it
This is lesson number one for South Africa: if land is to be taken, let it be given to those who have the knowledge, the resources and the desire to use it to its full purpose.
This lesson also includes the aspect of order. There should be no room for chaos, but people should be given land fit for the purpose they want to use it for. It makes no sense to give land suited for crops to a farmer who wants to embark on cattle ranching.
While this might look like an example plucked from the blue, sadly that’s what happened in Zimbabwe, where farmers ploughed and applied fertilisers without any knowledge about the type of soil in use.
Lesson #2: Give farmers title to the land
The other mistake made in Zimbabwe, which should be a lesson for South Africa, was to take land out of the market. Following the land reform in Zimbabwe, all land was said to belong to the state, with farmers getting no title for the land that they would have been allocated.
This meant farmers were hamstrung and could not invest in meaningful infrastructure on a piece of land they could be chucked off at any time. Cases of several people being given an offer later for the same piece of land were rampant in Zimbabwe, with those with political muscle always winning.
This obviously discouraged investment. Land without title also meant it could not be used for collateral leaving the new farmers, in need of adequate resources, stranded as they could not borrow to capitalise and run the farming business.
Lesson #3: Property rights motivate the desire to succeed
Property rights, therefore, are not only prerequisites for the release of the funding that supports every farming activity; they are also the motivational stimulant to a farmers’ determination to succeed. Whatever happens in South Africa, land should not be taken out of the market and title must be given as this is the only certainty that can motivate the farmer and funders to pour in financial resources.
Lesson #4: Land has complex links with the whole economy
The responsible authorities also need to understand that land goes beyond farming but is interlinked with the rest of the economy. Farming links feed into manufacturing in many food and non-food areas, from milk to textiles to tobacco, sawn timber, cardboard and tissue paper.
As Zimbabwean economist John Robertson puts it in a paper entitled ‘Strengthening Africa’s economic performance’, published in November 2017 by the Brenthurst Foundation, “A key reason for the crash that destroyed Zimbabwe’s manufacturing sector was the government’s failure to recognise that commercial farming was an industry with complex links into every other industrial sector.”
READ: Researchers plot 4 outcomes for land expropriation without compensation
Before a farm is expropriated, there is need to look at the whole value chain and appreciate that whatever we do on land, will not disrupt upstream and downstream industries. Zimbabwe is currently importing more than half of its milk requirements from South Africa, but this has not always been the case.
The country last year produced only 65 million litres of milk against annual requirements of 120 million litres. This is the same country that used to produce about 300 million litres of milk back in the 1990s, before the dairy herd was destroyed after land reform.
Lesson #5: Bad moves wreak havoc further down the value chain
Using the milk example, there is nothing much to imagine as the milk upstream value chain is immense. Industries and companies involved in the processing of milk-based products are threatened when the supply of raw milk become scarce. Jobs were lost as companies had to downscale while others closed.
Then there is also the downstream side of the value chain. Much of Zimbabwe’s farming equipment was produced locally including farming equipment such as plough discs, harrows and planters. With the dairy herd gone, so too the consumers of stockfeeds, veterinary services, vaccines, etc – the list is endless.
This again leads to the loss of jobs and closure of companies. A drive around Zimbabwe’s industrial areas will reveal a sorry sight of what once-thriving companies have become. Rusty factory shells line up the roads with no hope of coming back to life, all because of one move – chaotic land expropriation.
The dairy industry is just an example, but you can take any crop, plant or agricultural activity and appreciate the linkages with upstream and downstream industries.
As South Africa embarks on the land expropriation road, it is to be hoped that the authorities and those leading the campaign will have full appreciation of what it means and make the right decisions. Zimbabwe is a good case study whose land reform pitfalls should not be repeated.
President Emmerson Mnangagwa’s government is reportedly offering incentives to Zimbabwean white farmers, who shifted their business to Zambia at the height of the controversial land reform programme, to relocate back to the southern African country.
Mnangagwa is breaking away from the seizure of thousands of white-owned farms carried out by his predecessor and mentor Robert Mugabe, who resigned in November under military pressure.
Thousands of white commercial farmers and their employees were displaced and left without sources of income during the fast-tracked agrarian reforms that were masterminded by Mugabe’s administration in 2000.
According to the Commercial Farmers Union of Zimbabwe (CFU), more than 4000 white farmers were affected by the often violent farm invasions.
