TechCentralTechCentral
    Facebook Twitter YouTube LinkedIn
    Facebook Twitter LinkedIn YouTube
    TechCentralTechCentral
    NEWSLETTER
    • News

      How AI could transform financial services in emerging markets

      19 August 2022

      Standard Bank IT spending tops R10-billion in six months

      19 August 2022

      Blue Label expects robust full-year earnings growth

      19 August 2022

      Hungry Prosus to splurge up to R30.7-billion on iFood stake

      19 August 2022

      Sarb tells banks they should work with crypto exchanges

      18 August 2022
    • World

      15 September pegged as target date for ethereum’s big ‘Merge’

      19 August 2022

      Qualcomm gets serious about servers

      19 August 2022

      China blasts US over ‘discriminatory’ Chips Act

      18 August 2022

      Tencent reports first-ever sales decline

      17 August 2022

      Chip makers are flashing a big warning for the global economy

      17 August 2022
    • In-depth

      Are you a chronic procrastinator? Read this!

      18 August 2022

      African unicorn Flutterwave battles fires on multiple fronts

      11 August 2022

      The length of Earth’s days has been increasing – and no one knows why

      7 August 2022

      As Facebook fades, the Mad Men of advertising stage a comeback

      2 August 2022

      Crypto breaks the rules. That’s the point

      27 July 2022
    • Podcasts

      Qush on infosec: why prevention is always better than cure

      11 August 2022

      e4’s Adri Führi on encouraging more women into tech careers

      10 August 2022

      How South Africa can woo more women into tech

      4 August 2022

      Book and check-in via WhatsApp? FlySafair is on it

      28 July 2022

      Interview: Why Dell’s next-gen PowerEdge servers change the game

      28 July 2022
    • Opinion

      No reason South Africa should have a shortage of electricity: Ramaphosa

      11 July 2022

      Ntshavheni’s bias against the private sector

      8 July 2022

      South Africa can no longer rely on Eskom alone

      4 July 2022

      Has South Africa’s advertising industry lost its way?

      21 June 2022

      Rob Lith: What Icasa’s spectrum auction means for SA companies

      13 June 2022
    • Company Hubs
      • 1-grid
      • Africa Data Centres
      • Altron Document Solutions
      • Amplitude
      • Atvance Intellect
      • Axiz
      • BOATech
      • CallMiner
      • Digital Generation
      • E4
      • ESET
      • Euphoria Telecom
      • IBM
      • Kyocera Document Solutions
      • Microsoft
      • Nutanix
      • One Trust
      • Pinnacle
      • Skybox Security
      • SkyWire
      • Tarsus on Demand
      • Videri Digital
      • Zendesk
    • Sections
      • Banking
      • Broadcasting and Media
      • Cloud computing
      • Consumer electronics
      • Cryptocurrencies
      • Education and skills
      • Energy
      • Fintech
      • Information security
      • Internet and connectivity
      • Internet of Things
      • Investment
      • IT services
      • Motoring and transport
      • Public sector
      • Science
      • Social media
      • Talent and leadership
      • Telecoms
    • Advertise
    TechCentralTechCentral
    Home»News»Government, SOEs poured R49-billion into criminal enterprises

    Government, SOEs poured R49-billion into criminal enterprises

    News By Barbara Curson26 May 2021
    Facebook Twitter LinkedIn WhatsApp Telegram Email

    Paul Holden, co-founder and director of Shadow World Investigations, appeared at the Zondo commission of inquiry into allegations of state capture on Monday to give evidence on Gupta contracts with state-related entities.

    Shadow World Investigations focuses on cases of grand corruption, corporate malfeasance and militarism (co-founder Andrew Feinstein was an ANC MP until his resignation in 2001 when the party refused to properly investigate the arms deal).

    Holden gave a stupefying account of billions of rand paid from state-owned entities and other governmental organisations into a complex local laundromat. From here the “laundered” funds were transferred into further complex offshore arrangements in Hong Kong, China and Dubai. Ultimately, the funds ended up in Gupta-related enterprises.

    Holden has garnered evidence to demonstrate that organs of state dropped some R49.1-billion into criminal enterprises

    By tracking thousands of money flows emanating from tainted contracts through many different accounts and bank statements, Holden has garnered evidence to demonstrate that organs of state dropped some R49.1-billion into criminal enterprises. Some of these funds were recycled and used to purchase South African assets such as Optimum Holdings, and to support the liquidity of the enterprise’s “legitimate” businesses.

    Holden also showed how Nkonki Inc was bought with illegitimate funds.

