DA welcomes SARB’s decision to place VBS under curatorship

The DA welcomes the announcement today by the South African Reserve Bank (SARB) Governor, Lesetja Kganyago, that the VBS Mutual Bank has been placed under curatorship.
This action was triggered by VBS’s inability to find sufficient funding following National Treasury instructing municipalities to stop investing with the bank and withdraw their funds.
Section 7 of Municipal Finance Management Act (MFMA) states that a municipality may not open a bank account with an institution not registered in terms of the Banks Act and mutual banks, such as VBS, are not registered in terms of the Act.
The DA had been concerned for the safety of municipal deposits for some time and therefore submitted a Parliamentary Question to the former Minister of Finance, Malusi Gigaba, probing the extent of exposure of municipal deposits with VBS.
Minister Gigaba responded saying that only 2 municipalities had investments with VBS, as at 30 June 2016. The municipalities being West Rand District Municipality and Capricorn  District Municipality.
According to Governor Kganyago, this has subsequently increased to 21 municipalities and deposits in excess of R1.5 billion.
The DA, therefore, supports the actions taken by Treasury and SARB to safeguard the funds of municipalities and other depositors with VBS Mutual Bank.
We will submit further questions to determine the true extent of municipal exposure, why and how this issue arose, and whether municipal officials will be held responsible for their illegal actions.

FSB and others fail to respond to finance committee on the scandal surrounding Steinhoff

A copy of the correspondence between DA Shadow Minister of Finance, David Maynier MP, and the Chairperson of the Standing Committee on Finance, Yunus Carrim, is enclosed [here].

To his credit, the Chairperson of the Standing Committee on Finance, Yunus Carrim, wrote to a number of institutions on 14 December 2017 requesting them to provide information within seven days, or as soon as possible thereafter, on the scandal surrounding “accounting irregularities” at Steinhoff International Holdings N.V.

These institutions included the Financial Services Board, Government Employees Pension Fund, Independent Regulatory Board of Auditors, Johannesburg Stock Exchange, National Treasury, Public Investment Corporation and the South African Reserve Bank.

However, finance committee members have only received three responses, including responses from:

• Bernard Agulhas, the Chief Executive Officer of the Independent Regulatory Board of Auditors, on 14 December 2017;
• Lesetja Kganyago, Governor of the South African Reserve Bank, on 18 December 2017; and
• Linda Mateza, Acting Principle Executive Officer, Government Employees Pension Fund, on 19 December 2017.

This despite the fact that the scandal surrounding “accounting irregularities” at Steinhoff International Holdings N.V. is a matter of enormous public importance that has wiped out the savings of thousands of ordinary people in South Africa.

It is completely unacceptable for the Financial Services Board, Johannesburg Stock Exchange, National Treasury and Public Investment Corporation to be asleep at the wheel and fail to respond to the Standing Committee on Finance.

That is why I have written to the Chairperson of the Standing Committee on Finance, Yunus Carrim, requesting him to light a fire under the defaulters and demand that they immediately respond to the request for information on the scandal surrounding “accounting irregularities” at Steinhoff International Holdings N.V.

Parliament to push ahead with removal of Public Protector proceedings

The DA notes that our request for Parliament to initiate proceedings to remove the Public Protector, Adv. Busisiwe Mkhwebane, in terms of Section 194 of the Constitution, has been tabled and referred to the Portfolio Committee on Justice and Correctional Services for consideration.
We now call on the Minister of Finance, Malusi Gigaba, and the Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, to appear before the committee to detail their objections to the Public Protector’s deeply flawed ABSA/Bankorp report.
An affidavit filed by Gigaba, in the North Gauteng High Court this week, describes the report as “manifestly lacking in logic” and notes that Mkhwebane “reached conclusions of fact and law without any proper appreciation and sound analysis of the documents that were before her.” Kganyago previously noted, in the SARB court application to have the report’s recommendations set aside, that “[t]he only explanation that the Public Protector has offered for her clearly unlawful conduct exposes her own lack of competency.”
The DA contends that the conduct of Adv. Mkhwebane over the past ten months has demonstrated that she is not fit to occupy the important position of Public Protector. Her conduct includes but is certainly not limited to:

  • Grossly over-reaching her powers by recommending that the Constitution be amended to alter the mandate of the SARB;
  • Grossly over-reaching her powers by dictating to Parliament how and when legislation should be amended;
  • Showing a poor understanding both of the law as well as her own powers in relation thereto; and
  • Sacrificing her independence and impartiality by consulting with the Presidency and the State Security Agency on remedial action to be recommended in her report

Indeed, the North Gauteng High Court found, on 15 August 2017, that the Public protector had “unconstitutionally and irrationally” intruded on Parliament’s exclusive authority and that she had gone about crafting her recommendations in the ABSA/Bankorp report in a “procedurally unfair” manner.
The DA was the only party that opposed Mkhwebane’s appointment as Public Protector. We hope that this time around the ANC and other opposition parties will listen carefully to our reasons for having her removed.

