SAFTU rejects repackaged old neoliberal and austerity programmes that have dismally failed for the past 24 years
October 9, 2018
SAFTU calls on new Finance Minister to reverse austerity
October 10, 2018

SAFTU welcomes Nene resignation

03 October 2018: Nhlanhla Nene, Minister of Finance South Africa. Is seen at the commission of inquiry into state capture that is chaired by the deputy chief justice Raymond Zondo.Picture: Thapelo Morebudi.

The South African Federation of Trade Unions welcomes the resignation of Finance Minister Nhlanhla Nene after he misled the people of South Africa when, in numerous interviews before, he had told the people that he never officially met the notorious Gupta brothers but then went to concede in the Zondo Commission of Inquiry on state capture that he met them seven times including in their own residence. This caused him to lose the trust of the majority of South Africans.

The federation acknowledges that Nene was one of the few government ministers who took a stand against corruption when he refused to sign three deals former president Jacob Zuma ordered him to approve – the nuclear deal; the SAA leasing deal with Airbus; and the bid by PetroSA to buy the Malaysian stake in Engen.

That in no way however excuses him from falsely denying that he had attended seven meetings with the Guptas.

SAFTU is even more concerned at serious allegations made against him when he was Deputy Finance Minister in which capacity he served as chairperson of the Public Investment Corporation.

The PIC manages a fund of nearly R2 trillion on behalf of the government workers’ pension funds and is the biggest shareholder on Johannesburg’s stock exchange. It is governed by very strict rules and procedures on how this workers’ money should and should not be invested.

One controversial deal was the funding of companies belonging to controversial media owner Iqbal Survé. The PIC’s board is investigating how it paid R4.3-billion for a 29% stake in Survé’s Ayo Technology Solutions even though its assets were estimated at R292-million.

This is one the matters we now know Nene discussed with the Guptas at one of their meetings. Both they and Survé wanted to acquire a stake in Independent Newspapers .

It was alleged that at the time Nene had argued at the PIC in favour of the Guptas, to the consternation of those who wanted Survé to acquire the group for the same reasons that the Guptas did: to buy political clout through an ANC-supporting newspaper group. This is a matter that must be investigated.

The most serious allegation against Nene is that he chaired a meeting that decided to award over a billion rands worth of investment to a company in which his son Siyabonga was involved, to finance a huge investment in a palm oil refinery in in Mozambique.

The PIC’s records confirm that “PIC has been approached by a South African company lndiafrec Trade & Invest (Pty) Ltd to establish and fund the consortium to facilitate a 50% acquisition of S&S Refinery LDA In Mozambique… Indiafrec … is the brain child of two young entrepreneurs, Muhammad Amir Mirza and Siyabonga Nene.”

It approved the application and invested R1 billion in the project.

Nene says he did not know of his son’s involvement until after the decision to approve the deal and that he would not have looked at it as board chairperson. But this begs the question of why the PIC chose to look at such an obscure and risky investment at all and continued to subsidize it by paying a R14 164 000 “referral fee” to Mirza, rather than Indiafrec the company, so that he got the credit for having “introduced the potential investment” to the PIC.

The PIC’s own assessment of the project’s performance, in its published schedule of unlisted investments at 31 March 2017, was that it had achieved an 6.38% rate of return against an expectation of 24% and gave it an ESG (economic, social and governance) score of only 20%, categorising it as a “laggard”, the lowest category.

These allegations are serious enough for Nene to be asked to resign, pending a full independent investigation into the matter. SAFTU has always insisted that the NPA must be consistent in investigating all allegations of corruption and that there must be no exceptions. If any allegations are shown to be justified by the evidence the those implicated must be prosecuted.

The federation utterly rejected any argument that Nene should be excused because his removal would adversely affect the rand, share prices, and their profits.

The one positive outcome of the allegations against Nene is that it has confirmed SAFTU’s view that corruption is not, and never has been, confined to a small circle of families, government ministers, SOE executives and their cronies, but is much more widespread.

Little attention was given to Nene’s comment to the State Capture Inquiry, in respect of the Gupta meetings, that “I regarded the visits as one of my tasks as deputy minister to engage with different stakeholders in the economy.”

This suggests that there is regular contact between government and business, about which nothing is ever revealed to the South African public. While many of these meetings may be perfectly legitimate, the lack of transparency inevitably raises suspicions that the Guptas are not the only ones who have used such meetings to request favours from the government.

There is a growing list of private companies who have either been involved with the Guptas – McKinsey, SAP, KPMG, Bell Pottinger – and others involved in financial malpractices in companies unconnected to the Guptas – Steinhoff, Bain, Carilion, Naspers.

SAFTU has always been convinced that corruption is embedded within the capitalist system which thrives on the principle of ‘Me first’ and ‘Get rich as quickly as possible’.

SAFTU unreservedly condemns corruption in the public sector, but it is just as bad when committed in the private sector, or in collusion between public and private entities. What makes it even worse in private companies is that is systemic, built into a capitalist system, which is based on exploitation, the theft of the wealth created by the workers, price-fixing and collusion to exclude competitors and swindle consumers, tax evasion and the illicit transfer of wealth out of the country.

It is however the ANC leaders who must take the main responsibility for not only failing to stop the looting of national resources but for the direct involvement of a large and growing number of their leaders. They can never justify it on the grounds that everybody in business is doing and it is our turn to jump on the gravy train.

The mistake they and the Guptas made was to commit their crimes in such a brazen fashion that it threatened the very fabric of society. They were not trying to ‘capture’ the state. It was captured decades ago by the colonial and apartheid capitalism class. The ANC leaders were enthusiastically using their positions in the captured state to join in the looting state to enrich themselves, their families and cronies.

As a result billions of rands which could have build schools, employed more doctors and nurses, created jobs and lifted people out of poverty was stolen, making an already deep economic crisis even worse.

Fortunately the Zondo Commission is beginning to lift the veil behind which the guilty men and women have been hiding. They must all be identified, obliged to appear before the inquiry and brought justice. Their looted wealth must be recovered and returned to the people of South Africa.