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tv   South Africa Corruption Inc.  Al Jazeera  March 29, 2018 1:32am-2:01am +03

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it's taken power seven years ago came a chinese president xi jinping during the secret visit to beijing officials had remained tightlipped over who was making an official trip after a motorcade was filmed driving through the capital chinese state media reporting the talks were a success with him saying he is open to giving up his nuclear weapons well south korea's ministry of unification says z. and kim's meeting as a set the right tone for the upcoming talks between pyongyang seoul and washington i think improvement in the north korea china relationship ahead of the into korean summit and u.s. north korea so much will we hope full in solving the problem in the korean peninsula such as denuclearization and establishment of peace poles have now closed in egypt's presidential election ending three days of voting with no real challenger president that the fact that sisi is said to win a landslide victory however low voter turnout has been
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a problem despite the best efforts of authorities funerals are being held for some of the victims who died in a shopping center fire in the say varian city of kemet over on sunday flags have been flying at half mast across the country on a day of national mourning to remember the sixty four victims. a french police officer killed in last week's supermarket sieges being post humorously awarded the legion of honor that's the country's highest accolade lieutenant colonel i know both tom was hailed as a hero after trading places with a female hostage that said people in power next us you to one of us president donald trump has said he will slap new charis on imports of steel and alimony and for a five gene will mean fossett data tax cuts have times faster than fourteen we bring you the stories that are shaping the economic world we live in counting the cost at this time on al-jazeera.
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last month south african president jacob zuma was closed from office after a decade of political corruption allegations his former associates the billionaire gupta brother who's a fugitive from justice i mean claims that they looted state assets there were those are up to scrutiny we've been to examine the role played by international companies in the scandal so toxic it will haunt south africa for years to come.
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in two thousand and nine jacob zuma came to power having sold himself to south africa as the people's president he promised to grow the economy fight poverty and create millions of jobs. nine years later and it hasn't ended well last month zuma amidst growing corruption allegations step down assad africa's president is forced out by his own governing african national congress the liberation party voted for to party it and one of them. to the decision to resign as president of the power within the bank. his links to an influential billionaire business family the captors were revealed last year in a mess of paradise paper style data leak the cooked leaks appear to reveal how these three brothers a.j. are told and rich of friends with former president jacob zuma and in business with
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one of his sons set up a vast network of patronage offering monetary rewards in return for political loyalty to zuma. so hard trenched is corruption in south africa we are someone who know a businessman who pays bribes to put in government tenders he spoke to us on condition we hid his identity there's an expectation that they need to get something. for them. or just think it's a stomach that bribe is then transferred to an intermediary then the intermediary company either transfers it to another company and bronzes of the corrupt or it's funds for the offshore trust. is not in the fort or. in some parts of the country corruption is so imbedded it's not become a deadly business. to tell for example zoomers home province. they've been over two hundred politically motivated killings in the last four years. because he caused
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a former politician left the party last year in protest to corruption within its ranks she's been targeted ever since i was receiving death threats on a daily basis and my children were also being way to receiving death threats as well for killing she says i'm a need you to turf wars between corrupt local and see politicians. last year a video of two heavily armed and see body guards was shared widely on social media . you often hear. more on the. longer. she knows these men while they work for a former colleague those i his body cuts that. is they end to you know if people can do it video like that it's
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coast to tell you what kind of people are you dealing with this is about the politics of patronage or link to ten dollars it's all linked to who is controlling what state the resources the zuma years presented opportunities to prisoners to make lots of money fast. some of those opportunities seem to have been irresistible even to multinational companies who should have known better to date the scandalous implicated law firms software companies banks management consultants major accountancy practices and public relations companies more disturbing still the spotlight has fallen on older service firms who statutory role is to keep their clients honest by maintaining independent oversight of their businesses much of the attention is full and on. one of the so-called big four international ordered firms it was the cop does postal and business water for sixteen years now it's employed
