Hon. Yunus Carrim
Chairperson, Standing Committee on Finance
Parliament of South Africa
26 June 2017
SAA QUARTERLY REPORT BRIEFING: GORDHAN MUST GO FROM THE STANDING COMMITTEE ON FINANCE
It has come to our attention that tomorrow, 27 June 2017 the Chairperson of the South African Airways (SAA), Dudu Myeni, will appear before the Standing Committee on Finance to brief the Committee on its quarterly report. Former Minister of Finance, Pravin Gordhan is a member of that Committee.
It must be pointed out that Dudu Myeni had previously brought the corruption at the SAA, as indicated below, to the attention of the Committee which in turn had done nothing about it. We would like to warn the whole Committee including the Chairperson that they face possible criminal charges including contravening section 34 of the Prevention and Combating of Corrupt Activities Act, 2004 (Act No. 12 of 2004) – which BLF is currently contemplating preferring against them. In the circumstances we do not believe that this Committee should be pursuing any further matters until it has resolved the issue that amongst them is Pravin Gordhan whose sole mission is to harangue the Chairperson of the SAA Board so as to create a crisis that will precipitate the situation towards them privatizing SAA.
Black First Land First (BLF) demands that Pravin Gordhan recuses himself from the Standing Committee on Finance as there is overwhelming evidence that there is an apprehension of bias on his part which arises from him being conflicted, compromised and captured by white settler monopoly capital. To this end, evidence suggests that Gordhan might not, as a matter of real possibility, bring an impartial mind to bear upon the resolution of any issue(s) and or question(s) that may be identified in the briefing before the Committee as he wants the Chairperson of SAA removed for reasons stated herein.
It must be pointed out that the reasons why Finance Minister, Pravin Gordhan, wants the current chairperson of South African Airways (SAA), Dudu Myeni, out of the entity were revealed in late November 2016 when in a bold decision that left analysts shocked, he (Gordhan) instructed the Board of SAA to allow the controversial American consulting firm, Bain & Company, to “turn around” SAA by, amongst other things, privatizing 25% of the said entity.
In a letter instructing Myeni to cooperate with the American firm, Gordhan used his budget speech to justify bringing back Bain & Co. The company is the same firm that is accused of destroying SAA in a massive looting and privatisation process under its founder, Coleman Andrews, who was then the CEO of SAA.
BLF had, in September 2016, written to President Jacob Zuma to institute a Judicial Commission of Inquiry into the conduct of Bain & Co as well as Andrews. BLF has been angered by Gordhan’s total disregard for the assets of the nation by bringing back a company that has caused so much damage to the State Owned Entity (SOE), from which it is still to recover. BLF wrote to the President again and also staged a picket at the Head Office of SAA on Tuesday 29 November 2016 demanding that the SAA Board shouldn’t implement the illegal decision by Gordhan. BLF was assured on 29 November 2016 that the instruction by Gordhan wouldn’t be implemented. This assurance was given by the Acting CEO of SAA, Musa Zwane, who was mandated by the Board to engage the BLF delegation.
Hidden in the contract with Bain & Company is the undertaking to privatize SAA. There seems to be a coordinated strategy to achieve the sale of a large stake of SAA to white capital. The Board, which was handpicked by Gordhan, had established a committee which excluded the Chairperson who is seen as a stumbling block to looting by white capital which Gordhan wanted to unleash on SAA under the pretext of “turning SAA around”.
It must be remembered that Gordhan didn’t want Myeni as Chairperson and is alleged to be undermining her at every turn.
Moreover, Gordhan had signed a contract in October 2016 with Bain and Company. The agents of Gordhan in the Board had decided to agree on a 25% sale to white capital already. This would justify the move by Bain to effect such a msale. Dudu Myeni is evidently totally opposed to any privatisation of SAA and is also mortified by Gordhan’s decision to bring back Bain which has caused so much pain for SAA.