Those involved in State Capture will be held to account, whether in private sector or government

The following statement was delivered today by Democratic Alliance (DA) Leader, Mmusi Maimane, at a press briefing in Parliament, Cape Town. Maimane was joined by Federal Executive Chairperson, James Selfe, and DA Chief Whip, John Steenhuisen
I want to begin by welcoming yesterday’s decision by ANC Member of Parliament, Dr Makhosi Khoza, to quit the ANC. For many, it is not an easy decision to leave the party of liberation in South Africa. She must congratulated for her bravery and integrity, and we hope the many like her within the ANC come to the same realisation she did: that the ANC is dead, and beyond the point of no return. Dr Khoza summed this up yesterday, when she said:
“If we were to prosecute all known corrupt cases including those implicated in the Gupta e-mails‚ almost 80–90% of the ANC leadership at all levels of government would have to replace their shiny tailored suites and pretty dresses with orange overalls”
It’s time for a new beginning for our nation, and that new beginning lies in a post-ANC South Africa.
Corruption is an oppressive system that operates to destroy work opportunities, and operates against ordinary South Africans at the expense of a few. Whether it is a councillor who accepts a bribe for an EPWP job, or a senior executive at a large corporate firm who unduly wins government contracts – South Africans suffer because of this. Our challenge is to dismantle corruption is all its forms.
Ever since the infamous “Gupta leaks” some months ago, our nation has been knocked with daily revelations and new information pertaining to the intricate web of corruption, extortion, and undue influence exercised by the President, numerous ministers in his cabinet, and the infamous Gupta family.
The emails, and the information uncovered subsequent to that, provides a surfeit of evidence showing that our country has been captured by the President and his ANC government to make themselves and their friends rich – while ordinary South Africans suffer in the plight of unemployment and poverty. It is this state capture and corruption the ANC continues to condone and protect.
However, over the past weeks, the extent of the rot of state capture and grand corruption in our nation has become chillingly apparent. The recent revelations that private sector companies, such as KPMG and McKinsey, allegedly aided Gupta-aligned companies to profit from government contracts drove home the uncomfortable reality that our country has truly been captured in its entirety – and our young democracy is under siege.
As the Democratic Alliance (DA), we maintain that anyone implicated in any form of corruption, collusion or State Capture – in either the public and private sector – must be held accountable and face the consequences of their actions. As such, we have begun tackling this issue head on, in order to ensure those who engage in corruption are brought to book for their actions.
Private Sector
International auditing firm, KPMG, has become embroiled in the state capture saga by allegedly providing technical international tax advice to Gupta-aligned companies and by helping facilitate funds being moved from South Africa to Dubai. The firm assisted with tax avoidance advice as well as the setting up of shell companies, which assisted Gupta-owned Linkway Trading in laundering R30-million in public funds to pay for the family’s 2013 Sun City wedding.
Since these revelations, the wheels of accountability have begun to turn at KPMG, with the forced resignation of at least 7 of its top executives– including the firm’s CEO and COO. Moreover, KPMG has signalled its intention to donate the profits earned to charity, and KPMG International has launched an internal investigation into this matter.
We welcome the fact that those who carried out corrupt work for Gupta-aligned companies are being held accountable for wrongdoing. However, there is still more to do. As such, we call on KPMG to take the following steps:

  • To offer a public explanation as to the details surrounding the KPMG report into the so-called “rogue unit” at SARS, which was used to undermine the South African Revenue Service (SARS). KPMG must clarify how the end product came about, why they failed their own internal quality controls, and whether anyone from SARS interfered in the process;
  • To open its books and make public all its dealings with those involved in state capture, including all Gupta-aligned companies and any government entities;
  • To ensure every individual implicated in any underhand work done for Gupta aligned interests be removed from the firm; and
  • To make public any bonuses or severage packages handed to senior executives following their removal or forced resignation.