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in several scandals regarding its work in south africa. the first is over reports are produced for the south african revenue service jani the head of sars as it's known unleashed this bombshell report publicly in august twenty fifteen it contained he claimed damning evidence that an elite crime fighting unit within sars was operating unlawfully for almost eight months prior to the us a national newspaper the sunday times had been running almost weekly about a rogue unit operating from within the service. the detail hundred fifty seven page report took thirty people a year to produce at a cost of twenty three million rand. it appeared to validate the drug unit stories and implicated senior officials in unlawful activities such as spying on the
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national prosecuting authority and misleading the public protector and state security agency about its existence. one of those at the center of the allegations was your luxemburg he took over the units in two thousand and eight it was set up in two thousand and seven to tackle organized crime syndicates spoke exclusively to people in power the last time i counted i think it was something like eighty two. allegations of some kind of offense ranging from breaking into president's private residence and planting listening devices. down to murdering people everything else in between it's extremely a million eighty two you have to read it yourself in the newspaper on the front page being associated with findings attributed to a reputed bull company or what i thought to be attributable company like a p m g. who basically make me out to have been
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a criminal report also implicated in finance minister pravin dan who'd previously headed sars saying he ought to have known of the existence of the unit this was later used as one of president zuma motivations for firing gaudin as finance minister in march twenty seventh team. of about nine months of harassment from questions from the special police unit called. the threat of prosecutions and charges being none of which of course materialized merely angered the business community and the public more generally angered them it did in a series of public protests south africans rallied behind. the problem is that. their report couldn't be relied upon. following revelations in
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the gupta leaks of africa's involvement with gupta linked businesses. international investigated in september twenty seventh it withdrew the conclusions of its own report. also took the extraordinary step of replacing its south african c.e.o. and his senior management team they've also paid back the twenty three million rand they charge sars for the report despite these measures many questions remain unanswered for example which if any of the specific allegations contained in the report were actually true we requested an interview with k.p. m g but they declined in a written response they restated that the report's conclusions recommendations and legal opinions should no longer be relied upon. but the damage the reporters caused will be felt for years to come says one of south africa's leading economists iraj on the narrow revenue collection impact this year sources reported
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a shortfall of about fifty billion rent you have central government now short of revenues that means borrowing more debt means running into international credit worthiness problems or if you like being downgraded we asked to interview mr murray jani to discuss these allegations but sars didn't respond since twenty fourteen under his leadership fifty five senior staff and five hundred others have quit. great friendships were broken people got divorced children were affected as a result that's. also the independence of the investigation is being called into question over a fundamental issue nobody who is implicated. named in those aboard as being inverted commas guilty of one do not have a was ever to put their point of view at first from. the k p m g investigation
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i envisaged a process whereby k p m g the lawyers and myself sat down in a room behind closed doors for once being honest and open and frank going through the report line by line but declined to sit down with him and then in september twenty fifteen a draft of the report was leaked to the media received a text message from a journalist from the sunday times please can i comment how do you comment on the report picture unseen k p m g should've immediately acted on that leak. they should have realized that they were something sinister really mr minor was put in place as the head of stars to. do so if you start a cleanup process which would take up the excellent scene that we had put in place so he began to for example at tac
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a particular unit that was tracking illicit financial flows because they had already compiled the file. they had on prisons and his family and a whole lot of other politically connected. and fake businesses and when i looked i mean i was shocked. as far as i'm concerned it's pure hoax because it contains absolute material mistake once even contains as far as i'm concerned fraudulent. the report from luxemburg says contains scant evidence but implied that he was complicit in serious wrongdoing. believes field sunday times articles alleging was involved in many misdeeds including spying on the president running a brothel and unlawfully operating a secret five hundred million rand fund the sunday times was later retracted
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stories about a rogue unit which the press ombudsman labelled as inaccurate misleading and unfair it also apologized to go don from luxembourg and former deputy sas commissioner ivan pele after the leak from luxembourg tried again to get k b m g to refute his counter evidence in order to restore his reputation at that point they suddenly said to me that contracted with the rooney service not with me in a written response as to why to fuse to hear the testimony of those implicated k p m g said no comment and the impact of k.p. and his role in the revenue service is a massive one hour on for school sovereignty in other words bertie to the end of one finances largely on the basis of taxes collected within south africa has been seriously undermined. yet another extraordinary twist to the saga as this film was