Bringing back Bain surprised many observers, more so because evidently under Myeni SAA has been turned around. The entity has reduced its loses which had been averaging R5 billion to R1.5 billion in the 2015/2016 financial year. Furthermore, the entity has not been given any cash guarantees, unlike many other state entities.
Pravin Gordhan is determined to sell a whole 25% of SAA to white capital. After the initial assault by Bain, which left SAA deeply indebted and without aircrafts, it can be correctly concluded that the entity shall not survive another cannibalisation by Bain through privatisation. The irony of this development is that opposition political parties, which gave Gordhan a standing ovation during his last budget speech, have turned a deaf ear to Gordhan’s manoeuvres to parcel out large chunks of SAA to white hands.
Gordhan, during his tenure as Finance Minister has correctly been accused of being a Minister of White Monopoly Capital and his moves on SAA as well as the numerous other instances catalogued below only serves to corroborate this accusation:
1. Gordhan has business ties to white capital which compromised his ability to serve the nation during his tenure as Minister of Finance and beyond. In this regard the “Register of Members’ Interests, 2015” in the “Joint Committee on Ethics and Members Interests” lists all the businesses that Gordhan has interests in. The said Register of Members’ Interests indicates companies and other entities that are accused of stealing R26 billion from the South African Reserve Bank (SARB) which is under the Ministry of Finance. Quite clearly, Gordhan will not investigate companies that he has shares in and is benefitting from.
2. A criminal case has been opened by the BLF at the South African Police Services (SAPS) against a number of white business persons including Johann Rupert for contravening section 4 of the Prevention and Combating of Corrupt Activities, 2004 (Act No. 12 of 2004). This case is essentially one of corruption involving state capture by white capitalist businesses. This case is currently being investigated by the HAWKS.
3. A complaint has also been lodged by BLF with the Public Protector regarding state capture by the same white business persons mentioned in number 2 including Johann Rupert. BLF further requested the President to institute a Judicial Commission of Inquiry on state capture. In addition BLF has presented the President, SAPS, HAWKS and the Public Protector with evidence that shows that these business persons and Johann Rupert have illegally interfered with the duties of the President to appoint ministers in terms of the Constitution which they claim to uphold.
4. Johann Rupert who is also the chairperson of the Swiss luxury goods conglomerate Richemont acted in a corrupt fashion when he summoned ANC leaders, specifically Cyril Ramaphosa and Trevor Manuel, and instructed them to ensure the firing of Des van Rooyen and the hiring of Pravin Gordhan as Minister of Finance. In this regard, Johann Rupert has interests in the economy, so he wanted Gordhan as Minister of Finance who would take care of his interests.
5. How Gordhan handled the saga of the closure of the Oakbay bank accounts last year further demonstrates that Gordhan is conflicted, compromised and beholden to white monopoly capital. In April 2016 Oakbay publicly announced that the banks had closed its banking accounts and that that its auditors (KPMG) as well as its sponsor on the Johannesburg Stock Exchange, Sasfin, have terminated their services with it. Oakbay indicated that the banks had acted irregularly and unjustifiably in closing its accounts and to this end it had made several approaches to Gordhan, to seek his intervention (on behalf of government) to approach the banks so as to reverse their decision to close its accounts.
6. In this regard, Gordhan was unable to execute his tasks which entailed following a process sanctioned by Cabinet. He failed to attend a single Inter Ministerial Committee meeting to deal with the issue. On 14 October 2016 he chose instead, and at state expense, to approach the High Court (Gauteng Provincial Division, Case Number 80978/16) for an order that he is “not by law empowered or obliged to intervene in the relationship” between the four major banks and Oakbay regarding the closure of the Oakbay bank accounts.
7. Evidence in rebuttal has shown that the allegations that Oakbay had shifted funds illegally out of the country, is false. To this end approval from SARB to transfer funds to the Bank of Baroda under a new account was clearly requested by the Business Rescue Practitioners (BRP). Hence the accusations of the so-called tax loss and threat are unfounded.
