Tag: guptas

Source: CNBC Africa

South Africa’s Nedbank denied any wrongdoing on Monday after three local news sites reported on its links to a scandal that led to large losses at public entities, sending the bank’s shares down almost 9%.

Investigative outlet amaBhungane, the Daily Maverick and News24 said Nedbank paid billions in rand in fees to a company called Regiments Capital for involving it in deals that lost money for municipalities and state-owned companies.

The article published by the three news sites said the commissions were often not disclosed to clients Regiments was supposed to be advising impartially and that Nedbank knew or should have known this, among other allegations.

In a statement responding to the article, Nedbank said there was nothing unlawful or unusual about its relationship with Regiments, although with hindsight it might have acted differently.

“Our internal and external reviews confirmed that Nedbank has at no time acted unlawfully in its dealings with Regiments and the affected counterparties,” Nedbank said.

An email to the address on Regiments’ website seeking comment bounced back, while a call to the number on its website went to the voice mail of another firm. Reuters could not immediately reach any legal representatives for Regiments.

Nedbank shares closed down 8.87% versus a 1.9% decline for the South African banking index.

A warrant of arrest has been issued for ANC secretary-general Ace Magashule, according to Independent Media.

When asked about the matter, Magashule confirmed knowledge of his intended arrest saying “I’m aware. I’m aware,” he said. “It’s going to be a Hollywood style type of thing. But we will see,” Magashule said.

It is understood that Magashule will be arrested and charged over his role in the controversial Vrede Dairy Farm project. He will be charged for his alleged “failure to exercise oversight’’ relating to the Vrede Dairy Farm investigation.

However, News24 reported that ANC secretary-general Ace Magashule and his lawyer do not know whether there is a warrant of arrest against him, and the Hawks have dismissed it as fake news.

This came as rumours of his pending arrest prompted a political fightback among his supporters, with Magashule’s supporters labelling it as a “well-orchestrated usage of state organs to fight internal ANC factional battles”.

Magashule’s lawyer, Victor Nkhwashu, said they were not informed that there was a warrant of arrest for Magashule.

“We have not been informed about a warrant of arrest issued against our client. Save for the news article that is circulating in the media,” he said.

The ANC secretary-general is said to have asked his lawyers to reach out to the Hawks and the National Prosecuting Authority (NPA) for more information.

The Hawks have denied issuing any warrant against Magashule.

Hawks spokesperson Hangwani Mulaudzi described it as fake news. “Maybe there’s another Hawks we are not aware of,” he said on Tuesday evening.

Loadshedding is here to stay

Source: MyBroadband 

South Africa should prepare for “years of gloom” and citizens must start stockpiling candles and torches, thanks to what lies ahead at Eskom.

According to a report in the Sunday Times, Eskom’s load-shedding and financial problems “could drag the country into a death spiral”.

Eskom needs to spend billions of rand on maintenance in 2019 and has promised that load-shedding will subside by March, but the report quoted energy analyst Ted Blom who said coal shortages will continue until 2025.

“About 80% of Eskom power generation relies on coal,” said the report.

Eskom has been described as being at a “coal cliff”, where there are not enough coal mines to supply its needs, and that new mines will take years to develop.

Eskom has made headlines in recent weeks for its coal shortages, and in November 10 of its power stations had less than 10 days of coal supply left.

With coal shortages comes more load-shedding, and while this is a severe problem for people who want to go about their daily lives, it can be a death sentence for businesses and the economy.

Continued load-shedding may even force the ratings agencies to downgrade SA to junk status due to all the local investments which would disappear.

Econometrix chief economist Azar Jammine stated in the report that this has led South Africa’s growth rate to drop to the second-worst among the G20 countries.

Economist Mike Schussler described this as “a nightmare for SA”, and said we are “at the edge of a cliff”.

Eskom technically bankrupt
The Organisation Undoing Tax Abuse (Outa) recently said Eskom’s financial results indicate a company that “is technically bankrupt”.

While presenting its 2018/2019 interim results, Eskom revealed that its 2007 debt of R40 billion has swelled to R419 billion and is estimated to exceed R600 billion in the foreseeable future.

In addition, Eskom’s huge staff complement including fixed-term contractors has increased to 48,628 in 2018 from 47,658 in 2017, costing South Africans R29.5 billion in March 2018.

Eskom’s dire financial situation is set to get even worse as its full year loss is set to grow to R15 billion – up from the expected R11.2 billion.

