Power, Authority and Audacity: Power, Authority and Audacity: How the Shadow State Was Built How the Shadow State Was Built

Betrayal of the promise: How the nation has been stolen In less than a decade, the Zuma and Gupta families have managed to position themselves as a tight partnership that coordinates a power elite to manage the rent seeking that binds the constitutional and shadow states.

How the Gupta’s have How the Gupta’s tried to How the Gupta’s How the Gupta’s have captured the SOE’s established themselves in SA capture nuclear have captured cabinet

1993 members arrive 1993

2001 Gupta’s meet Zuma at a Sahara 2001 function Context: Between 2012 and 2019 Gupta-owned Tegeta Exploration Transnet would spend R300bn improving and Resources is registered. 2007 Polokwane: Zuma is elected 2007 its ageing rail network. ANC president

2009 July: Zuma family get jobs in c. November: Gupta’s register 2009 October: replaces 2009 Oakbay companies Oakbay Resources and Energy Barbara Hogan as Public Enterprises Minister. 2010 December: The New Age publishes its fi rst edition 2010 May: Oakbay and Duduzane Zuma’s company, Mabengela, buy Context: : Just prior to this, Vytjie Mentor 2010 2010 2010 Uranium One’s Dominion Mine – later named Shiva Uranium for is allegedly offered the Public Enterprises December: Gigaba moves Mid-level DTI offi cial Iqbal Sharma Gigaba makes wholesale changes to the Eskom board USD37-million through an Industrial Development Corporation loan. portfolio by the Gupta’s at their Saxonwold to Transnet Board. with many incoming board members linked to the Gupta’s. residence on condition that she drops SAA’s The New Age reports that Brian Molefe will be appointed Context: Observers were surprised by how much the Gupta’s 2011 Mumbai fl ight route in favour of one of their 2011 2011 paid for what was described in the media as “one of the most Transnet CEO companies. notorious dogs in the entire South African mining sector.” Little March: Three months later this happens in what appears to be did the nation know that Zuma and his benefactors seem to have have been a pre-determined decision Late 2012: Gupta’s reportedly attempt to 2012 already set their sights on a large-scale nuclear programme. 2012 Gigaba tries to make Sharma chairman of Board but infl uence PRASA train deal (R51bn) via June: Cabinet refuses based on his proximity to the Gupta’s. Gigaba South China Rail, which they represented. creates a Special Board Tender committee to circumvent Cabinet 2013 Waterkloof landing for wedding 2013 Intergrated Resource Plan 2010-2030 published which stated 2013 Context: They fail but probably because 2013 concern and appoints Sharma chair (this oversees tenders of July: Glencore, which that nuclear should be delayed until 2035 and not promulgated at of the refusal of then CEO Montana to R2.5bn and above) owns Optimum Coal Holdings, writes to all if costs run over $6500/KW. Current estimates put nuclear at relent to them. He wrote a letter to then Eskom invoking the “hardship clause” in their October: Transnet announces R50-bn loco tender. $8000//KW Prasa chair Sifi so Buthelezi describing the coal-supply agreement because the fi xed price brazen inteference of the Gupta’s in the Appoints McKinsey to advise on deal structure and funding. of R150 per tonne of coal, negotiated in 1993, course of the negotiations.. means they are losing nearly R1bn p/a. Parties Gupta’s list Oakbay, but at a listing price by more than McKinsey agrees to subcontract part of the work to Regiments 2014 2014 2014 enter into negotiations. double its valuation (through getting a business associate after which the original fi xed contract for R35m balloons to nearly in Singapore who bought pre-listed shares well above R100m (signed off internally by Brian Molefe and CFO Anoj Singh). valuation). This provided them with the cash to pay off an IDC February 2015: One month before the tender announcement, loan but ultimately devalued IDC’s equity in Oakbay by more Iqbal Sharma (who oversaw the tender adjudication) together with than half (ultimately a loss of about R120-million) to the state Rajesh Gupta and Duduzane Zuma acquire a stake in VR Laser owned entity. Services, an engineering fi rm that will benefi t from the Transnet loco tender, (which stipulates that 60% of component parts must be locally supplied). March: Transnet awards R50bn loco tender to four train builders:, including China South Rail and China North Rail Early 2015: The Gupta’s buy into another fi rm Trillian and manage to have lucrative Regiments work redirected to them, with the 2015 2015 July: Former Finance Minister Nhlanhla Nene and Tina 2015 September: Unknown backbencher 2015 2015 July: Public Enterprises help of their friend Eric Wood, a Regiments director, who moved to 2015 Joemat-Pettersson