8. The fact that Oakbay is a primary competitor of the businesses that Gordhan has shares in, further explains why he cannot be impartial.
9. Quite clearly the said High Court application by Gordhan was intended to serve the banks (in which he has shares) which ensured that he be appointment as Minister of Finance. This further demonstrates how he used his position as Minister of Finance to serve his business partners.
10. Pravin Gordhan has shares in ABSA, the same bank which is facing corruption charges for stealing R3.2 billion from SARB which is under his Ministry – the same bank that the Public Protector, Advocate Mkhwabane, has decided must pay back R1.125 billion.
11. Gordhan is a beneficiary of BHP Billion which has consumed 11% of the national energy and is increasing the energy burden through its unethical deal that is tantamount to a subsidy from the state.
12. Gordhan has shares in Remgro, which is owned by Johann Rupert who is, as indicated above, being investigated by the HAWKS for state capture in relation to the hiring of himself (Gordhan) as Minister of Finance. Moreover, Rupert as indicated herein is accused of being one of the white business people who stole R26 billion from SARB.
13. On 16 November 2016 BLF opened a case with the SAPS against Johann Rupert and 16 others for the theft of R26 billion from SARB. BLF has also requested that the case be looked into by the HAWKS. Gordhan benefits directly from many of the businesses implicated in the theft of the R26 billion from SARB which is under the Ministry of Finance that he ran during his tenure as Finance Minister. Gordhan’s conflict of interest situation prevented him from investigating companies that he has business interests in.
14. The war between Treasury and ESKOM is about promoting the interests of white settler monopoly capital. White settler monopoly capital is angry that under Brian Molefe and Dr Ben Ngubane, black business has been transacting more with ESKOM. White capital thus far has targeted the Gupta family who after buying a subsidiary of the Swiss conglomerate, Optimum Coal, has been able to secure a deal to supply about 5% of ESKOM’s coal needs. White capital will not ask who supplies the rest of the coal needs of ESKOM. It is protecting its hegemony and using Treasury to fight its battles.
15. Gordhan was appointed as the then Minister of Finance on the command of the white capitalists who were being served by Treasury. The current crisis over state owned enterprises (SOEs) are part of the ongoing “state capture” by white capital.
16. Companies like Anglo American and Remgro (in which Minister Gordhan has shares) do business with SOEs such as Eskom. Gordhan benefits out of businesses that do business with the State. This is why could not be impartial as Finance Minister.
17. Gordhan has consistently shown that his first priority is to defend white monopoly capital, not the interests of the country. There was accordingly no likelihood that SARB, under Gordhan, would have done anything to assist in the process of recovering the R26 billion that was stolen by apartheid era white capitalists and politicians from SARB.
18. On 15 February 2017 the Competition Commission found that the following 17 banks were guilty of collusion: Bank of America Merrill Lynch International Limited, BNP Paribas, JP Morgan Chase & Co, JP Morgan Chase Bank N.A, Investec Ltd, Standard New York Securities Inc., HSBC Bank Plc, Standard Chartered Bank, Credit Suisse Group; Standard Bank of South Africa Ltd, Commerzbank AG; Australia and New Zealand Banking Group Limited, Nomura International Plc., Macquarie Bank Limited, ABSA Bank Limited (ABSA), Barclays Capital Inc, Barclays Bank plc. This finding by the Competition Commission confirms the conclusion the banks operating in South Africa, including South African banks, are common criminal organizations which were protected by Pravin Gordhan (during his tenure as Finance Minister) and the South African Reserve Bank (SARB).
19. On 17 February 2017 BLF called for SARB to start criminal proceedings against the above 17 banks for collusion which in turn resulted in a loss of R500 billion. Gordhan has shares in many of these banks and benefits directly from the proceeds of the criminal activities of the banks. Gordhan was compromised and conflicted as the then Minister of Finance by having shares in these banks. Hence SARB under Gordhan did not proceed against these banks by way of criminal prosecutions.