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being prepared for broadcast from luxembourg pele and another former sas official was summoned to appear in court on the ninth of april twenty eighth. facing corruption and other charges brought by the hawks investigative unit bizarrely these charges are based on the contents of the now discredited k p m g a report or three strenuously deny the allegations and of our south africa's national prosecuting authority to withdraw the charges. another k p m g scandal involved south africa's most notorious waiting in twenty two teams the group to stage four days of popular nuptials for the nice at sun city a well known casino resort attendees included bollywood stars cabinet ministers and captains of industry also invited with the group to support it says k p m g afterwards k p n g's then chief executive told cook thanking him for the event of
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the millennium. the company has since acknowledged it was a mistake to have attended but that might not have been a pony mistake. as a consortium of local investigative journalists discovered the tab for the events of the millennium which cost thirty million rand was actually picked up by south african taxpayers. the scope to link dairy farm allegedly stole hundreds of millions of rand of government money which was supposed to be used to empower one hundred poor black farmers increasingly the. extraction needed advice as to how to a structure different operations for example they still close on two hundred fifty million. daily projects so two million of it had to go to dubai and back here to pay for. the farms auditor's but they did order the books of link way
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the company which laundered the wedding money back into south africa this was billed as a business expense by avoiding the stolen money from being taxed at bt in question sar k p m g the cook to supporters could have missed us to advise them how to do it in south africa how to do it in dubai so they use their international network international advisory services. to help them set it up in full compliance with. a junior order to flag the link way payments saying these costs are most probably not in the production of the company's income despite the signed off on link waste financials. who then ordered the older says that question is deeply concerning to u.k. politician peter hain as they have been criminal prosecutions for money laundering and financial institutions and very few other enablers. companies a former anti
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apartheid activist he's presently campaigning for u.k. authorities to act against companies who he says. we're complicit in south african corruption there's been a regulatory fines but it is not clear that these are enough to deter banks and other financial players from making their anti money laundering compliance regimes a tick box rather than a meaningful one but it's not just officers who've been caught up in south africa's cup the scandals another murky episode involves u.s. based management consultancy mckinsey and work it did for eskom south africa state turned electricity provider. in january twenty sixth eskom signed a lucrative consultancy agreement with mckinsey to help increase revenue and streamline operations a key condition of the deal was that the kinsey would partner with a local black owned company controversially a plan to partner with trillian
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a firm which it later turned out was linked to the politically well connected to brothers. six months later after questions were raised about trillions roll in the deal and the amounts because he was paid. cancelled the project in that short time . and one point six billion rand between them corruption watch south africa is now approached us authorities to investigate mckinsey to n.g.o.s as that the us based consultancy used trillian and its cooked to connections to secure the lucrative contract in return for a massive kickbacks trillion of five hundred eighty million rand it needed mckinsey to be colluding with him as calm would not have been willing to enter into a contract and many of the senior executives advised against it but then the political connections trillion of course kicked in and that's how the contract was
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the kinsey strongly refutes the sec use ations requested an interview with the firm to clarify matters but it declined. in statements a told us that never had a formal partnership with trillion and it's denied serving to link companies or making payments to secure contracts. but bianca goodson trillions former c.e.o. questions mckinsey's version of events the first meeting ahead mckinsey particularly on the generation team again a gram of what they propose the delivery team should look like the generation team was tasked with boosting the efficiency of several eskom power stations according to her behaved as though it didn't want. to do any meaningful work and there were no training people question that and i was like ok trillions representation and they were actually taken aback that you won't be doing anything. that how mckinsey and trillian were conducting the deal she resigned after just three months later
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she turned whistleblower and gave evidence about the affair to a parliamentary inquiry investigating corruption. to be pushing to get more staff on to the generation team. by the time that truly hit thirty people on the generational extreme the generation were supposed to produce in ran over three years for just one power station. for three people working can you imagine what the margins of. salary is for people. she says trojans relationship with eskom was so strong that she was able to pin a draft letter to mckinsey on the instruction of a senior is com executive. the supplier development partner is trillian. able to work explicitly clive had told me their relationship to. him. and this is why some women also take charge of