Outa said Eskom does not have a sustainable business model or a comprehensive financial plan to claw itself out of the debt hole it is currently in.

“If Eskom was a private company, it would either be under business rescue or in liquidation,” said Ronald Chauke, Outa’s energy portfolio manager.

He said the appointment of Calib Cassim as Eskom’s permanent chief financial officer may offer some stability and comfort that the rot will stop.

However, Outa said, it’s the power utilities’ declining revenues which inhibit it from turning into profitability or controlling its ever-increasing operational costs.

Eskom moves turnaround strategy to 2019
Eskom has also said that it only expects to launch its turnaround strategy in 2019 after at least two delays of its much-anticipated recovery plan.

The power company’s long-term strategy has been approved by the board, but the plan is seen as being implemented “in the new year”.

This news come after a third day of scheduled power outages on Saturday due to inadequate energy availability.

Financial constraints limited maintenance amid unplanned outages from an aging fleet of power stations, making matters worse.

Did the banks collude with the Guptas?

Source: The Citizen 

The EFF has criticised South Africa’s major banks, calling them opportunistic and hypocritical “in their testimony given to the state capture inquiry”.

Standard Bank’s retired head of legal testified at the inquiry on Monday giving reasons that led the bank deciding to close the business accounts of the controversial Gupta family.

Former FirstRand Group – which First National Bank (FNB) is a division of – chief executive officer (CEO) Johan Burger is testifying at the commission today.

“These banks were very happy to do business with the Guptas until the unceremonious December 2015 removal of Nhlanhla Nene as finance minister when South African stocks were severely devalued,” the EFF said in a statement.

The red berets added that by the time of Nene’s axing, the Guptas and former president Jacob Zuma – who are commonly referred to as the Zuptas – were already carrying out corrupt activities “facilitated by the very same banks”.

The EFF said: “It is impossible that the banks only started to notice the suspicious transactions of the Guptas and their companies in 2016 as they now want us to believe.

“The truth is that these banks colluded in the looting of the country for as long as it was feeding into their profit maximisation motives and greed. These are the only driving forces behind the commercial banks. For them, it’s profit before people and the country.”

The party said it hopes the chair of the commission Deputy Chief Justice Raymond Zondo would not be fooled by the testimony of the banks.

“We call on the South African Reserve Bank (Sarb) and the Financial Intelligence Centre to launch a separate probe into the complicity of South African banks in the Gupta state capture and why they turned a blind eye towards an obviously suspicious transactions before 2016 and to hold them accountable for their part in state capture,” the EFF said.

The party added that if the Sarb fails to institute such a probe the party would take it upon itself to initiate a parliamentary probe into the matter.

Meanwhile, Burger testified on Tuesday that FNB had closed the accounts of the Guptas due to associated reputational and business risks.

Standard Bank has denied that it has opened a bank account associated with the Gupta family.

It was reported earlier on Tuesday that the top-4 bank had agreed to open bank accounts for business rescue practitioners controlling seven Gupta companies.

However, Standard Banks spokesperson Ross Lindstrom has said the bank terminated all dealings with the Gupta family and all entities controlled by it with effect from June 2016, and that that decision still stood.

Earlier, business rescue practitioner Louis Klopper confirmed that Standard Bank had agreed to open a new account‚ with strict conditions limiting access only to Klopper and his partner practitioner‚ Kurt Knoop.

Klopper said this had been a crucial stumbling block to getting the Gupta companies‚ particularly the four mines owned by the family‚ back up and running.

However, in an e-mail to Business Day, Linstrom said on behalf of the bank: “Standard Bank of SA has not opened and will not open accounts with these companies. Any impression created to the contrary was created by an employee that was acting out of mandate.

“Communication between the employee and [Klopper] was not authorised and did not follow the internal processes of the bank. Disciplinary procedures are currently under way.”

The Gupta family has had to make do with facilities at the Bank of Baroda — a relationship that has deteriorated since the bank started to come under pressure from the Reserve Bank over the large number of suspicious transactions the Gupta family were processing.

On February 16 the directors of Gupta-owned Tegeta filed for business rescue‚ placing Optimum‚ Koornfontein and Brakfontein coal mines in Mpumalanga, as well as Shiva Uranium in the North West, under Klopper’s control.

Property investment companies Confident Concepts and Islandsite Investments 180 were also placed under business rescue.

The mines employ roughly 3 000 people‚ most of whom went on strike when salaries were not paid on February 25. The permanent staff‚ about 1 500 people‚ were paid last week.

