CAPE TOWN - Home Affairs Minister Malusi Gigaba came before the Public Enterprises committee on state capture on Tuesday.
Gigaba started his testimony saying he would try to be as honest as possible to account for his time as the Public Enterprises minister between 2010 and 2014.
"I take the allegations into state capture seriously," said Gigaba as he began his written testimony.
The minister said that "it has been disheartening and shocking to note that some of the appointments that were made during his tenure and that were hailed at the time, have now become the subject of state capture allegations".
In terms of board appointments at State-Owned Enterprises (SOEs), Gigaba said that " the department will recommend candidates to fill these positions". It should note that names are sourced widely and eventually cabinet approves all board appointments.
It, therefore, should be said that the minister of public enterprises doesn't have a role in procurement, according to Gigaba. The minister essentially is kept at arm's length throughout the process.
Home Affairs Minister, Malusi Gigaba at the #EskomInquiry. File Image: IOL
Brian Dames
Gigaba said that former Eskom CEO, Brian Dames's resignation was a loss to the company and in fact Gigaba tried to asked him to stay on when he wanted to leave.
"Eskom couldn't lose Mr Dames at that time as it was a critical time for the company and he was needed to maintain stability to Eskom."
"I thought it was important for him to stay. I recall having told them that Eskom could not afford to lose Brian at that time because of the massive build programs that Eskom was involved in, and because they needed to raise capital in respect of those build projects."
“It was a critical time for Eskom and Brian was necessary to maintain company stability during that period,” Gigaba explained.
“I speak sincerely when I say that I endeavored to the best of my ability to ensure Brian remained as Eskom, and it was unfortunate to have lost his services.”
According to the Home Affairs minister, the board accepted Dames's second resignation in 2013, but Gigaba tried to keep him at Eskom. "It was unfortunate to see him go."
The main reason for Dames departure was the tensions between him and former chair of Eskom, Zola Tsotsi.
"The Eskom board needed to appoint a new CEO following Dames' resignation. when I left DPE, a new CEO had not been appointed."
In terms of Dames’ testimony and specifically a meeting arranged by Gigaba's adviser Siyabonga Mahlangu with the Gupta brothers, the minister said that he honestly knew nothing about the alleged meeting.
“I can also tell you that Brian did not call me about this meeting either before it happened or afterwards. The first time I heard of this meeting was following Mr. Dames’ testimony to this inquiry", Gigaba said.
“If anything about the meeting made Mr. Dames uncomfortable, I’d go as far as to say that he should have called me about this. We had a good working relationship, and we communicated often."
Tsholofelo Molefe
In terms of the appointment of Tsholofelo Molefe as finance director, Gigaba said that he thought she was more that qualified to hold that position.
Transnet
In terms of Transnet, Gigaba said that the Transnet board had the same problem as the Eskom board. He tried to appoint board members that were strong and competent. "If people we appointed went on to do wrong things later, we cannot be held accountable, unless there are facts that we may have overlooked," Gigaba said.
Gigaba then talked about the appointment of Brian Molefe as CEO at Transnet. Gigaba said that Molefe was a "stellar candidate" and in fact the markets responded really well to his appointment.
Gupta Tenders
Gigaba then testified on the Gupta-related tenders. The minister said that this is a challenging issue as the Gupta links are only coming to surface now.
The minister said that he was asked to inform the committee of any Gupta-related contracts that were concluded during his tenure at the Department of Public Enterprises.
What was clear was that it was becoming increasingly apparent that even tenders that appeared lawful may have been tainted, Gigaba said. The Home Affairs Minster said that the controversial Trillian contract with Eskom in fact took place outside his tenure as Public Enterprises Minister.
"I therefore cannot comment on them. The only interaction I had in relation to Tegeta is when I ordered a forensic investigation in 2017 as the Minister of Finance."
Gigaba said that it was only at Denel that there was a Gupta-related contract that he was aware of. This contract was the proposed VR Laser Asia partnership, which happened after his tenure as Minister of Public Enterprises.
Gigaba then said that as Minister of Finance, he did not give concurrence to the VR Laser proposal. In terms of Transnet contracts, Gigaba spoke on the procurement of 1064 locomotives.