former Energy Minister, accompany Mosebenzi Zwane appointed as Mines Minister Lynne Brown Trillian shortly thereafter. April: Molefe appointed acting CEO Zuma to the Brics Summit in Russia where Nene is Minister overhauls Denel Board and December: Eric Wood was caught up in advising Des Van May: Molefe meets with Glencore and refuses to presented with a letter, in his name, from the Russians to installs alleged Gupta loyalists October: Former Deputy Finance Minister Rooyen and privy to highly confi dential treasury information. offer increased price – enforces 1993 contract. sign his support for nuclear. He refuses. Mcebisi Jonas offered Finance Ministry Dan Mantsha as chair. Mantsha Ultimately, Transnet pays Trillian R170-million for July: Anoj Singh appointed CFO. by the Guptas in return for a R600m then appoints ally Zwelakhe December: unexplained consulting work. December: Cabinet approves R1-trillion nuclear deal, bribe. He refuses. August: Glencore is forced to place Optimum into Evidence emerges of how proceeds of these contracts spirited out business rescue. having never received a business case. Nene is fi red hours December: Former Finance Minister Nhlanhla of the country through various Gupta-linked shell companies. after making a presentation to the same cabinet meeting Nene fi red and replaced by backbencher Des September: Zwane travels to Switzerland and meets on costing unfeasibility of nuclear. Van Rooyen. with Glencore, with the Guptas present . replaces Van Rooyen after Upon his return Glencore agrees to sell the mine to three days . Tegeta for R2,1bn. The Public Protector’s report says: “the only party 2016 Banks close Gupta accounts Zwane prematurely announces 2016 Gordhan is targeted by law enforcement 2016 2016 Janaury: Ntshepe announces the who probably stood to benefi t from [Optimum] being apparently based on fi nancial IMC, which he chairs, to throughout his time in the treasury. formation of Denel Asia, jointly owned fi nancially distressed...would be a prospective suitor. regulation concerns. investigate bank cloures. DoE transfers procurement to Eskom attempt to charge him, linked to SARS by Denel and VR Laser Asia owned by In this case, the prospective suitor was Tegeta.” allegations. These are dropped. the Gupta’s and Duduzane Zuma (and Having refused to assist Glencore by raising the Eskom releases RFI registered in Hong Kong). value of their supply contract, Eskom awards Tegeta Context: The Gupta’s were close to Regiment’s director Eric Pravin Gordhan calls out the formation of a R700m contract to supply Arnot power station. Gupta’s want Gordhan to intervene on their behalf with Wood and it seems they were using him as a conduit to try and Denel Asia as illegal in terms of the PFMA At R470 p/t, this is one of Eskom’s most expensive the Banks. Gordhan refuses and applies to the courts for a gain entry into the lucrative Regiments-Transnet work. When as neither he nor Brown had given the contracts. declaratory order in this regard they failed to buy Regiments, they bought Trillian, using their necessary authority. middle man Salim Essa, and then used this company, together April: Eskom special board tender committee led by The purpose of the Denel deal seems with Eric Wood, to triangulate the Regiments work into Trillian. Molefe gives Tegeta a R586m pre-payment, allegedly Gupta’s attempt to buy Habib International Court ruling declares the nuclear procurement plan invalid March: Zuma removes Gordhan and Jonas 2017 2017 2017 2017 to have been to give the Gupta/ Zuma for the Arnot coal contract, which actually turns Bank, which Gordhan does not sign because government did not follow due process. and replaces them with Gigaba and Sifi so This required the help of insiders in Transnet and evidence duo access to Denel’s highly confi dential out to be a loan to fi nalise payment for Optimum. approval for prompting the Gupta’s to Buthelezi. has emerged of how Transnet paid both Regiments and Trillian intellectual property to develop and sell This amounts to potential fraud under the PFMA. apply for an urgent but ultimately failed, hundreds of millions for the same pieces of consulting work. military products to the Asian market. According to the public protector: “It appears that the The Regiments-Trillian-Transnet triangulation is now the interdict to try and force him. conduct of the Eskom Board was solely to the benefi t May: Finance Minister Malusi Gogaba subject of an ongoing court dispute, including fraud allegations of Tegeta in awarding contracts to them and in orders the dissolution of VR Laser Asia. against Wood and Trillian. doing so funded the purchase of Optimum, in severe violation of the PFMA”

38 Betrayal of the Promise: How the Nation is Being Stolen Betrayal of the Promise: How the Nation is Being Stolen 39