By Kyle Cowan for Business Day

Is this loadshedding, revisted?

Eskom has been dogged by allegations of corruption and mismanagement, and this is showing in its expected financial results over the short and medium term. In addition, two of Eskom’s suppliers of coal – namely, two Gupta mines – have stopped operations due to an inability to pay staff.

As the embattled parastatal’s bills mount, questions surround whether or not there will be enough coal to keep power on this winter.

Eskom’s problems far worse than expected

The Rapport reported that Eskom expects a loss of R8.1-billion in the short term, which is set to balloon to R26,5-billion in the medium term.

These projected losses are the highest a state-owned enterprise has ever experienced in South Africa.

The National Treasury described Eskom’s financial problems as the single biggest risk to the South African economy and public finances.

This echoed the views of finance minister Malusi Gigaba, who said in January that Eskom’s financial woes could collapse the economy.

“There would be no currency, and no economy for the country if Eskom went belly-up,” said Gigaba.

To address the mismanagement at Eskom, Gigaba said in his recent budget speech that the government has strengthened Eskom’s board and management with “highly-capable, ethical, and credible leadership”.

Further allegations of mismanagement
In related news, the Sunday Times reported that former Eskom executive Matshela Koko’s wife has received millions of rand from the power utility.

“Documents in the possession of state capture investigators suggest the money flowed to companies where Koko’s wife, Mosima, is a director,” said the Sunday Times.

The report stated that the money was “channelled through Eskom service provider Impulse International, where Mosima’s 27-year-old daughter, Koketso Choma, was a non-executive director”.

In March last year, the Sunday Times reported that Koko’s stepdaughter received contracts for her company worth R1 billion from Eskom.

The report stated that Choma was appointed as a director at Impulse International in April 2016, after which it received eight contracts from the division of Eskom which Koko headed up.

Third Gupta-owned mine fails to pay workers’ salaries

An employee at Shiva Uranium mine‚ a Gupta-owned company based in Klerksdorp‚ North-West‚ says they have been left in the lurch after the company failed to pay them their salaries last week.

“We have not been paid February salaries. We were told that we would be paid on the 28th. This is very frustrating as most of us live far from work and are struggling to get money for transport‚” said the employee‚ who asked not to be named.

She said the company told them on Friday that the payments were delayed because it does not have a bank. “They also told us that they have an international bank and the funds have to be converted from dollars into rands and that the process takes long.”

Koornfontein coal mine is the second Gupta-affiliated mine not to pay salaries to its workers.

They were also told that the delay was due to Eskom not paying the company.

The country’s commercial banks have cut ties with Gupta-owned companies – citing reputational risk – while the only bank which services the companies‚ Bank of Baroda‚ is to exit South Africa at the end of March.

“We know there is trouble brewing there. They are just not telling us the truth.”

She said most workers have since Friday taken leave because they either do not have money to take public transport or put fuel in their cars.

“I do not know what I would have done had it not been for my partner‚ who has helped out with the kids’ school fees and other household expenses‚” the woman said.

She said the company has denied that it is under business rescue as the workers have heard from media reports.

“We have asked them if they are under distress and they said no. They don’t want us to take action against them and have threatened us with our jobs‚” she said.

Shiva Uranium is the third Gupta-owned company to not pay its employees. Optimum and Koornfontein coal mines have also failed to pay workers their salaries this month.

Workers at Optimum downed tools on Wednesday last week‚ saying they wanted to know whether the mine would be sold following reports that the mine’s owners‚ the Gupta family‚ could no longer be found.

Koornfontein supplies coal to Komati power station‚ Optimum supplies coal to Hendrina power station and Brakfontein supplies coal to Majuba power station.

https://mybroadband.co.za
By NOMAHLUBI JORDAAN for https://www.timeslive.co.za

Gupta bank exits SA

With the state-capture inquiry about to kick off, the Bank of Baroda announced on Monday it was shutting down its South African branches.

The instruction is said to have come from the bank’s headquarters in India.

The bank, which provided banking services to the Gupta family when other banks would not, said its parent company was “rationalising” branches in international markets.

There was speculation at the weekend that it would exit SA.

Baroda said it would stop taking new deposits from March and cease operations altogether at the end of March.

The South African Reserve Bank said the registrar of banks was in talks with Baroda to ensure its orderly withdrawal to protect depositors. The bank had R2.6bn in deposits at the end of December, according to regulatory filings.

Manoj Kumar Jha, the bank’s South African acting CEO, declined to comment.

