Gupta-linked companies that were used for kickbacks for state tenders donated R10 million to the ANC shortly before the 2014 elections, News24 reported.
What makes this report noteworthy to the IT community is that a large portion of the kickbacks paid to these companies came from Neotel, now known as Liquid Telecom SA.
The company which donated the money to the ANC, Ballatore Brands, received money from the Gupta-linked letterbox company Homix.
In 2015, it was reported that Neotel paid R75 million in “commissions” to Homix to clinch deals worth more than R2 billion from Transnet.
After the reports emerged, Neotel’s board commissioned a law firm to conduct its own investigations into the matter and placed CEO Sunil Joshi and CFO Steven Whiley on special leave.
Neotel’s board later reported the payments it made to Homix to the police as possible bribery.
Joshi and Whiley resigned from Neotel six months after they were placed on special leave to “pursue their own interests”.
The Neotel board said at the time that it had found nothing that implicated Joshi or Whiley personally in any bribery or corruption activities.
Homix and Neotel
According to an investigation by AmaBhungane, two suspicious payments to Homix were flagged by Neotel’s auditor Deloitte – R34.5 million in April 2014 and R41 million in February 2015.
During an investigation into these payments, the former MD of the Guptas’ Sahara Systems, Ashok Narayan presented himself as the Homix CEO.
He tried to convince investigators that Homix had provided an actual service by helping Neotel negotiate with Transnet.
Deloitte auditor Chetan Chhagan Vaghela told the Zondo Commission that Neotel management also tried to put Homix forward as a company which provided services to them.
Joshi and Whiley said they decided to engage with Homix as an agent to help them overcome an impasse with the potential deal with Transnet.
Homix was known to Neotel because they previously had brought a Cisco deal to the company.
According to Vaghela, Joshi said Homix wanted 10% of the deal with Transnet as commission. Neotel could not afford the 10% and they negotiated it down to 2%.
He said Deloitte became highly sceptical about the Homix transactions and the validity of the transactions. They needed more evidence that the payments were above board.
Neotel provided them with invoices and a contract, but there was a problem – the contract was dated February 2015, whereas the alleged service was rendered in December 2014.
An investigation revealed that there was no clear evidence that Homix performed work to Neotel to justify the payments, which is why Neotel reported the payments to the police as possible bribes.
Money paid to the ANC
According to News24, Ballatore Brands paid R10 million to the ANC – shortly before “millions in government tender funds starting flowing through it”.
The South African Reserve Bank’s (SARB’s) Shiwa Elijah Mazibuko said Ballatore Brands did not seem to have any discernible business activity.
Despite this, the company received millions in payments, some of which came from Homix after the Neotel payments.
Mazibuko said two irregular payments amounting to R76 million from Neotel to Homix were related to a deal worth R2 billion between Neotel and Transnet.
He added that one of the payments – R34.5 million which paid to Homix by Neotel in April 2014 – was transferred to Ballatore Brands.
“The bank account statement of Homix reflect regular large transfers to the accounts of two local entities, Ballatore Brands and Bapu Trading,” he said.
He added that the bulk of the funds received by Homix originated from SOEs or people who were providing services to the SOEs.
Ian Sinton, former general counsel at Standard Bank of South Africa, provided evidence about Neotel’s payments in a statement to the Zondo Commission.
The statement below provides an overview of the payments by Neotel to Homix in 2014 and 2015.
Liquid Telecom responds
Liquid Telecom SA told MyBroadband that Tata Communications Limited, the former majority shareholders and manager of Neotel, launched an investigation into the matter.
“Tata appointed a South African law firm to conduct an independent investigation and an international law firm to assist in its review and deliberations on the Homix matter,” Liquid Telecom SA said.
Liquid Telecom SA would, however, not comment on the outcome on this investigation and whether Neotel paid kickbacks for the Transnet deals.
Instead, it said “the incident in question happened before Liquid Telecom acquired Neotel in 2017, and therefore we are unable to comment further”.