The contract that was given to the minister for approval at the time (May 2013) would cost R38.6bn. This would be over a seven-year period. In June 2013 Gigaba said that he received a decision memorandum. In this memo, the business case for the tender was given.
“In summary, the new locomotive purchase was going to create value for Transnet,” Gigaba said. Essentially the tender would lead to benefits for the economy. According to the testimony this would include the R68 billion in localisation, also the development of manufacturing skills for people and the much needed creation of jobs.
“I was satisfied with the business case, and I approved the memorandum on 3 August 2013,” he said. Gigaba said he was not involved in the procurement of locomotives and was involved in granting authorisation under the PFMA.
Gigaba said that in terms of the New Age Sponsored Breakfasts, the minister said way back in 2011 he became aware of this issue and was upset about these sponsorships because it was a large sum of money, even though it was below the materiality threshold and was strictly within the operational purview of the board.
“I felt it was inappropriate that such large sums of money were being spent on breakfast sponsorships, especially in the midst of such large-scale build projects that were being undertaken.”
Gigaba said that he then issued a directive that all sponsorship requests be routed through the department.
In 2013, the Public Protector created an investigation mandate into looking into the sponsorships.
“I was informed that the Public Protector’s main focus was an investigation into fruitless and wasteful expenditure at Eskom, Transnet, SABC and Telkom, and the allegation that the Department exercised undue influence on those companies in deciding to sponsor the TNA breakfasts," Gigaba said.
“It is apparent from what I have just stated, and from the written instructions that I sent to the chairs of the SOC’s (state-owned companies) that I was doing the opposite of militating in favour of the TNA sponsorships,” the minister said.
Anoj Singh
Gigaba said on the appointment of Mr Anoj Singh to the position of CFO position at Transnet that "I was advised by the Department that Mr. Singh had been at Transnet since 2003 and had institutional memory, that the position of CFO had been vacant since 2009 and Mr. Singh had been acting in that position since that date."
"Mr. Singh's profile clearly set out his career progression at Transnet was highly commendable and there were no complaints about either him or his personal and business associations," Gigaba said.
Home Affairs Minister, Malusi Gigaba at the #EskomInquiry. File Image: IOL
QUESTIONS BY COMMITTEE
Advocate Ntuthuzelo Vanara was one of the first to question Minister Gigaba.
Vanara asked the minister what needs to be done to improve the system in terms of board appointments?
Gigaba stated that the department needed to find an alignment, so candidates are well vetted.
The minister said that there are loopholes in the system that can undermine the process.
Vanara asked Gigaba "What was the relationship between you and Mr. Siyabonga Mahlangu?
The minister said that Mahlangu was one of his legal advisers.
Gigaba said that he thinks the boards of SOE'S companies should stop getting involved in operational matters and focus more on pushing a strategic policy agenda to bring about transformation.
Vanara said that he shares the ministers' sentiments on that issue.
Vanara then asked "When did this culture of board members involving themselves in procurement issues at SOE'S start?
Gigaba said, "I don't know, when I got to the department of public enterprises, I found the board procurement sub-committee there, at Transnet."
Vanara then said "The reemployment of Mr Molefe and the R30m that he was paid by Eskom. What message do you think it sends to people of this country?
Gigaba said that he thinks in all sincerity that government should have been decisive and the penalty should have been more serve on the board, for undermining government.
Gigaba said that the decision to give Molefe a R30 million pension payout undermined government and its integrity. He said that government should have responded in a more decisive way at the time.
ANC MP Rembuluwani Tseli then asked Gigaba at the time, did you think Anoj Singh was the best person for his position?
Gigaba said at the time, Mr Singh was the best candidate.
Tseli then asked "in light of what has happened, do you think Mr Singh was a good appointment?
Gigaba then responded and said that is a difficult question, Gigaba said that he did not have powers to read the future. But in hindsight, it was not.
Tseli also asked Minister Gigaba why he did not appointment Ms. Molefe instead of Seholee.
Gigaba states that the department was looking at transformation.
The minister then went on to say that none of the qualifications of Tsholofelo Molefe disqualified her for the position, but in fact, she had been working with Eskom for a number of years.
DA member Natasha Mazzone then questioned Gigaba. One of the first questions related to the controversial Gupta wedding.