The latest developments come after the bank became ensnared in state-capture allegations through its association with the Gupta family, its companies and associates.

Baroda faced the possibility of closure arising from a directive the Bank issued after it fined Baroda R10m for breaching sections of the Financial Intelligence Centre Act.

Baroda was named in former public protector Thuli Madonsela’s 2016 report on state capture, which directed President Jacob Zuma to appoint a commission of inquiry to investigate whether any official or organ of state had acted unlawfully, improperly or corruptly by giving financing facilities to companies linked to the Gupta family. This included a R659.5m prepayment that Eskom made to Tegeta Exploration & Resources to acquire the Optimum mine that supplied coal to Eskom.

Baroda is to be investigated for its role in facilitating the transaction and its handling of funds belonging to Optimum’s mine-rehabilitation fund.

After a lengthy legal battle and a ruling by the High Court in Pretoria, Zuma finally appointed Deputy Chief Justice Raymond Zondo in January to head the state-capture inquiry.

The National Prosecuting Authority’s asset-forfeiture unit froze more than R110m in deposits held at Baroda, which it said were proceeds of crime related to the controversial Vrede dairy-farm project in the Free State — meant to empower poor community members.

According to the asset-forfeiture unit, the R110m was part of R220.2m paid by the Free State agriculture department to Estina, a company associated with Atul Gupta, for the project.

Very little of this money was used for its intended purpose. Some funds found their way to Atul Gupta’s niece Vega’s blockbuster wedding at Sun City, while other funds went to vehicle dealers and other entities belonging to the Gupta family.

Attempts to reach Eugene Nel, the curator who was appointed by the court on behalf of the asset-forfeiture unit, were unsuccessful.

By Moyagabo Maake for Business Live

The Asset Forfeiture Unit (AFU) is hoping to seize at least R50bn in 17 cases it is currently investigating related to state capture, acting head of operations advocate Knorx Molelle said on Tuesday.

In an interview with eNCA, Molelle said his team had already prioritised six matters which were before the courts, awaiting preservation orders.

“The matters are before the court and hopefully in the next couple of weeks we will have court orders,” he said.

The AFU has already taken action against two Gupta-linked companies – Trillian and McKinsey – hoping to recoup R1.6bn in assets related to consultancy work done by the companies for Eskom and Transnet.

Through their engagements, Trillian had indicated a willingness to co-operate, Molelle said.

“We are quite confident that, in the next day or two, we would have recovered the funds that have been taken away.”

Assets would only be attached as a last resort, he said.

“If there is willingness with those that we are dealing with that they are prepared to make good, the actual physical removal will be a last resort.

“An engagement that we having is absolutely critical. We are sitting and resting with the comfort that should that not bare any fruits, we also identified the relevant assets from which we can recover.”

Mollelle said the matter should be finalised within the next two days.

The AFU was investigating six other matters in which they were hoping to recoup money in the current financial year, he added.

‘We are working at our utmost best’

The money would be deposited into the Criminal Asset Recovery account and reinvested into fighting crime or to the state, where needed.

Acting head of the Specialised Commercial Crimes Unit, advocate Malini Govender, could not clearly say when individuals would be prosecuted in cases related to state capture, only commenting that it was a complicated matter that needed time for thorough investigation.

“We have only been dealing with this since March, so you cannot expect that in a month or two months we are going to take something to court. We are working at our utmost best and hardest in ensuring there is sufficient traction to get this matter to court,” she said.

The NPA – together with National Treasury, the Financial Intelligence Centre, the Companies and Intellectual Property Commission and the AFU – had an 18-man team dedicated to the “eight legged” state capture investigations, she added.

Seven of the investigation’s “legs” came from former Public Protector Thuli Madonsela’s report into state capture, while the eighth stemmed from a separate complaint.

Both officials denied any interference by the National Director of Public Prosecutions Shaun Abrahams.

“At no stage did he give any instruction that we do not proceed. In fact, at some stage he was… anxious at what he perceived to be a slow pace,” Molelle said.

14 Gupta-linked companies and individuals to have their assets frozen

At least 14 people and entities linked to the alleged corruption by Gupta-linked company Trillian and international consultancy firm McKinsey have been identified in a preservation order obtained by the Asset Forfeiture Unit.

The AFU is going after the big shots at Trillian and McKinsey. The people named in the court order include Eric Wood, who is Trillian CEO; Trillain CFO Tebogo Leballo; Prakash Parbhoo, a partner at McKinsey; and Jean Pierre Goerges Desvaux, who is a senior partner and managing partner at McKinsey.