    Money flows

    Holden has provided annexures containing relevant schedules as well as annexures showing flows of funds, bank statements and bank transactions. Every single transaction has been cross-referenced. He has identified all the key elements in more than 200 tables.

    Contracts have been deemed to be tainted where, for example, they were entered into without any competitive bidding, contained material irregularities, and were concluded with entities which he referred to as “first level laundries”. This is a company that does not conduct any business activities, or does not conduct any legitimate business.

    Tainted contracts

    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 and business development plan for the Free State department of agriculture & rural development, and Innova was combined with the contract. Holden said Innova was not a functioning business.

    These entities purported to provide engineering services. Innova management solutions was owned by Chwayita Mabude, but managed by Salim Essa and Ashok Narayan. Mabude was involved in a number of contract approvals for the Guptas; a former Eskom board member, she has previously appeared before the commission on Eskom-related evidence.

    The relevant MEC of the free state department of agriculture & rural development at the time was Mosebenzi Zwane.

    The money paid to Innova and Tsebo was paid to Aerohaven Trading. Aerohaven Trading then returned all the money received to Innova by bank transfer. In November 2013, Innova converted the total amount of R9.8-million into dollars and paid it over to Gateway Enterprises (the Gupta enterprise in Dubai).

    2. Homix
    The Free State department of economic development & tourism paid Innova R6.9-million, and Innova paid 91.5 % of this to Homix.

    Zondo asked if Innova and Homix were controlled by the same people. Evidence leader Matthew Chaskalson replied that the commission has seen no evidence that Mabude controlled Innova, and that the commission has seen evidence that Essa controlled Homix, and had represented Innova in dealings with the Free State.

    3. Regiments
    The Regiments Group earned R1.3-billion from Transnet, the Transnet Defined Benefit Pension Fund, South African Airways, SA Express, the Free State Provident Fund, Safcol and Denel.

    4. Trillian
    The Trillian Group earned R935.3-million from contracts with Eskom, Transnet, the Transnet Defined Benefit Fund and SA Express.

    5. McKinsey
    McKinsey was paid more than R1.8-billion in regard to contracts with Trillian and Regiments. Eskom paid R1.1-billion, Transnet paid R688-million and SAA paid R6.2-million.

    6. Neotel
    Transnet paid R5.6-billion to Neotel (the payments were first made to a front company called Chivita, then Homix, Forsure Consultants and finally Medjoul).

    7. SAP and PwC Nkonki
    Holden also discussed the contracts awarded to SAP Africa and the PwC Nkonki consortium.

    8. Cutting Edge/Sahara
    Cutting Edge submitted an unsolicited proposal (which is irregular) to Eskom on 29 April 2016 to provide data management and cleaning services to the utility. Eskom paid Cutting Edge R72-million 17 days later, on 16 May  2016. Another R24.4-million was paid to Cutting Edge. Holden told the commission that Sahara Holdings had bought 51% of the shareholding in Cutting Edge in 2014.

    Holden also calculated that more than R1.2-billion was paid to first-level laundering entities drawn from state funds.

    And so Holden continued – payment after payment, contract after contract, table after table. The final pot of gold always ended up with the Guptas.

    • This article was originally published on Moneyweb and is used here with permission
    Homix Innova Management Services McKinsey Mosebenzi Zwane Neotel Paul Holden PwC Regiments Sahara Computers SAP Shadow World Investigations top Trillian Tsebo Business Intelligence
    Share. Facebook Twitter LinkedIn WhatsApp Telegram Email
    Previous ArticleIran bans crypto mining to avoid national load shedding
    Next Article The rise and rise of Xiaomi

    Related Posts

    How AI could transform financial services in emerging markets

    19 August 2022

    Standard Bank IT spending tops R10-billion in six months

    19 August 2022

    Blue Label expects robust full-year earnings growth

    19 August 2022
    Add A Comment

    Comments are closed.

    Promoted

    Does your contact centre have the CX factor?

    19 August 2022

    Entelek, A2pay to roll out 2 500 free Wi-Fi sites in South Africa

    18 August 2022

    Companies are drowning in data – but solutions are at hand

    18 August 2022
    Opinion

    No reason South Africa should have a shortage of electricity: Ramaphosa

    11 July 2022

    Ntshavheni’s bias against the private sector

    8 July 2022

    South Africa can no longer rely on Eskom alone

    4 July 2022

    Subscribe to Updates

    Get the best South African technology news and analysis delivered to your e-mail inbox every morning.

    © 2009 - 2022 NewsCentral Media

    Type above and press Enter to search. Press Esc to cancel.