I will also be writing to the Governor of the South African Reserve Bank (SARB), Lesetja Kganyago, requesting that he confirm whether senior management at KPMG, or anyone else employed by them, reported any suspicious transactions to the Financial Intelligence Centre (FIC), as they would be obliged to do in terms of Section 29(1)(b) of the FIC Act 38 of 2001.
In addition to KPMG, international consultancy firm, McKinsey, appears to have paved the way for Gupta-linked firm Trillian to make hundreds of millions of rands from Eskom as it sub-contracted 30% of its Eskom work to the Trillian under the guise of ‘supplier development”.
Earlier this week, the DA laid criminal charges of fraud, racketeering and collusion in terms of Section 21 of the Prevention and Combatting of Corrupt Activities Act (PACCA) against McKinsey. We believe there are other avenues that ought to be pursued in addition to these charges. Therefore, I will be writing to the Serious Fraud Office (SFO) in London – where McKinsey’s Headquarters are located – requesting an investigation into the dealings in terms of the UK’s Bribery Act.
The DA will not back down in our pursuit of full accountability in these matters. As was evident in the Bell Pottinger case, those in the private sector who are caught in dodgy dealings with the powerful and the corrupt will be brought to book and face full accountability.
Public Sector
While the private sector has been responsive to these allegations and initiated accountability, when it comes to government, those at the top have thus far gotten away with corruption, collusion and aiding State Capture. In particular, cabinet ministers – including Malusi Gigaba, Lynne Brown, Des Van Rooyen, Mosebenzi Zwane and Faith Muthambi among others – face a litany of  State Capture allegations. Yet to date, not one minister has been held to account.
Section 92 of the constitution is clear: Ministers are accountable collectively and individually to Parliament for the exercise of their powers and performance of their functions. Moreover, section 237 of the constitution provides that constitutional obligations must be performed diligently and without delay.
However, this has not occured and it appears Parliament is in the process of breaching its constitutional obligations again – as the Constitutional Court found it to have done in the infamous Nkandla matter.
I had previously written to the Speaker on 29 May 2017 requesting that a draft resolution be placed on the Order Paper to establish an ad hoc committee to investigate these matters, as this would be the most appropriate way to holistically pursue accountability. This ad hoc committee was never established. Instead, on 20 June 2017, House Chairperson, Mr Frolick tasked the Portfolio Committees of Mineral Resources, Public Enterprises, Transport and Home Affairs with the responsibility of “urgently” probing the allegations of state capture insofar as they concerned those Ministers or departments.
Despite the mandate to probe “urgently”, these committees have proceeded with their work at a snail’s pace. Only the Public Enterprises Committee has appointed an evidence leader and has begun to hold hearings, however their probe is focused solely on Eskom, and excludes other players such as Transnet and Denel. The remaining three committees have achieved nothing in this regard.
Therefore, we are of the view that both the appointment of the four separate committees, instead of a single ad hoc committee, as well as the obfuscation and delays that have characterised the work of these committees constitute a deliberate attempt to undermine the responsibility of the National Assembly to hold the Executive to account. Even if not deliberate, the mere lack of urgency by the committees frustrates the National Assembly’s constitutional mandate.
It is for this reason that I have today written to Ms Baleka Mbete, the Presiding Officer of the National Assembly, requesting that our draft resolution be placed on the Order Paper to establish an ad hoc committee into State Capture by no later than 31 October 2017. The Speaker has now been put on notice and must act without delay. Given this and the seriousness and importance of these matters, we must place on record that if the Speaker does not issue the instruction concerned, we reserve our right to approach a Court for appropriate relief.
Furthermore, we request that the Speaker sees to it that a Disciplinary Committee is established – in terms of Rule 216 of the National Assembly Rules – to consider whether any of the following Ministers have acted in breach of their constitutional duties:

  • Malusi Gigaba
  • Faith Muthambi
  • Des Van Rooyen
  • Lynne Brown
  • Mosebenzi Zwane

We maintain that everyone involved in State Capture – ministers, companies, and any other individuals – be summoned to Parliament to be interrogated and held accountable if found guilty. We need to urgently get to the bottom of State Capture and its corrosive effect on our nation and its people.
As the official opposition, we will continue fighting corruption and State Capture with every possible instrument, because without defeating it, we cannot address our stubborn unemployment rate and we will never achieve economic freedom and equality for all South Africans. Only when we have defeated corruption, can we defeat the social ills prevalent in South Africa.
Ultimately, South Africans have the power to vote out State Capture and corruption at the ballot box in 2019, and choose a new beginning for our country.