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even if they can't even being to difficult they could leaving the campaign because the relationships exist or of us clive and celine were her bosses and salema saleman whose ties to the captors are so well known he's often referred to as the fourth cop the brother. the kinsey say the trillion concealed it's kept a connection by not revealing that celine was its majority shareholder when it found out it terminated its relationship with trillian that was in march twenty sixth dean but says goodson mckinsey's and systems that it didn't know who it was dealing with is highly implausible. had been interacting with mckinsey five because sega a partner at the firm he was a tommy seemingly ignored me and. led to slim and it's amazing what attention i would get after that because after slim would intervene in suddenly making to feel like ok banker we've heard you sorry we didn't get to the most
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interesting two weeks ago. now we hear you say god's relationship with dates back to at least twenty fourteen emails uncovered by local journalists in the gupta leaks show the two correspondent about work at another state company and in a private presentation to eskom a full two months before mckinsey pulled the plug on trillion it's a direct a flag reputational risk through association with partner. at first glance because he's offering to tantalizing it would save the utility tens of billions of rand and would be on a no feel at risk basis instead of put her in a percentage of any savings that created for. it was to net mckinsey a billion rand in just six months but when sent daniels is comes head of legal began reviewing the contract she discovered concerning details clinton was
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extremely in weighted in mckinsey's favor you know so all the risk was actually with esko other scum executives had their doubts as to why the huge public utility needed mckinsey's advice at all at certain executive committee meetings the other colleagues were really convinced that mckinsey did head in the venue because it was standard operational work that they were doing. in parliament mckinsey stood by its billion rand feat david fein a senior partner based in london flew to south africa to give evidence to the corruption inquiry and i'm comfortable with the size of the fee that eskom could have actually absorbed this much change but i have got comfort from my colleagues at least what they've shown me and has been independently audited and that was of value but the all of a wyman report commissioned by eskom found that the contracts unusual fees structure resulted in a charging more than double market rates and mckinsey itself and its internal
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presentation to flag exorbitant fees being leaked to media as another risk had the contract not been cancelled prematurely. could have netted almost ten billion rand equivalent to more than eight hundred million dollars for four years work. zendaya mules discovered other irregularities the contract itself didn't appear to be valid it didn't identify trillions mckinsey's local partner and no treasury proof all that being sought to mckinsey and said they relied upon eskom to seek the nice story exemptions from the treasury but you don't do things that way you don't said by the way did you speak to your friend at the treasury and is it all cool daniels issued letters of demand to mckinsey and trillian to repay the money forty eight hours later she was suspended that's when the threat started the threats. of it
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increased the security is home. sure that firmly save in november last year she also testified at the parliamentary inquiry there is only one way to describe this to the people of south africa. this was a pleasant thieved ending his testimony at the same inquiry david fine apologized for mistakes mckinsey had made he also reiterated that despite the firms feel justified it would pay it back please accept that we will pay the money back to south africa we did not want any tainted money that often might now be moot in january south africa's national prosecuting authority froze one point six billion rand of mckinsey in truly an assett it labeled the deal paid leave corrupt. so with the summa gupta era now over and the new president at south africa's helm can corruption in the country and the control put on thinks it can be eighteen is going
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to be about that defying all of that and much more and demonstrating that south africa is still mandela said africa but the broad paying businessmen we interviewed isn't so sure the president may impact high level corruption the bigger transactions the big good deals but when it comes to the the medium sized news this want to do that it's not that it's going to change last week because this film was being completed sauced chief tom ione was suspended on the orders of south africa's new president several run a poser meanwhile clive angel bianca goodson's former colleague tonight being involved in any of the consultancy work which was done as part of the eskom mckinsey deal.
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a story of blackmail. this parasite. and. deal has killed i have strangled. the story of carnage a lot and the fear is real. passion. and it's very similar just. i am doing this on the benefit of saddam people. so bad they see the importance of. witness documentaries that open your eyes. at this time on al-jazeera.


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