By Michael Appel
Former Free State Agriculture MEC Mosebenzi Zwane was granted bail of R10, 000 in the Bloemfontein Magistrate’s Court on Wednesday.
Zwane is facing a raft of charges including fraud, theft, money laundering and corruption in relation to his role in the Gupta-linked Estina dairy project. He was joined in the dock by former Sahara Computers employee Ugeshni Govender, and Ronica Ragavan, the former director of Islandsite Investments.
In 2013, the Estina dairy project was sold to the Phumelela local municipality and about 100 intended beneficiaries, as a “mega public and private partnership business concept” that would see over half a billion rand pumped into the venture, with R228m meant to come from Estina as the implementing agent itself, and the rest from the government. It’s important to note there was never any feasibility study done on the project, no business plan, no environmental impact assessment, no water rights, no competitive tender process followed, and the venture was not budgeted for.
When a feasibility study was eventually done, Gupta acolyte Iqbal Sharma – through his company Nulane Investments – was paid R25m to do it. Sharma subcontracted to Deloitte for R1.5m and redirected the rest of the money to a host of Gupta-linked companies including Islandsite Investments. It’s in connection with this case of fraud and money laundering that Atul and Rajesh Gupta were arrested in Dubai.
Many years and hundreds of millions of rands later, we now know that the entire dairy project was a carefully orchestrated façade to enrich the Gupta family and their associates. The National Prosecuting Authority (NPA) called it a project aimed at giving “a veil of legitimacy” in order to defraud and steal from the state.
Zwane, however, has always maintained it was an empowerment project. On 3 July 2017, Zwane told eNCA: “We came up with the project to empower black people in the Free State. If you look at the shareholding of that Vrede Dairy, it is 100% black owned.”
The intended beneficiaries, however, never benefited a cent, nor did they become shareholders. The R280m paid in eight tranches to Estina between July 2012 and May 2016, flowed out of Estina’s bank pretty quickly, much of it being laundered overseas.
The State Capture Inquiry report found the scam empowered only his friends the Guptas. Of course there was something in it for Zwane. As quid pro quo he got a fully-funded trip to India – meant as a training excursion for the intended beneficiaries – but Zwane, instead, bizarrely took the Umsingizane choir with him and not any farmers.
Testimony by one of the intended beneficiaries at the inquiry – Ephraim Dhlamini – told of Zwane’s short-lived trip to the subcontinent as the delegation reportedly got “running tummies” from the spicy food and returned home with haste.
Another perk for Zwane is he would later be parachuted from obscurity into the prominent position of Mineral Resources Minister. It was in this capacity that he would travel to Switzerland to assist the Guptas in securing Optimum Coal Mine from Glencore.
The Commission recommended Zwane and former Free State Premier Ace Magashule be investigated by law enforcement to ascertain criminality on their part, and also to consider instituting legal proceedings to recover the R280m directly from the pair.
Magashule is currently the suspended secretary general of the ANC. He was forced to step aside from that position because he’s facing corruption charges in relation to another multi-million rand tender scandal in his home province – known as the asbestos audit heist.
“The Premier should have performed his oversight function over the MEC, Mr Zwane, and the HOD [Peter Thabethe] but failed dismally […] Mr Ace Magashule also failed dismally to supervise his MECs and now we see the same failure in respect of the Vrede Dairy Project. It is necessary that there be consequences for people who fail to do their job.
“Otherwise, this corruption and these acts of state capture are going to continue forever to the detriment of the country and all people,” said Chief Justice Raymond Zondo.
The commission made the finding that both Zwane and Magashule – despite being public office-bearers – were doing nothing but “pursuing the agenda of the Guptas”.
Adv Andrea Johnson, head of the Investigating Directorate says: “The enrolment of this case demonstrates the commitment of the Investigating Directorate to deal with perpetrators of state capture. This case should serve to remind the people of the Free State that this matter was not forgotten. It does however take long to investigate and put together appropriate charges for prosecuting such complex cases.
“The Vrede Dairy Project destroyed the lives of the people and communities it was supposed to empower and uplift. The enrolment of the matter is a step closer to delivering justice to the people who were alleged to have been prejudiced by the criminal conduct of the accused.”
It’s unclear whether Zwane, who is the chairperson of parliament’s transport portfolio committee, can continue in this role now that he’s a criminally charged individual.
Zwane and his co-accused are due back in court on 2 November 2022.
For an in-depth understanding of what transpired in the Estina dairy project click here.
Read also:
- How a Gupta company with R16 in its bank account scored R280m
- Appel and Erin on Estina Laundromat: Complicity of banks
- Maimane: Estina exposes very real, very human face of Zupta corruption
- New mining minister Zwane a shock to ANC insiders, but not Gupta watchers
