Is the end in sight for the president? How did we get here? A dummies’ guide to the Zuptas – Part 2

How to derail Transnet’s piggy bank

The house of cards so carefully built by the Gupta-government alliance finally seems to be coming down, but will we ever know the true extent of the corruption, or just how many billions were looted out of state coffers? In this, the second part of our dummies’ guide to state capture, we’ll take a look at one of the ways the brothers managed to extract billions from Transnet.

An unholy trinity – Malusi Gigaba, Brian Molefe and Anoj Singh

As Minister of Public Enterprises, Malusi Gigaba wielded incredible influence over state owned enterprises, and owing to his powerful position, was able to appoint two – let’s perhaps call them “pliable” – individuals to key roles in the Transnet executive structures. Brian Molefe, the later CEO of Eskom, could prove his usefulness in the role of chief executive officer at the rail company, while Anoj Singh (future Eskom CFO) could act with impunity as the newly appointed chief financial officer. In short, this unholy alliance would oversee Transnet’s acquisition of 1 064 locomotives – a deal worth R50 billion.

Images: The Citizen

Some pretty big numbers

When amaBhungane and Scorpio released the #GuptaLeaks in June 2017, South Africans were in disbelief at just how much money was in play regarding the alleged corrupt dealings of the Gupta Empire. Of the 1 064 locomotives Transnet wanted, 359 were to be supplied by a company owned by China South Rail (CSR) – a deal worth R18.1 billion. CSR had also been awarded two previous contracts: firstly, for 95 locomotives costing R2.7 billion; and secondly, for 100 more freight trains costing R4.4 billion. In total, the 554 locomotives would bag CSR R25.2 billion.

How to make kickbacks look legitimate

It would seem that CSR had to employ the services of “consulting” firms to help win the tenders. The “consulting fees” for each of the 3 contracts totalled an impressive R5.3 billion, about 20% of the R25 billion (your tax money put to good use). The consultation fees were initially paid to two obscure companies, one of which was linked to Piyoosh Goyal, an Indian business man who was later investigated as part of a high profile bribery case. Given this complication, a new destination for the illicit funds was needed – enter Salim Essa.

A blue chip giant cashes in on the looting frenzy

Salim Essa was the sole director of the newly founded Tequesta Group Ltd., and was happy to provide further “consulting”  services to CSR – and a bank account that could accept billions in kickbacks… er, I mean billions in payments. As a faithful Gupta lieutenant, Essa’s services were further rewarded as he was to co-found Trillian Capital Partners, the firm McKinsey employed as their BEE partner when providing consulting services to Eskom. McKinsey, however, had their fingers in the Transnet pie, too. The blue chip giant headed a group of firms aiding the massive locomotive procurement project; one of these firms was Regiment Capital, the director of which was Eric Wood. Regiment played a key role in CSR winning the large contract, and Wood, having proven himself a lucrative asset to the Guptas, was the second founder of Trillian.

The story could go on, but at this point, you probably get the picture as to how these guys work. Look out for part three of our dummies’ guide to get a fuller picture of the Eskom controversy.

Caxton Central

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