Some of the white farmers that were kicked out of their properties during the agrarian reforms set base in neighbouring countries such as Malawi, Mozambique and Zambia.
But according to Zambia Watchdog, the new administration of Mnangagwa was now targeting these farmers and offering them incentives to return.
“The new government led by President Emmerson Mnangagwa in Zimbabwe will use the upcoming Agritech Expo Zambia to meet these farmers and entice them to return to Zimbabwe,” the report said.
The Agri Expo was expected to run from April 12 to April 14 and was organised by the African Farmers Union (ZNFU) and a firm called Spintelligent, said the report.
Other countries that had confirmed participation were the Czech Republic, European Union, Finland, France and Germany.
There’s no time to celebrate the election of new President Cyril Ramaphosa who has several tasks waiting for him, says Business Leadership South Africa (BLSA) CEO Bonang Mohale.
Ramaphosa was elected president of South Africa at a sitting of Parliament on Thursday, and later sworn in by Chief Justice Mogoeng Mogoeng. His nomination was unopposed.
In a statement issued by the BLSA following the election, Mohale said Ramaphosa will have to urgently work on growing the economy and job creation. “There is no time to celebrate,” he said.
“Instead of celebrating BLSA is calling on the new administration to urgently focus on a few critical areas,” he explained.
These include improving public services, and addressing the “capture” of key institutions like the South African Revenue Service (SARS) and the National Prosecuting Authority (NPA).
“Our State-Owned Enterprises are bankrupt. We need to address the leadership, capital structure and governance issues gripping these SOEs,” he added.
Call for Zuma Cabinet probe
Mohale also called for the Zondo Commission of Inquiry into state capture to be supported with the necessary resources to investigate “key figures in the ANC’s senior leadership” and Zuma’s Cabinet.
“Technically, we have a leadership that is under prosecution, and they need to be offered an opportunity to account for their actions speedily,” he said.
Mohale also said that stakeholders such as labour, civil society and business should remain engaged on economic policy, and “jealously guard” South Africa’s democracy. BLSA plans to present a proposal on an emergency socio-economic recovery plan.
Business Unity South Africa (BUSA) CEO Tanya Cohen believes that the change in leadership is a “milestone” in the revival of investor confidence.
“The positive movement of the local currency following the events of the past few days is indicative of the importance of political certainty, accountability and good governance in advancing South Africa’s economic fortunes,” she said.
The rand held steady at R11.66/$ on Thursday afternoon following Ramaphosa’s appointment. Investec chief economist Annabel Bishop is of the view that the rand could break below the R11.60/$ level again, depending on Ramaphosa’s State of the Nation Address (SONA) to be delivered on Friday night.
“The good gains the rand has made could be extended towards R11.55/$, and move towards R11.00/$,” said Bishop. However, this is on the condition that there are no further credit downgrades and the budget speech to be delivered on February 21.
Cohen also pledged BUSA’s commitment to work with Ramaphosa to achieve inclusive economic growth.
BUSA called for Ramaphosa’s administration to take steps to build business confidence and to develop a programme of action to address fiscal challenges and the declining economy.
Other tasks for Ramaphosa include tackling youth unemployment, small business growth and “restoring good governance and accountability” in both the public and private sector.
These protein-packed black bean burgers are one of our favourite meat-free Monday dinners. Trust me, they’re delicious.
They pass the carnivore husband and suspicious child test with flying colours, but I love them because they’re healthy and easy to make, and give me the satisfaction of noshing a burger whilst feeling smugly virtuous. I always keep canned black beans in the cupboard and cooked brown rice in the freezer so they are so easy to throw together. You can also make them in bulk and freeze them.
I found them in cans with the Jamaican food in the international aisle in Tesco. I also get them in the canned pulses section at Waitrose. You’ll use black beans in loads of Mexican recipes so I’m hoping, now that Mexican food is really taking off in the UK that you’ll see them more and more.
Why frozen brown rice makes life so much easier
If you get into the habit of always cooking more brown rice than you need and then freezing it, you’ll be able to make these burgers in no time. I’ve shared my foolproof brown rice cooking and freezing tips along with other ways you can use it. Most supermarkets sell frozen brown rice now too – the frozen stuff has nothing weird added unlike the pouches of ready-cooked rice.
