Part 1 of the Judicial Commission of Inquiry into State Capture Report has exposed how the Gupta-linked The New Age (TNA) made millions from state-owned enterprises (SOEs) through its business breakfasts.
Although TNA’s business breakfast scheme is not new, the report has provided details about the pressure put on SOEs to sponsor the breakfasts.
BusinessTech reported in February 2013 that state-owned companies had paid massive amounts in “sponsorship” for New Age business events between 2011 and 2012.
- Transnet paid R17.5 million for 18 business breakfasts.
- Eskom paid R7.2 million for 6 business breakfasts.
- Telkom paid R12 million for 12 business breakfasts.
These sponsorships were, however, only the tip of the iceberg. The TNA concluded many more deals than the ones listed above and benefitted in many other ways.
It was revealed that it cost the SABC R20 million to host The New Age business breakfasts.
State departments and ANC politicians also paid large amounts to the Gupta-linked media group to speak at the business briefings and to buy tickets to the events.
The Star reported that Gauteng Premier Nomvula Mokonyane‘s office paid close to R400,000 for 500 tickets for the event which hosted her.
Former communication minister Ayanda Dlodlo, in turn, revealed that her department had spent R1 million to host a TNA business briefing in 2016.
It was no secret that these breakfasts were a way for the Gupta family and TNA to benefit from state funds.
Despite numerous media reports about these breakfasts, nothing was done about it.
The only real resistance came from politicians like Helen Zille, who boycotted the events.
When Zille found out how the events were funded, she pulled out of the TNA business breakfast where she was set to speak.
“Now that it has come to light that the breakfasts are funded by public money, the DA cannot continue to participate,” she said.
“These breakfasts must be very profitable for the New Age, which is owned by the Gupta family, who are in turn vocal supporters and funders of the ANC and President Jacob Zuma.”
The State Capture Report and testimony at the commission revealed that pressure was put on state-owned companies to sponsor TNA business breakfasts.
In 2018, GCIS acting director Phumla Williams said procurement officials were bullied into funding TNA breakfast briefings which were hosted with the SABC.
The same happened at other SOEs, like Eskom and Transnet.
It was found that various Eskom contracts with TNA were irregular. These contracts included:
- Sponsoring 36 business breakfasts for R43.2million.
- Sponsoring six business breakfasts for R7.2 million.
- Sponsoring four business breakfasts for R4 million.
It was found that the Eskom board had no regard for its fiduciary duties and put the interests of the Guptas above those of Eskom and the people of South Africa.
Transnet, in turn, concluded five long term contracts and one ad hoc contract to the value of R123 million with TNA. These were:
- A sponsorship of 16 breakfasts at R16 million.
- A “partnership agreement” for 15 breakfasts at R15 million.
- An ad hoc “sponsorship agreement” for two breakfast briefings at R3 million.
- A “partnership agreement” for 20 sessions at R20 million.
- A 2015 “partnership agreement” for 20 sessions at R21.2 million.
- A 2016 “partnership agreement” for 20 sessions at R21.2 million.
It was found that Transnet’s spending on these contracts was irregular, fruitless and wasteful.
The commission said it was apparent that then Transnet CEO Brian Molefe and executive Mboniso Sigonyela were directly facilitating the use of public funds for TNA spending.
“They did not appear to put up any resistance and indeed appeared determined and anxious to ensure that these contracts were concluded — and on extremely disadvantageous terms for Transnet,” the report states.
Sigonyela also used threats and intimidation to ensure that his subordinates complied with instructions to advance the interests of TNA.