‘South Africa lost R49 bn due to state capture, corruption’

‘South Africa lost R49 bn due to state capture, corruption’

The commission of inquiry into state capture has heard that South Africa lost R49 billion to state capture and corruption-related activities.

Paul Holden

Paul Holden, from Shadow World Investigations in London, appeared at the commission on Monday.

Holden testified via Zoom from the British capital.

He testified on the amounts paid by different government departments, including the Free State provincial government, the North West government, and several SOEs, through contracts tainted by state capture.

Most of these monies were paid directly to companies not owned by the Guptas, but linked to them through their business associates.

 But the money subsequently ended up directly into Gupta-owned entities. 

He said one example was an amount of R12 million that was paid to a company called Tsebo Business Intelligence in 2012 by the Free State Department of Agriculture. A week later, Tsebo Business Intelligence paid R9 million into an account belonging to a company called Innova Management Solutions.

 Holden said Innova was owned by a former Eskom board member Chwayita Mabude, but managed by Gupta associate Salim Essa. 

 This was during the time Mosebenzi Zwane was the MEC for Agriculture in the province.

 He also confirmed that Innova opened its bank account two months before Tsebo Business Intelligence made the payment. 

Holden said the rest of the money was paid to consultancy firm McKinsey & Co, auditing firm Deloitte, KMPG and others. 

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 Holden said the SABC paid R62.7 million to a Gupta-linked entity between September 2015 and February 2017.

 "The amounts that were paid to Lorna Vision were subsequently paid to an entity called Customer Communications Services company and from there to a Gupta enterprise laundry vehicle by the name of Barissa Projects.”

 Lorna Vision was contracted to the SABC to provide debt collection services.

 One of its directors is Kuben Moodley, who is alleged to be a Gupta fixer. 

Holden said the state made significant losses through kickbacks to the Guptas from third-party contractors and inflation of prices by third-party contractors.

 "I do not attempt to quantify the losses suffered by the state in relation to Gupta enterprise-related state capture, but I think I can say with an extremely high level of confidence that the amount far exceeds just under R16 billion that was paid to the Gupta enterprise from state capture." 

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