Chancellor House, the ANC’s investment company, earned R50m shortly before last year’s general election when it sold shares in a company which had obtained huge contracts from Eskom, which is controlled by the state, Netwerk24 reported on Sunday.
Chancellor House earned an additional R50m in dividends thanks to its connection with Hitachi Power Africa (HPA). In 2005 Chancellor House paid only R1.25m for its share in HPA.
In 2007 HPA obtained tenders to the value of R40bn to manufacture pressure boilers for Eskom’s Medupi and Kusile power stations. In 2008 the Public Protector found the awarding of the tenders by Eskom to HPA had created a conflict of interest, because Valli Moosa, Eskom’s chair at the time, was also a senior member of the ANC.
HPA maintained at the time it was not aware of Chancellor House’s links to the ruling party, but Netwerk24 learned Robin Duff, HPA’s financial chief at the time, did receive a warning about Chancellor House’s political ties before HPA appointed the company as its BEE partner.
Duff categorically denied this allegation last week.
HPA has also been criticised in the past because the pressure boilers it had manufactured for Medupi and Kusile are allegedly part of the cause of the large backlog at these new power stations.
Mathews Phosa, the ANC’s former treasury general, had already in 2010 said Chancellor House must sell its shares in HPA.
At the time Phosa said Chancellor House’s stake in large government tenders like that of Eskom creates the impression that the ANC “misuses tax payers to collect money”. For many years his view was ignored.
According to Netwer24’s sources the negotiations for last year’s transaction started in August 2013. HPA’s contracts for the pressure boilers were taken over by Mitsubishi Hitachi Power Systems Africa (MHPSA), a new company founded after the merger of Japanese manufacturing giants Mitsubishi and Hitachi.
MHPSA did not respond to Netwerk24’s questions about Chancellor House. Its spokesperson David Milner merely said the relationship between Hitachi Power Africa and Chancellor House had already been terminated when MHPSA was founded.
According to Gregory Solik of the pressure group My Vote Counts (MVC) SA needs legislation which prevents political parties from benefitting due to transactions with the State. In February MVC applied to the Constitutional Court in this regard.
Prof. Anthony Butler, author of Paying for Politics, says the ANC’s expenses for a national election could be as much as R500m.