You are a valued supporter of OUTA’s work, and we thought you might like to read an extract from our book Permitted Plundering: How Parliament Failed South Africa (written by Ilse Salzwedel). State Capture unfolded in phases, and this preview reveals how the Free State was used as “testing ground” by the Guptas and their enabler, then Free State Premier Ace Magashule,  to test their plans to steal a country.    

The grooming years: The Guptas and the Free State

From the previous chapter it is clear to see that the Free State province played a pivotal role in the Guptas’ meticulously planned onslaught on South Africa. Oversight was nearly impossible, since Ace Magashule, their close ally, ruled the province with an iron fist.

The Free State was the proverbial kindergarten playground where the Gupta bullies first flexed their state capture muscles. When they succeeded, they set their sights on bigger fish: state-owned enterprises (SOEs) like Transnet, Eskom and Denel awaited.

One way to illustrate what exactly happened in the Free State is to look at the submission OUTA made to the Zondo Commission on the actions of Ace Magashule, premier of the Free State between 2009 and 2018.

At the time of writing, Magashule was still fighting his suspension from the ANC – he was elected the secretary general of the ruling party at the December 2017 elective conference – and had already made an appearance in court for his role in the asbestos tender scandal. Magashule and his 15 co-accused have been charged with fraud, corruption, theft and money laundering in connection with a R255-million contract for an audit of hazardous asbestos roofing on houses in the Free State.

In 2014, two companies were allegedly appointed as service providers to the Department of Human Settlements in the Free State.

In turn, these two companies are said to have subcontracted two other companies to do the audit work for R21 million, while the accused pocketed the balance of the money. The scale of corruption and overcharging is but one aspect of this scandal; the fact that no asbestos was removed as a result of the millions charged is perhaps the biggest shock of all.

Magashule’s dubious activities over many years have been the subject of several investigations, resulting in many articles and at least one book, Gangster State by Pieter-Louis Myburgh. OUTA investigated Magashule specifically with regard to his links with the Guptas. His name pops up regularly in the #GuptaLeaks, and his sons, Tshepiso “Gift” and Thato Mothwe Magashule, were also close to the Guptas.

Gift was employed as a consultant by the Gupta family from November 2010, and was later appointed by a Gupta company, earning R90,000 per month. Gift stayed in a house in Saxonwold owned by a Gupta company and had to be “forcefully removed” by business rescue practitioners when the company went into business rescue in 2019 (Mail & Guardian, 2019). He also went on a three-week holiday with the Guptas and Duduzane Zuma, Jacob Zuma’s son, to Dubai, New York, Venice and India in 2011, and in 2015 he and his brother were treated to an eight-day stay in the five-star Oberoi Hotel in Dubai.

In OUTA’s view, Ace Magashule’s involvement with the Guptas while premier of the Free State warranted a separate submission to the Zondo Commission. In its submission, OUTA pointed out that the official letterhead of the premier had been used for a number of suspicious letters written and dispatched under the premier’s signature (OUTA, 2018a). Between November 2012 and November 2014, several letters of invitation were sent to high-profile Indian politicians, inviting them to visit the Free State in an official capacity to explore bilateral trading opportunities. These invitations were in most cases shared with Sahara’s Ashu Chawla and Tony and Ajay Gupta. It is clear that the Gupta brothers were either informed of the invitations or else their approval was sought to send them out. What is less clear is whether strict protocol was followed in issuing the invitations or whether the premier’s office and letterhead were abused by the Guptas to create the impression that they were closely connected to highranking South African politicians.

The letters were all drafted by Ashok Narayan, a known Gupta ally involved in several Gupta-linked companies like Homix, Linkway Trading and Sahara Systems. The letters indicate that Narayan was appointed by Magashule as a member of his advisory council, paid for by South African taxpayers. He is also known to have been involved in the Vrede Dairy Farm or Estina project. If Narayan was indeed an adviser to the premier, it should be established when and by whom he was appointed, and whether the premier was aware of his close relationship with the Gupta family.

In the #GuptaLeaks, Tshepiso’s involvement with the Guptas can be traced back to at least 2011, when his name, as well as that of Duduzane Zuma, featured on a list of flight bookings requested by Chawla. The rest of the names on the list were those of Gupta family members. It appears that Tshepiso travelled either with the Guptas or courtesy of the Guptas on several occasions, locally as well as internationally. At least one email shows that he received money from them. The email, confirming an amount of R80,000 to Tshepiso, was sent from Tegeta’s Ankur Sharma to Ashu Chwala

* Have you bought your copy yet? Available countrywide at most Exclusive Book stores and other selected bookstores. Or order your copy from OUTA here