The court order also identifies Trillian property in the high-end business precinct Melrose Arch in Johannesburg.

Others named in the order include: Veronica Magwentshu, Thabiso Legoete, Johannes Faure, Daniel Roy, Trillian Capital Partners, Trillian Finanical Advisory, Trillian Management Consulting, Trillian Properties, Trillian Securities, McKinsey and Company Africa, and “any other person who becomes known to the applicant as having an interest in the property.

By Lizeka Tandwa and Mahlatse Mahlase for News24

E-commerce and media giant Naspers and its pay-TV arm MultiChoice could now be facing a possible class action suit in the US after a law firm there announced it was starting an investigation on behalf of investors into Naspers.

In the latest fallout in the widening scandal involving allegations of corruption, collusion and undue corporate influence from Naspers’ MultiChoice unit to allegedly influence South Africa’s long-stalled digital migration switch from analogue to digital TV, US law firm Pomerantz has launched a search for investors who want to start a class action lawsuit against Naspers.

Pomerantz said its investigation on behalf of Naspers investors concerns whether Naspers and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.

In its public statement issued on Tuesday it said: “On December 1, 2017, Naspers reported that its wholly-owned television unit MultiChoice had initiated an investigation into whether improper payments were made to ANN7, a South African news channel owned by the politically-connected Gupta family.

“According to local media, citing leaked emails, MultiChoice substantially increased its annual payment to ANN7 from R50m to R141m over the past two years.

“On this news, Naspers’ American Depositary Receipt price fell $3.05, or 5.58%, to close at $51.60 on December 1, 2017,” Pomerantz said in the statement.

Naspers acknowledged Pomerantz’s statement and told Fin24 on Tuesday that adjustments in global tech markets took place at around the same time Pomerantz highlights.

Naspers re-iterated that it takes the recent media allegations about MultiChoice SA seriously. It however pointed out that MultiChoice SA has many minority shareholders and the responsibility for dealing with the matter lies with the independent MultiChoice SA board.

“The MultiChoice South Africa board has therefore instructed its audit and risk committees to assess whether or not there have been any corporate governance failures at MultiChoice in regard to the ANN7 matter and report back to the board,” Naspers said in an emailed response to questions.

The ecommerce and multimedia giant said it has confidence in the MultiChoice SA board to deal with the matter, following their governance procedures. It said it will verify that the MultiChoice SA board has addressed the matter adequately.

“The MultiChoice Audit & Risk committee has confirmed the action it is taking in response to the allegations in the media. As stated above, once they complete their work following their governance procedures, they will report to the MultiChoice board, and after that has happened the Naspers board will consider whether it is satisfied with the action that the MultiChoice board has taken.”

Source: Thinus Ferreira and Fin24

MTN employee helped Guptas spy on people

The Sunday Times has reported that an MTN employee, who worked as a senior fraud analyst, sold the cellphone records of high-profile politicians and journalists to a Gupta-linked company.

According to the report, she was paid R3,750 by a private investigations company for the mobile phone records of Trevor Manuel, Tiso Blackstar editor-at-large Peter Bruce, and Financial Mail editor Rob Rose.

Manuel, Bruce, and Rose are outspoken critics of the Gupta family.

Part of these records were published on Wmcleaks.com – a fake news website – on 13 August.

Bank of Baroda CEO Manoj Kumar also featured in the Wmcleaks report, and is accused of being a sellout to white monopoly capital for trying to close Oakbay’s accounts.

“Trevor via an untraceable middle-man had carried out around 30 calls to the Chief Manager of Bank Of Baroda SA, Manoj Kumar Jha,” states Wmcleaks.

“Many calls between Trevor and Rose have been verified within the time frame of the Oakbay’s accounts closure in BOB regarding the creation of this intimidation scenario.”

The Wmcleaks report added that “Rob Rose was also in constant touch with Peter Bruce within the said time frame”.

Shortly before the Wmcleaks article, Bruce wrote a column titled The price of writing about the Guptas.

He provided details on how he was followed and photographed, accused of cheating on his wife, and attacked online.

MTN confirmed the transgression by the employee, who did not arrive for a disciplinary hearing and instead resigned from the company.

“Providing call data records of a third-party to anyone outside of MTN is a serious and major violation of MTN’s internal policies and procedures,” said MTN.

Call details

Wmcleaks published an image of the call records detailed above.

 

Source: My Broadband 

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