Week in review: McKinsey concedes, AG discovers more Covid-19 swindling, Gordhan vindicated, vaccine rolled out in UK

Use Spotify? Access BizNews podcasts here.

Use Apple Podcasts? Access BizNews podcasts here.

By Melani Nathan 

• At the Zondo Commission this week, McKinsey was presented with evidence that its consulting work alongside Regiments Capital was tainted by the corruption of State Capture at Transnet and SAA. Regiments Capital is a Gupta-linked firm. McKinsey has agreed to pay back R650m to Transnet and SAA. In 2017 McKinsey conceded that work done at the state owned power utility Eskom was also linked to state capture. It agreed to return R1bn in fees received from Eskom. At the time Global CEO Kevin Sneader denied that the same kind of activities were taking place at Transnet and SAA, where it was working with Regiments Capital. McKinsey maintains it was unaware that Regiments was paying part of its earnings on to the Guptas. Transnet has responded to McKinsey’s announcement, saying that McKinsey’s figure amounts to about half of what it is actually owed.
• The Auditor-General’s office published its second report on the government’s spending during the Covid-19 pandemic. Auditor General Tsakani Maluleke found “significant deficiencies in the procurement and contract management processes of the relief package government redirected in response to Covid-19”. At the request of President Ramaphosa, the Auditor-General’s office undertook an audit of government’s spending of a R500bn package made available to contain the spread of the virus and relieve social and economic distress. It was found that TERS relief payments were abused and were paid to people who were below the legal age of employment, deceased, receiving other benefits, or working in government.. More than 1,500 company directors who were awarded government tenders applied for and received social grants from Sassa. The audit also identified various instances of contracts being awarded to businesses that do not have a history of providing PPE – often working in a different industry or being formed just before a contract was awarded.
• A damning ruling by the Pretoria High Court has set aside Public Protector Busisiwe Mkhwebane’s report into the South African Revenue Service ‘rogue unit‘ established by Public Enterprises Minister Pravin Gordhan. The unit was investigating high level corruption including cigarette smuggling, accusations of bugging the offices of The National Prosecuting Authority and intercepting communication between politicians and people of interest. The Judges of the Pretoria High Court directed Mkhwebane’s report to the Legal Practitioner Council for further consideration. She had been found to be biased against Gordhan and wilfully ignored hard facts and evidence. While Mkhwebane faces an uncertain legal career as she is up for a motion to remove her from office in parliament, Gordhan has been vindicated.
• The UK has become the first Western country to roll out a Covid-19 vaccine to the general population. Those most vulnerable are prioritised – ‘those over 80 years old, nursing-home workers and other high-risk health-care workers. Those three groups make up an estimated 6m people in the UK. In South Africa, little progress has been made in getting the nation vaccinated against the virus. South Africa can expect the vaccine in mid-2021 and so far, government has only secured enough shots for 10% of the population.

This story on the McKinsey role in corruption that has damaged SA is also available, here on Spotify: