How the Guptas used a newspaper to capture the state

The now defunct The New Age newspaper was a conduit of state capture for the Gupta family, the Zondo Commission has found.

In its report handed to President Cyril Ramaphosa by acting chief justice and state capture inquiry chairperson Raymond Zondo on Tuesday, the inquiry found the Gupta family used its newspaper to channel millions from state coffers in the form of unwarranted advertisements and sponsorships.

According to the report, the Guptas used their proximity to former President Jacob Zuma, to get state entities such as the Government Communication and Information System (GCIS), Transnet, Eskom and SAA to spend millions of rand on advertising in the newspaper.

The millions were also spent on sponsorships and partnerships with the newspaper and its controversial TNA Business Breakfasts.

Between 2012 and 2017 Transnet spent R122m on TNA Business Breakfasts while GCIS spent R33.9m and Eskom spent at least R1m per event for at least 46 breakfasts.

“The TNA investigation conducted by the commission has shown contracts concluded between TNA and Transnet, Eskom and SAA were not only irregular but wasteful, too,” the report reads.

The inquiry has recommended that the National Prosecuting Authority look into the possible prosecution of several officials, including Brian Molefe and Mboniso Sigonyela.

The commission found that under the stewardship of Mzwanele Manyi, the GCIS became an enabler of state capture.

Manyi was brought in as director-general (DG) and CEO of the GCIS in 2011 to facilitate the diversion of public funds to the newly established Gupta-owned newspaper, the commission has found.

It found Manyi was brought into the GCIS after its former DG Themba Maseko refused to bow to pressure from the Gupta family to divert its entire R600m advertising budget to their newspaper.

Under Manyi, a significant portion of the advertising budget was diverted to the Gupta-owned newspaper despite it not having a clear readership. This was done at the expense of taxpayers and to the benefit of the Guptas.

The report lays bare how the Gupta family, with the assistance of Zuma, captured critical state-owned entities.

“TNA serves as an example of the way in which state capture took hold in SA. It shows the extent of the Guptas’ influence in the public sector as well as the Guptas’ strategy to replace officials who were not compliant with their looting scheme,” the report reads.

The removal of Maseko from the GCIS became one of the first acts “of state capture by the Guptas”, the commission found.

“The influence they exerted over former president Zuma was considerable. They managed to ensure that a well-performing and principled public servant was removed at lightning speed when he refused to accede to their demands to divert millions of rand of public money to enrich their media business.

“Former president Zuma replaced Mr Maseko with a facilitator, in the form of Mr Mzwanele Manyi. During Mr Manyi’s term as DG of GCIS, millions of rand were spent on TNA in circumstances where there was no credible readership information nor certified circulation figures for the newspaper. It is inconceivable this would have been allowed to occur if Mr Maseko had remained at the helm of the GCIS.”

The removal of Maseko from the GCIS came at a great cost to the country, the commission found, and had he not been removed the government entity could have resisted the capture.

Under Manyi’s first year at the helm of GCIS, it spent R6.3m on advertising in The New Age.

In his second year, the spending increased to R8.2m. After his departure in August 2012,  GCIS spending on TNA continued and amounted to R9.5m in the 2013/14 financial year and R9.9m in the 2014/15 financial year.

The commission found that had Zuma not removed Maseko, “it is unthinkable he would have approved the payment of millions of rand of public money on a media business with no verified readership and no credible circulation figures simply because a family with close ties to the then president demanded he do so”.

Though Zuma denied being the genesis of Maseko’s removal, the commission was scathing in its finding, saying evidence provided suggests the former statesman “could do terrible things to give effect to the wishes of the Guptas”.

Zuma had suggested that the late minister in the presidency Collins Chabane had initiated the removal of Maseko, but the commission found “there is also no doubt that in giving this instruction, [former] president Zuma was giving effect to the wishes of the Guptas or was complying with their request or instruction to him to remove Mr Maseko because he had refused to co-operate with them as [former] president Zuma had an interest in the success of the media business of the Guptas”.

Zuma’s version, which sought to blame the late Chabane, was dishonest and a fabrication to avoid accountability, the commission said.

“Mr Zuma falsely implicated minister Chabane because he knew minister Chabane has passed on and will not be there to refute his evidence. Mr Maseko said he and minister Chabane had never had any issues. Another witness also testified that Mr Maseko and minister Chabane had a good relationship.

“The finding that [former] president Zuma gave minister Chabane an instruction to fire Mr Maseko or move him out of the GCIS is of great significance in understanding Mr Zuma’s role in state capture and advancing the interests of the Guptas and his family at the expense of the interests of the people of SA. It shows how far he was prepared to go to advance the agenda of the Guptas,” the report reads.

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