Best of 2019: HSBC joins dots from Gupta-friendly public protector to Chinese rail company kickbacks

First published 31 July 2019

Public Protector Busisiwe Mkhwebane reckons she has been given a raw deal by journalists, who keep trying to link the head of the anti-corruption body to the Gupta family at the centre of the state capture scandal. However, it’s hard to imagine that Mkhwebane is an innocent who is doing her utmost to fight for truth and justice in South Africa. This is because she was appointed to this anti-corruption role when former president Jacob Zuma was still clinging to power and had surrounded himself with friends. In addition, Mkhwebane has concentrated on trying to pin dirt on anyone BUT Zuma and his friends while in office, even though there is a surfeit of evidence in the public domain of industrial-scale state capture and corruption. Global journalists have evidence that HSBC has joined the dots from Mkhwebane to the Gupta family. Unsurprisingly, Mkhwebane has “rejected with contempt” the details in the report. – Jackie Cameron

By Thulasizwe Sithole

Public Protector Busisiwe Mkhwebane, who heads the country’s top anti-corruption body, has been snitched on by global banking giant HSBC for having financial links to the infamous Gupta family, says the Organized Crime and Corruption Reporting Project (OCCRP), a global network of investigative journalists.

The OCCRP has banking records in its possession allegedly proving the links.

“The bank flagged a payment worth over US$5,000 into Mkhwebane’s account at First National Bank in South Africa in June 2014, during the height of the Gupta family’s influence over the Zuma government, the records show.

“The money was sent from an account at HSBC’s subsidiary in Hong Kong. First National Bank declined to comment citing client confidentiality,” says the consortium of journalists.

“The flag on Mkhwebane’s transaction was part of a highly restricted internal HSBC investigation that sought to identify a network of Gupta-linked accounts and companies around the world. The network’s key accounts and companies were located in Hong Kong, a tax haven that has been known for providing financial secrecy for foreign clients,” report Khadija Sharife and Mark Anderson.

Mkhwebane has had a little of her own medicine, now being compelled to defend herself against allegations that she received a suspicious Gupta linked $5000 payment via HSBC over 5years ago. Perhaps EFF should insist she suspend herself until this allegation has been investigated

— Joburg lawyer (@joburglawyer) July 30, 2019

There is no indication of wrongdoing by Mkhwebane, they emphasise.

“However, HSBC included the payment among thousands of flagged transactions involving dozens of offshore companies that laundered payments structured as kickbacks from a Chinese rail company in a deal that involved Gupta associates,” say the reporters.

In a statement to OCCRP, Mkhwebane’s spokesman Oupa Segwale said that the public protector has no links to the Guptas. (See her full statement, below.)

“She was not aware that she had been flagged by HSBC, the spokesman said, and no funds had been transferred in June 2014 to South Africa,” Segwale tells the OCCRP.

“HSBC’s reason for identifying Mkhwebane as part of this network isn’t known to OCCRP. The payment she received was made just one day before she left her position in China as a South African Embassy official. She then returned to the Department of Home Affairs in South Africa,” continue the investigative journalists.

The OCCRP recaps how it previously revealed that Chinese company, China South Rail, won a $1.5bn contract to sell locomotives to South Africa’s state-owned infrastructure company, Transnet. It paid a massive advisory fee to Salim Essa, a well-known business associate of the Gupta family.

“The deal was structured so that the payments were taken from Transnet and routed through Essa’s Hong Kong-based companies and accounts.”

Read also: Guptas milked Transnet billions, washed it through HSBC, other banks — report

HSBC’s internal auditing team, says OCCRP, identified $114.6m in transactions as originating from these payments, according to the documents obtained by OCCRP.

“Of that amount, $60m was paid to offshore companies. Other payments funded shopping sprees at Calvin Klein and Rolls Royce and meals at The Spice Merchant and Costa Coffee in the United Kingdom.”

When asked by OCCP why Mkhwebane was flagged as potentially being part of the Gupta network, HSBC spokesman Ankit Patel didn’t answer directly.

“We continue to investigate any potential links to the Guptas or Gupta-related companies,” Patel is reported as saying. “We will review any name that comes to our attention for potential involvement in financial crime and exit those relationships as appropriate.”

The OCCRP tells its global audience that last week, Corruption Watch South Africa, a civil society group, sent a letter to the country’s parliament asking for an investigation into Mkhwebane’s fitness to hold office. “Mkhwebane has much explaining to do,” said David Lewis, the organisation’s executive director. “[The alleged financial link to the Guptas] is further evidence of the public protector’s dishonesty and bias. This strengthens the demand for her impeachment.”

Mkhwebane’s office, points out the OCCRP, released a report this month accusing current President Cyril Ramaphosa, who succeeded Zuma and has backed the Commission on State Capture, of himself being involved in state capture by receiving what she described as “large sums of money” for the financing of his presidential campaign. “She had previously accused Ramaphosa of being biased against her.”

“Her report was released three days after Zuma began his long-awaited testimony before the commission in mid-July, an appearance that was cut short after he said he couldn’t recall answers to most of the questions posed. The former president also used the opportunity to accuse unnamed forces of plotting against him,” says the anti-corruption website.

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Public Protector rejects OCCRP report as malicious and defamatory

Public Protector Adv Busisiwe Mkhwebane rejects with contempt the claims contained in a report by donor-funded non-profit organisation, Organised Crime and Corruption Reporting Project (OCCRP), that she was “flagged’ by international banking institution, HSBC, as having financial inks to the Gupta family.

Adv. Mkhwebane would like to place on the record the fact that she heard for the first time from the OCCRP last Thursday that she had been “flagged”. HSBC has never brought this “flagging” to her attention and she has absolutely no links with the Guptas.

It is important to highlight that by the OCCRP’S own admission in their written request to the Public Protector for comment, “there is no indication that the source of the funds were from the Gupta network, simply that she was flagged as part of it by the bank.”

It is strange that, today, the organisation reports that she was “flagged” as having financial ties to the Guptas.

Adv. Mkhwebane said in a speech delivered at an event hosted by an organisation of Sheriffs in Mpumalanga last month that ever since she started investigating the conduct of certain powerful people, she has been the target of dirty tricks from some figures and their allies in civil society, political circles and in the media. This is yet another example of the onslaught.

In April information came to her attention that a certain politician was pushing for her arrest on the false claims that she was involved in the passing of her husband and money laundering.

This came in a form of an enquiry by a Sunday newspaper. It explained to the paper that Adv. Mkhwebane’s late husband had suffered from depression and took his own life and the involvement in money laundering was denied.

A source subsequently indicated to Adv. Mkhwebane that foreign expertise had been brought into the country to look into her bank accounts and the circumstances surrounding the passing of her husband.

In the same month, two publications were approached by an informer, who claimed that Adv. Mkhwebane had presented former North West Premier, Supra Mahumapelo, with a wrist watch. The publications demanded to know the make of the watch, the value and the reason for the “gift”. They said they were in possession of a copy of a gift register in which Mr. Mahumapelo declared the gift.

It was subsequently explained to them that the Public Protector presents all visiting dignitaries with Public Protector-branded promotional material, which includes stationery, caps, umbrellas and wall clocks, one of which is the watch that was referred to by the informer who sold the information to the publications in question as proof of impropriety on the part of Adv. Mkhwebane.

In June, another informer peddled a claim that Adv. Mkhwebane was seen at a flower shop said to be owned by the wife of former SARS Commissioner, Tom Moyane received a bouquet of flowers and held talks with Mr. Moyane.

Two publications enquired, demanding to know the value of the flowers, where the “gift” had been declared and whether the visit was appropriate given the Public Protector’s investigation of the “Rogue unit” matter. It was explained to them that the Public Protector did not know the flower shop in question, did not know Mr. Moyane’s wife, did not meet with Mr. Moyane and was certainly nowhere near the vicinity of the shop on the day in question.

In the same month, an online publication published a story that the Public Protector was sitting on an investigation in which former State Security Minister Bongani Bongo was implicated. The publication indicated that Democratic Alliance Chief Whip John Steenhuisen said he had lodged the complaint and was unhappy that the case had gone cold.

The inference was that Adv. Mkhwebane was protecting Mr. Bongo as they, according to the publication, enjoyed a close relationship.

It was explained twice to the publication that the Public Protector did not have such a complaint. It later turned out that Mr. Steenhuisen had in fact lodged the matter with a parliamentary committee and not the Public Protector. The publication refused to apologise.

This month, a picture of a politician who appeared to be in a meeting with an unidentified woman did the rounds on social media. Again, one publication, which was involved in the three cases above, approached the Public Protector with a request for comment.

The request was premised on the false conclusion that the person in the image concerned was indeed Adv. Mkhwebane. It was indicated to the publication that Adv. Mkhwebane has never in her life met the politician in the image. The politician himself identified the women in the picture on his Twitter page. However, the publication still went ahead and published the story.

Adv. Mkhwebane sees all of these events as part of an orchestrated campaign and concerted efforts in political circles, civil society and the media to discredit her merely because she has been able to muster enough courage to hold those seen as ‘untouchable’ to account. She will not be discouraged. Instead, these attacks give her strength to discharge her functions with renewed vigour, without fear, favour or prejudice.

Issued by the Office of the Public Protector, 30 July 2019