Public protector recommends judicial inquiry into state capture allegations
November 4, 2016, 10:19 am

Will the ANC pressure Zuma to step down as some quarters say this needs to happen after the Public Protector’s report? [Xinhua]

The report into “State Capture”(when private interests covertly influence the government’s decision-making apparatus) by the former Public Protector, Thuli Madonsela, was released just before 5pm on November 2.

It was prompted by allegations made by three complainants (a Catholic Priest, Father S. Mayebe on behalf of the Dominican Order, Mr. Mmusi Maimane, the leader of the Democratic Alliance and Leader of the Opposition in Parliament, and an unnamed member of the public) that the Gupta family had been guilty of improper and unethical conduct relating to the appointments of cabinet ministers, directors and award of state contracts and other benefits to the Gupta linked companies.

The report does not provide proof of criminal wrongdoing by President Jacob Zuma, but it does provide enough evidence such as cellphone movements, banking transactions and flight details to suggest Atul, Ajay and Rajesh Gupta were involved in the award of large coal mining contracts by Eskom, the state-owned electricity utility.

Zuma had initially tried to get a court order to block publication of the report but withdrew this bid on Wednesday.

A statement from the Presidency on Wednesday said: “The Presidency said the Constitution provides that everyone has the right to administrative action that is lawful, reasonable and procedurally fair.”

But it added that “The President will give consideration to the contents of the report in order to ascertain whether it should be a subject of a court challenge.”

On Friday, Eskom said it may consider a court challenge against Madonsela’s report.

Professor Raymond Parsons, of the North West University’s School of Business and Governance, told The BRICS Post that the potential economic impact of the previous Public Protector’s report on state capture released yesterday, especially if taken together with other recent developments such as the Medium Term Budget Policy Statement, could be positive at a time when South Africa badly needs it.

“Effective institutions which are seen to be working are good for public and business confidence. It reinforces the impression of ‘institutional resilience’ in South Africa and an upholding of the rule of law which provide a framework for a better sense of direction about the road ahead,” he said.

He pointed to the strengthening of the rand on the news of the report.

Furthermore, the release of the report might be an additional factor encouraging the credit rating agencies to give South Africa the benefit of the doubt and more time to “get its house in order”.

There are some who believe that the report came at just the right time to pressure Zuma’s ruling Africa National Congress (ANC) to consider that it cannot afford to have him as a sitting president in the runup to their elective congress in December 2017.

This may well be why so many senior ANC leaders are now starting to call for Zuma’s resignation,” Gibbons said.

Gibbons says the report shows why the South African government has remained steadfast in its commitment to ‘dirty’ electricity produced by coal-fired power stations, and why Eskom is refusing to proceed with the next stage of the Independent Power Producer agreements.

“Coal owners like the Guptas simply cannot afford renewables like solar and wind to devalue their investments. On its present course, Eskom is also responsible for the proposed nuclear build programme. The potential for even more looting of the nation’s resources is truly appalling,” he added.

Eskom’s Group Chief Executive (GCE) is due to present Eskom’s interim results later on Thursday and he will be facing media scrutiny into his relationship with the Guptas.

The state capture report noted that between August 2, 2015 and March 22, 2016, Eskom GCE Molefe called Ajay Gupta a total of 44 times and Ajay Gupta called Molefe a total of 14 times.

Meanwhile, University of the Witwatersrand Economics Professor Jannie Rossouw told The BRICS Post that the publication of the Public Protector’s report is good news, given the earlier attempts aimed at delaying publication.

“The important next step is the inquiry recommended in the report. All eyes will be on the Chief Justice, who must select a judge to lead the investigation. Completion of the investigation envisaged by the Public Protector within 180 days will be a major challenge,” Rossouw.

He added that a more fundamental issue in her opinion is that Zuma is not fit to hold office. It will be interesting to see how he responds to the report.

“In the final analysis the events give South Africans good reason to celebrate and to be proud citizens of our country. We still have good and impressive people in leadership roles the country that will do the right things, and there are still strong institutions that uphold the Constitution,” Rossouw said.

“In a sense this gives us hope: there is life after Zuma.”

Helmo Preuss in Pretoria, South Africa for The BRICS Post