20. On 22 Feb 2017 BLF laid a charge against Pravin Gordhan for contravening section 34 of the Prevention and Combating of Corrupt Activities Act, 2004 regarding his failure to report criminal activity that was reported to him by Deputy Finance Minister, Mcebisi Jonas as indicated in the “State of Capture” report of the Public Protector. To this end Mr Jonas has claimed that he was offered the position of Minister of Finance and money in exchange for certainy favours by a Gupta family member and that he rejected the offer “out of hand”. The fact that the alleged offence was reported to Pravin Gordhan who in turn did not report it to the appropriate authority, is in itself an offence committed by him.
21. A leaked HAWKS memorandum dated 17 March 2017 revealed conclusive evidence of corruption and theft of R11 million by Pravin Gordhan from the Special Pension Fund at the Department of Defence and Military Veterans.
22. The Special Pension Fund excludes public officials from benefitting from it and Gordhan, who was a public official at the time of the coming into effect of the fund, illegally benefited millions from it. Gordhan received the said millions from the then Head of the Pensions Fund, Marion Mbina Mthembu, who subsequently corroborated this allegation in a meeting with the HAWKS on 15 December 2016. In this regards the HAWKS were referred by Mthembu to Kabelo Jonathan of the Government Pension Administration Agency (GPAA). The evidence against Gordhan in this regard suggests that he is criminally liable and to this end should be prosecuted to the full extent of the law.
23. Gordhan is also accused of serious contraventions of the law which occurred during his tenure as Commissioner of the South African Revenue Services (SARS). To this end, under his watch, a “Rogue Unit” was set up which engaged in serious violations of people’s rights.
24. There is strong evidence to this effect that SARS under Gordhan unlawfully used over R106 million to run the secret “Rogue Unit” in the interests of white monopoly capital while infringing upon citizens rights. To this end SARS consistently lied about the existence of the “Rogue Unit” to the public.
25. Three credible investigations have found that the “Rogue Unit” was formed and that it did in fact exist illegally. To this end damning evidence was presented before the Sikhakhane Commission whose findings were subsequently confirmed by a KPMG report.
26. The white media including the Mail and Guardian and the Rapport are amongst those implicated in working closely with the “Rogue Unit” at SARS in service of white monopoly capital. The white media has staunchly defended Gordhan in this respect.
27. Evidently, Gordhan’s strategy, which he has been consistently applying, is to employ the media to launch a defence so as to discredit the investigation into the Rogue Unit and the criminal prosecutions that’s likely to follow against him.
28. In all of the above circumstances there is accordingly overwhelming evidence suggesting unethical and criminal conduct on the part of Gordhan which, amongst other things, links him to white capitalists who insisted that he be appointed the Minister of Finance.
29. It is clear therefore that Gordhan ought to have recused himself from that position of Minister of Finance as soon at it became public that his business associates had insisted that he be appointed. To this end President Zuma correctly removed Gordhan as Minister of Finance as he was evidently conflicted, compromised and captured by white capital and by extension was unfit to be a Minister of Finance.
30. Right now the country cannot afford to have a member of the Standing Committee on Finance – being Pravin Gordhan – who is not impartial and is beholden to white monopoly capital.
In all of the above circumstances, there is clearly a strong apprehension of bias on the part of Pravin Gordhan. He is to this end conflicted, compromised and captured by white settler monopoly capital and consequently not a fit and proper person to be part of or sitting on the Standing Committee on Finance and considering issues and questions arising out of the briefing by the SAA. He must in the first place recuse himself from this matter for the reasons indicated above and secondly he must be removed as a member of the Standing Committee on Finance. Gordhan must go!
Yours in the revolution
Black First Land First (BLF): President
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