How to serve your burgers and other ways to use the mixture
I like to serve these burgers on seeded wholemeal buns with avocado, mature Cheddar, rocket and tomato. They go really well with sweet potato fries too. I often grab one from the freezer to cook with a salad when I’m working at home. They’re also really good with my romesco sauce.
The bean and rice mush is also pretty yummy before it is turned into black bean burgers as a sandwich spread, taco filling or as a dip for tortilla chips.
These burgers are too fragile to cook direct on the bars of a BBQ. You could cook them in a frying pan on a BBQ though.
Eat some, save some
What I love the most about these is that I can whip up a huge batch in just minutes. Then I have the base for lots of dinners in the freezer. You can make the black bean burgers, or the mixture 3 days before you need them and just leave them tightly wrapped in the fridge. Or you can freeze them. Either freeze the mixture, before you make it into burgers and then make the burgers when you defrost it. Or make burgers and freeze them.
To freeze them as burgers:
1 Line a baking tray (that is small enough to fit in your freezer) with parchment paper. Place four burgers on the tray and cover lightly with cling film. Put tray in freezer until burgers are frozen.
2 Once frozen, wrap each individually in cling film and put them back in the freezer.
3 When ready to eat, thaw in the fridge. They may go a little sticky when you defrost them so if they do, just flour your hands and form them back into burger shapes right before you gently drop them into the pan to cook.
Active prep time: 15 minutes. Cooking time: 20 minutes (plus half an hour to rest in the fridge).
Black bean burgers ingredients (feel free to double this to make a bigger batch, I usually do)
1 tablespoons rapeseed, avocado or olive oil
1 large red onion, diced
2 cloves garlic, minced
half a teaspoon each: ground cumin, sea salt flakes, freshly ground black pepper
1 teaspoon dried oregano
2x 400g (2 x 15 oz) cans black beans, drained and rinsed (Epicure from Waitrose or Dunns River from Tesco or Trader Joe’s in US).
1 cup (185g) cooked brown rice
20g coriander (cilantro) stems and leaves, finely chopped (or basil if you have a coriander hater, or leave the fresh herbs out if you have greens haters)
4 tablespoons plain or spelt flour
2 tablespoons rapeseed, avocado or olive oil for cooking the burgers
Avocado, pickles, sliced tomatoes, cheese, toasted whole grain burger buns.
To make black bean burgers:
4 Finely dice your onion and drain your beans, defrost your rice in the microwave if it is frozen.
5 Heat 1 tablespoon of rapeseed oil in a large non stick frying pan on a medium heat.
6 Add onion, oregano and cumin. Cook, stirring every few minutes until the onion has softened (about 7 minutes)
7 While the onion cooks, mince your garlic and chop your herbs and set aside.
8 Add the crushed garlic to the onion for the last minute of cooking. Garlic has a higher sugar content than onion so if you add it too early it will burn.
9 Add the drained beans and rice to the onion and garlic. Season with salt and pepper. Cook, stirring for 2 minutes
10 Stir in chopped coriander if using.
11 Take off the heat and mash with potato masher until combined and mushy. You still want some texture but you need it to stick together in lumps. Taste and adjust the spices to suit your taste buds, you may want to add chili or salt or more cumin.
12 When the mixture is cool enough to handle, divide into 8 and squeeze into a ball with your hands. Then flatten each ball into burgers so that they are about 2cm thick and the size of the palm of your hand.
13 Cover and refrigerate the black bean burgers you’re going to cook for half an hour, or up to a day until you’re ready to cook them. See above for how to freeze the other burgers.
14 When you’re ready to cook, put the flour onto a plate and dip each side of the burgers into it so they have a light coating. tap off any excess flour
15 Heat 1 tablespoon of oil in large frying pan on a medium-high heat. Gently place the burgers in the pan. If you don’t hear a sizzle, turn up the heat. Cook without moving them until they are browned and crusty on the outside and warmed through, about 4-5 minutes per side. They are very delicate so when you flip them, use a spatula or fish slice to slide underneath and put your hand or another spatula on the upper side to help them flip without collapsing.
While they cook, split and toast your buns, slice avocado and tomatoes and cheese. I usually let everyone make their own burger or plate of salad. I always have a squeeze of lime and a shame-free splodge of ketchup on mine.
The announcement was accompanied by a new teaser image.
Mercedes is looking to shake up the small premium car market when the new A-Class goes on sale later this year with a fresh, bold design that features a hi-tech interior packed with next-generation technology.
