Johannesburg- The Judicial Commission of Inquiry into Allegations of State Capture, Corruption and Fraud in the Public Sector has found proceeds of corruption were diverted from state owned enterprises for the benefit of the ANC.
The commission, chaired by Acting Chief Justice Raymond Zondo, observed that governance in state owned enterprises had collapsed to the extent that procurement of goods and services is crippled by corruption.
Zondo today released the first part of his report to President Cyril Ramaphosa.
The report states that among the factors that have weakened SOEs includes the appointment of pliable officials to oversee the improper grant of tenders or contracts, the bullying or replacement of officials who objected to irregular practices “the diversion of money, being the proceeds of corruption, to the benefit of the ANC”.
The absence of proper monitoring, the absence of consequences, the readiness with which the implicated private sector entities initiated or participated in corrupt arrangements also beset SOEs.
The commission singled out some private firms it found had colluded with government officials in the award of corrupt deals. These included McKinsey and Company in its relationship with Transnet and Eskom; Trillian (a Gupta Family related entity) in its relationship with Transnet; Regiments (a Gupta Family related entity) in its relationship with Transnet; Bain in its relationship with SARS; China South Rail in its relationship with Transnet.
“The evidence received by the commission demonstrates that in many cases and in fundamental respects, the boards of the SOE’s have shirked their responsibilities, or worse, used their powers to corrupt the SOEs which they have been appointed to protect. This collective misconduct was often evidenced by the abuse of centralized procurement processes so that the approval authority for high value tenders became concentrated in the hands of a small group of top executives and Board members,” the report states.
“The patterns of abuse which appear in every stage of the procurement cycle evidence multiple areas of near collapse in the procurement system. Those patterns, by themselves, do not tell the whole story by any means. What has happened in the governance of state owned enterprises needs to be detailed separately in order to understand to what extent the procurement system has been rendered unfit for purpose,” the report adds
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Also read: Thuli Madonsela on State Capture Inquiry
Ramaphosa receives part one of the State Capture report
Look: Public reacts to handover of Zondo report
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