"I'd like to ask about your relationship with the Gupta family. We know you've attended the wedding they had at Sun City. When and why were you introduced to them", she asked.
Gigaba stated that there was never a formal introduction. He goes onto say that a number of other ministers were invited and attended the function.
Mazzone then asked, "Why do you think you were invited in the first place?"
Gigaba then said that he did not know why the Guptas had invited him.
Minister Gigaba said that he also never found it peculiar being invited to the Gupta wedding in Sun City.
Specifically, he said that while he still lived in Durban, he attended a number of religious and cultural events. He would get invited to graduation ceremonies of people he had never met before.
Mazzone then asked if Gigaba was aware that Zola Tsotsi was summoned to Jacob Zuma's homestead. Tsotsi reported to Gigaba at the time.
Gigaba said that it was never reported to him.
Mazzone also asked about Salim Essa. She questions his links to a number of SEOs.
"He has been linked to so many areas of our SOEs, that he's almost directly involved. Who introduced you to Salim Essa?"
Gigaba noted that when he was appointed as minister of Public Enterprises, Essa brought about a number of necessary skills to Broadband Infraco.
Mazzone does note that it appears that certain people were appointed in office and they were not the best person for the job.
She adds, that certain things started to collapse around them. She acknowledged that perhaps these people misunderstood their roles.
Mazzone also asked Gigaba about the New Age Sponsored Breakfasts and the millions used to sponsor them.
"You knew the Gupta family was being linked to dodgy dealings. When did you take action and what explanation did you receive?"
Gigaba said that when he became aware of the breakfast issue, he wrote to all the boards of all SOEs within his purview.
Mazzone said that Gigaba never raised a red flag against the Gupta family. She would like to know his reasoning behind this.
Gigaba said that as Minister he does not get involved in who gets tender contracts.
Mazzone then said that she finds that statement as "passing the buck". She believes that the buck stops with the minister.
"You aren't the kind of minister of who stays out of such issues."
She said that she expected the minister to take ownership of the department. Mazzone stated that Gigaba was derelict in his duties.
Gigaba then stated that he did not pass the buck. He noted quite emotionally that ministers don't involve themselves in tender contracts.
EFF member Marshall Dlamini then asked whether Gigaba should be held accountable for people who he appointed that eventually turned out to be responsible for bringing down the SOE.
Gigaba then said that "You must deal with the person who did something wrong not the person who appointed the wrongdoer."
Moreover, Gigaba said that one must prove that the minister in question knew there was trouble and did nothing about it.
Dlamini asked if a minister, who oversees a department that has essentially collapsed, should still be a minister of another ministry?
Gigaba replied that was not what he was saying.
Dlamini argued that Gigaba is essentially stating that a minister should not be held accountable.
EFF MP Floyd Shivambu then asked Gigaba if he has or has had a bank account in Dubai.
Gigaba then said that this question is part of the attempted political vilification by the EFF and others on his character.
The minister said that he does not have, nor has he ever had an account in Dubai.
The only account Gigaba has is his FNB bank account.
WATCH THE TESTIMONY LIVE BELOW:
GUPTAS
Yesterday it was reported that he Gupta brothers would not testify at the Eskom Inquiry, as they are not in the country.
Lawyers representing the Guptas told the chairperson of The Public Enterprises Committee Zukiswa Rantho that the brothers will not appear at the Eskom Inquiry as they are currently not in the country.
The committee had summoned the family to Parliament to answer questions on allegations that they used their political connections to former president Jacob Zuma to benefit from business dealings at Eskom.
Duduzane Zuma was also summoned, it's unclear whether he will appear before the committee.
The Gupta brothers' whereabouts are unknown, as they are also being sought by the Hawks for charges related to the Estina Dairy Farm project.
Former SAA chairperson Dudu Myeni will also not appear before the committee. This is the third time that the Myeni has failed to appear before the committee.
Last week, she told MPs that she was booked off sick by her doctor and would not be able to appear.
She made the same excuse this time around, saying she was still booked off sick.
The City Press newspaper reported on Sunday that Myeni was seen last Tuesday, the day she was meant to appear in Parliament, having drinks at a lavish hotel in Pretoria.