Daimler’s Chief Design Officer Gorden Wagener said the A-Class “has the potential to usher in a new design era” for Mercedes, signalling that much of the new tech is likely to find its way into other Mercedes models in the future.
Mercedes has released details about the A-Class’ new infotainment system, which is set to feature artificial intelligence (AI) among other hi-tech features.
The new infotainment system will operate across two large display screens. One of these replaces traditional binnacle dials, while the other is placed right next to it, producing what Mercedes calls a ‘widescreen cockpit’. Three versions of this setup will be available; two seven-inch displays, a combination of seven and 10.25-inch displays, or two 10.25-inch displays. It’s likely that similar combinations will eventually become available across the Mercedes range. Interestingly, these screens don’t feature a traditional cowl.
Mercedes has done away with its rotary infotainment controller and has made the central screen touch-sensitive instead. There is a touchpad where the rotary dial would have been, however, and this can be used to navigate the system. The A-Class will get this technology first, but you can expect to see it reach other Mercedes cars in the future.
Voice recognition is also set to take a major role in the interior of the new A-Class. Much like similar systems on mobile phones, the car can be readied to receive commands by saying a set phrase – in this case, ‘Hey Mercedes’. The car’s AI means it’ll learn your habits to further improve the experience.
The dashboard is modern, sleek and simple, with a focus on quality materials like open-pore wood trim and brushed metal. Its wraparound design is particularly striking, as are its jet-engine-like vents and ambient lighting system.
Mercedes said the 12 colours selectable in the old car have grown to 64, while the whole system will be more sophisticated in general, making for “an avantgarde lighting display with spectacular colour changes” and using energy-saving LED lights.
Improved seats will also feature, with three front-seat options, including basic and comfort versions, along with a sportier option with integrated headrests. Most importantly, the A-Class will be bigger inside than before, with more elbow, shoulder and headroom for front and rear occupants. Boot space has increased to 370 litres (29 litres more than the old car), and there’s a 10 per cent improvement in all-round visibility, too.
The mainstay of 2018 Mercedes A-Class range will continue to be a hatchback, but it’ll be joined by the A-Class saloon, which was previewed with the firm’s Concept A vision earlier this year.
The new A-Class has adopted a fresh new look for 2018. The changes from the old car are numerous, but new, more angular headlights and a longer body are the most obvious differences. As per today’s car, the A-Class hatchback will be five-door only, reflecting increased global demand for cars with rear doors over sportier three-door models.
Source: The Nation
The net is finally closing around the Gupta family, members of which are now being pursued in earnest by the Hawks, with at least seven cases said to be at an “advanced stage” of investigation.
City Press understands that these cases include Atul Gupta’s offer of ministerial positions to former deputy finance minister Mcebisi Jonas and former MP Vytjie Mentor, as well as multibillion-rand Gupta contracts at state-owned enterprises including Eskom and Transnet.
Yesterday, a senior source in the security cluster told City Press: “Investigations involving entities under state capture allegations are at an advanced stage.
“At least seven will see prosecution by June with [those related to the] Vrede [dairy farm scandal] starting in less than a week or so.”
This follows this week’s raids on the Free State office of the premier, the Free State department of agriculture and the dairy farm this week.
A senior security cluster official told City Press on Friday that the Hawks seized laptops, hard drives and a copy of the server at the premier’s office, which has been occupied for nine years by new ANC secretary-general Ace Magashule.
Another senior security cluster source said the Hawks were working on establishing whether Magashule was directly involved in the failed dairy project his provincial government handed to Gupta-linked company Estina.
“They have mirrored the server in the premier’s office in the hope of finding something,” he said. “They have everything else that they need on the others.”
However, a source close to the police department said: “The raid had nothing to do with [Magashule], but with documents that would ordinarily be at his office.
“For now. The premier’s office is the nerve centre of province administration, cabinet resolutions and so on.”
In a statement on Friday, the office’s director-general, Kopung Ralikontsane, said the provincial government had undertaken to “cooperate fully with all the investigations”.
“It is in our interest that this matter is brought to its finality to allow the Free State provincial government to continue its work of changing the lives of the people for the better.
“We wish to thank the members of the public for their patience in the matter, and we wish to commit that we will regularly update them on this matter, as well as on all our activities that are implemented in line with our mandate,” he said.
