State organs have invested over 49 billion rand in criminal enterprises
Paul Holden, co-founder and director of Shadow World Investigations, appeared on Monday, May 24, before the Zondo commission of inquiry into state capture allegations to testify about Gupta’s contracts with state-linked entities.
Shadow World Investigations focuses on cases of grand corruption, corporate mischief and militarism (co-founder Andrew Feinstein was an ANC MP until his resignation in 2001 when the party refused to properly investigate the armament agreement).
Holden gave a staggering account of billions of rand paid for by public entities and other government organizations at a complex local laundromat.
From there, the “laundered” funds were transferred into other complex offshore deals in Hong Kong, China and Dubai. Ultimately, the funds ended up in companies linked to Gupta.
By tracking thousands of streams of money from corrupt contracts through many different accounts and bank statements, Holden has gathered evidence to show that state bodies have dumped some R49.1 billion in criminal enterprises. .
Some of these funds were recycled and used to purchase assets of SAs such as Optimum Holdings and to support the liquidity of the “legitimate” activities of the company.
Holden also showed how Nkonki Inc was bought with illegitimate funds.
Holden provided appendices with relevant tables as well as appendices showing cash flows, bank statements and bank transactions.
Each transaction has been referenced. He identified all the key elements in over 200 tables.
Contracts were found to be flawed when, for example, they were concluded without a call for tenders, contained significant irregularities and were entered into with entities which he described as “first level laundries”. This is a company that does not conduct any commercial activity or conduct any legitimate commercial activity.
1. Innova and Tsebo
Contracts were awarded to Innova Management Services and Tsebo Business Intelligence by the Free State Department of Agriculture and Rural Development in 2012.
Tsebo was to develop a master plan and business development for the Free State Department of Agriculture and Rural Development, and Innova was associated with the contract. Holden said Innova was not a functioning company.
These entities were supposed to provide engineering services. The Innova management solutions were owned by Chwayita Mabude, but were managed by Salim Essa and Ashok Narayan. Mabude has been involved in a number of contract approvals for the Guptas; a former member of Eskom’s board of directors, she has already appeared before the Eskom Evidence Committee.
The competent MEC of the Free State Department of Agriculture and Rural Development at the time was Mosebenzi Zwane.
The money paid to Innova and Tsebo went to Aerohaven Trading. Aerohaven Trading then returned all the money received to Innova by wire transfer. In November 2013, Innova converted the total amount of R 9.8 million into dollars and paid it to Gateway Enterprises (the Gupta company in Dubai).
The Free State Department of Economic Development and Tourism paid Innova 6.9 million rand, and Innova paid 91.5% to Homix.
Zondo asked if Innova and Homix are controlled by the same people. Evidence leader Matthew Chaskalson SC responded that the commission had seen no evidence that Mabude controlled Innova, and that the commission had seen evidence that Essa controlled Homix and represented Innova in relations with the Free State.
The Régiments group earned 1.3 billion rand from Transnet, the defined benefit pension fund Transnet, SA Airways, SA Express, the Free State provident fund, Safcol and Denel.
The Trillian group earned R 935.3 million from contracts with Eskom, Transnet, the Transnet Defined Benefit Fund and SA Express.
Read: Regiments and Trillian: the whistleblower joins the dots (December 2020)
McKinsey has received over 8 billion rand (802,400,000 rand) under contracts with Trillian and Regiments. Eskom paid R108,200,000, Transnet paid R688,000,000 and SAA paid R200,000.
Read: McKinsey worked with Trillian after learning about Gupta connections (November 2017)
Transnet paid Neotel 582 million rand (payments were first made to a shell company called Chivita, then Homix, Forsure Consultants and finally Medjoul).
7. SAP and PwC Nkonki
Holden also discussed contracts awarded to SAP Africa and the PwC Nkonki consortium.
8. Edge / Sahara
Cutting Edge submitted an unsolicited (which is irregular) proposal to Eskom on April 29, 2016 to provide data management and cleaning services to the utility. Eskom donated 72 million rand to Cutting Edge 17 days later on May 16, 2016. Another 24.4 million rand was paid to Cutting Edge. Holden told the commission that Sahara Holdings bought 51% of the stake in Cutting Edge in 2014.
Holden also calculated that more than R 1.2 billion was paid to top-tier laundering entities out of public funds.
And so Holden continued – pay after pay, contract after contract, table after table.
The last pot of gold always ended with the Guptas.