Sources from the Hawks, close to the police ministry and elsewhere in the security cluster told City Press that Mineral Resources Minister Mosebenzi Zwane, who was the province’s MEC for agriculture at the time the Guptas allegedly milked his department of R220 million – is facing arrest along with his former head of department Peter Thabethe, as are at least two of the Gupta brothers.
“We are diligently dealing with it and we aren’t paying heed to public pressure or to any politician or group.
“The Hawks and the SA Police Service are working closely with National Prosecuting Authority [NPA],” said one source.
“The arrests are a done deal. It is just a matter of when.”
A senior Hawks source told City Press last week that arrest warrants had already been issued.
Zwane told news channel eNCA that he welcomed the Hawks investigation and offered to cooperate with the process.
“I am one of the people who believe in innocence until proven guilty by the court of law,” he said.
According to court papers filed in support of a preservation order obtained by the NPA’s Asset Forfeiture Unit last week, Atul Gupta unlawfully received R10m in his bank account from Estina.
A source close to the police department said proof of this payment alone was enough to secure a warrant for his arrest.
Late last year, another senior source inside the security cluster told City Press that Zwane would be arrested “before Christmas”.
MORE ‘ADVANCED’ CASES
City Press understands that the other “advanced” cases revolved around Ajay Gupta’s offer to get Jonas appointed as finance minister and the allegation that Jonas would be paid R600m if he agreed to work with them.
In a supplementary affidavit deposed in December 2016, Jonas says he was invited to a meeting at the Hyatt Regency hotel in Rosebank by President Jacob Zuma’s son Duduzane and businessman and fixer Fana Hlongwane, after which they went to the Guptas’ home in Saxonwold, where Ajay Gupta offered him the finance minister’s job.
However, Ajay Gupta denied under oath that he made the offer.
Another senior security cluster source told City Press this week that the Hawks had subpoenaed the hotel to provide them with footage of the meeting to confirm Jonas’ version of events.
In her affidavit, Mentor stated that Ajay Gupta offered her a job as public enterprises minister in exchange for her help “to supply Eskom with coal” and “influence SAA” to drop a lucrative route to India in favour of an airline the family had links to.
Other “advanced” cases, a source close to the police department said, included investigations into Gupta contracts at Transnet, where they allegedly skimmed R5.3 billion in kickbacks off a R50bn tender to build locomotives; at Eskom, to which the Guptas’ Optimum coal mine supplied substandard coal at inflated prices; and at Denel, where amaBhungane reported that the Guptas allegedly tried to sell Denel’s intellectual property to India while watering down the state-owned company’s stake in their joint venture by half.
“It’s been happening. We have been getting preservation orders, and turning witnesses since July last year, when we ramped up our investigations,” he said.
The source also said the authorities were not relying on the #GuptaLeaks documents for evidence, saying: “Leaked documents aren’t part of the case.
“They don’t assist but spoil cases. We have our own evidence.”
IN VREDE YESTERDAY
Meanwhile, in Vrede yesterday, scores of community members arrived at the Vrede Police Station to make statements to Hawks officers.
One of the beneficiaries, Matebesi Sibiloane (55), said officers asked him who had promised him that he would benefit from the farm and how much work and money he would eventually receive from it.
“I told them that it was Mosebenzi Zwane who promised me that.
“I also said that I received no work or money from the farm, even though I had 35 years’ experience on a dairy farm and could easily contribute to it.”
Another beneficiary, Bongani Khubheka (40), said police were on the farm to count the cows and examine the equipment.
Hawks spokesperson Brigadier Hangwani Mulaudzi, confirmed that interviews were conducted with local residents yesterday.
Kubheka said the beneficiaries were not thrilled by the developments, because it meant they would have to wait longer before seeing any money.
“We are waiting for our money since 2013. It is time that the Free State government is held responsible and gives us our due,” he said.
He said there was no other work in the area and the farm could create up to 400 jobs if it was managed properly.
Another beneficiary, Bafana Mbuli (29), said he smelt a rat in 2015, when Zwane told beneficiaries that cows were going to be imported to the farm from India.
“We feel that the government has left us in the lurch. They stole from the poor people who they are supposed to support,” he said.
GUPTA EMPIRE STARTS TO CRUMBLE
Workers at the Guptas’ Optimum Coal mine said they were in dire straits after not being paid this past week.
Several workers for a contractor on the mine on Friday showed a letter to Rapport in Pullens Hope, the settlement between Optimum’s headquarters and the Hendrina power station.
The typed letter, dated Thursday, states that the contractor had a cash flow problem “due to events out of their control”.
It states that workers must be patient and inform their banks about a delay in getting their salaries.
The company hoped the problem would be resolved this week.
One mine insider said that, as far as he knew, at least 100 workers had not been paid.
Another worker said Optimum had not paid several contractors.
Several Pullens Hope residents spoke of a helicopter landing on a soccer field next to Optimum’s head office.
They didn’t know who got out of it, only that they had bodyguards and appeared to be “well looked after”.
Last year, the Guptas said they were selling the mine to Swiss company Charles King SA for R2.97bn, in a transaction to be concluded over a period of time.
The company belongs to United Arab Emirates resident Amin Alzarooni.
However, one of the contractors referred queries to Gupta-owned company Oakbay, which he said still owned the mine.
Eskom said Optimum was still delivering coal according to their contract, but that all was not well there.
One worker, a storeman, said he had four children who asked him on Thursday if he would be bringing money home. He said he told them: “Maybe tomorrow.”
“We don’t know what the problem is. We must buy food and pay school fees,” he said.
A contractor who asked not to be named said the mine’s management no longer took his calls.
“We are honest workers. We just want our money,” he said.
Another contractor said he was “scared to speak out”.
“You know, the Guptas are dangerous people,” he said.
Source: City Press
With less than 80 days to go until Day Zero, the City of Cape Town may want to consider getting help from the bottled water industry.
South African National Bottled Water Association (Sanbwa) chairperson John Weaver said that some of their members have donated water to afflicted areas in the past and have sold water at a cost.
“This cost could be dramatically reduced were government to allow for an emergency water category that, for example, allowed bottlers to omit labels.
“Bottled water is regarded as a food product by the Department of Health and must comply with legislation covering, in addition to health and safety issues, packaging and labelling, which is very expensive,” said Weaver.
Sanbwa is a representative body of the bottled water industry and has a membership list which includes Bonaqua, Valpré and Clover Waters: Nestle Pure Life.
The bottled water industry has remained untouched during the water crisis as 90% of their members use renewable groundwater sources in their packaged products, according to Weaver.
“Groundwater is strongly buffered against drought influence because it is renewed (replenished) in a completely different way to surface water, which is mainly dependent on reliable rainfall, and is thus very susceptible to drought patterns,” explained Weaver.
The city’s Director of Trade and Investment Lance Greyling said that he was planning to consult with the Sanbwa in the near future. He has already had meetings with retailers in an attempt to dissuade them from profiteering off the drought.
Pricing of bottled water
However, Weaver said that any discussion on the pricing of bottled water with the city would be illegal.
“It is illegal in South Africa to discuss, fix and or manipulate the price of goods. So, even if the city were to approach us or any of our members, we are legally obliged to decline to continue the discussion,” Weaver said in an emailed response.
Weaver also said that, while there was no official report of increased sales in Cape Town, stockpiling was probable.
“There have been reports regarding consignments of 5l bottles, which apparently are sold out within hours of being delivered to Cape stores. We have had no official, nor unofficial reports of increased sales, but whenever there is hot weather or drought, sales do increase,” he said.
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(South African Fast Rising Blogger)
National Gossip Blog
Switzerland will return to Nigeria around 321 million dollars in assets seized from the family of former military ruler Sani Abacha via a deal signed with the World Bank, the Swiss government said.
Transparency International, a corruption watchdog, has accused Abacha of stealing up to five billion dollars of public money during the five years he ran the oil-rich country, from 1993 until his death in 1998.
In 2014, Nigeria and the Abacha family reached an agreement for the West African country to get back the funds, which had been frozen, in return for dropping a complaint against the former military ruler’s son, Abba Abacha.
The son was charged by a Swiss court with money-laundering, fraud and forgery in April 2005, after being extradited from Germany, and later spent 561 days in custody.
In 2006, Luxembourg ordered that funds held by the younger Abacha be frozen.
The Swiss government said that Switzerland, Nigeria and the World Bank have agreed the funds will be repatriated via a project supported and overseen by the World Bank.
“The project will strengthen social security for the poorest sections of the Nigerian population.
“The agreement also regulates the disbursement of restituted funds in tranches and sets out concrete measures to be taken in the event of misuse or corruption,” the World bank said.
Source: Premium Times
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