Dodgy Business

The Panama Papers and the South African connection

Khulubuse Zuma – Panama connection
Zuma neef.jpg

The revelations in the Panama Papers are echoing around the world, with some of those echoes coming from South Africa.

 The Panama Papers opened a can of worms with revelations that dwarf those of the US diplomatic cables released by WikiLeaks in 2010 and the secret intelligence documents given to journalists by Edward Snowden in 2013.

The anonymous source responsible for the biggest leak in history of confidential information, popularly known as the Panama Papers, released over 11 million documents involving the activities of more than 300 000 companies worldwide and spanning 40 years.

The information comes from the database of the world’s fourth biggest offshore law firm, Mossack Fonseca, based in Panama – and opened the door on the murky world of offshore tax havens, revealing how politicians, celebrities, sport stars, businessmen and organised crime benefit from a system designed to avoid accountability.

Credibility lost

Offering a glimpse on how politicians in particular hide their corruption and self-enrichment schemes, the Panama Papers will undoubtedly add momentum to the growing global disillusionment with politics and politicians in general.

Among the documents already dissected, about 140 political figures, including 12 current and former heads of state, have been identified for alleged gross misconduct. More names are expected to surface as teams of investigative journalists comb through the documents.

Among the countries with past or present political figures named are Iceland, Ukraine, Argentina, Pakistan, Saudi Arabia, China and Russia.

First victim

The revelations have already claimed their first victim. The Prime Minister of Iceland, Sigmundur Gunnlaugsson, resigned after one day of protests following the revelation that he had money stashed away offshore.

They also revealed alleged links to family members and friends of former and current authoritarian leaders: Syrian President Bashar al-Assad, Zimbabwean President Robert Mugabe, Pakistani Prime Minister Nawaz Sharif, former Libyan leader Moammar Gadhafi and ousted Egyptian president Hosni Mubarak.

South African connection

Unsurprisingly, considering all the disclosures of corrupt dealings and ‘state capture’ in South Africa, there is also a South African connection.

As Simon Allison wrote in Daily Maverick: “And in South Africa, it’s no surprise at all to see a Zuma in the mix – even if this time round it’s the President’s nephew Khulubuse Zuma taking centre stage.”

Documents show that Khulubuse was authorised to represent an offshore company that won a multibillion dollar mining deal in the Democratic Republic of Congo (DRC).

He is linked to Caprikat Limited, one of two companies that successfully scammed what could amount to a R100 billion oil fortune from the beleaguered people of the DRC.

The oil contract between Khulubuse Zuma and the DRC government was confirmed by Kabila’s “smash-and-grab” presidential decree in June 2010.

Kabila appropriated the oilfields from Irish oil giant Tullow Oil and allocated them to Khulubuse Zuma. It is estimated that the DRC lost U$10 billion (R103 billion) in revenue as a result.

The interesting aspect is that, coincidentally or not, the deal was awarded shortly after President Jacob Zuma visited the DRC in 2010.

It is alleged that in 2010 President Zuma played a crucial role in convincing Kabila to allocate two oilfields in the northeast of the country worth an estimated R100 billion to his nephew. Six months after the Zuma/Kabila summit, Khulubuse Zuma set up two companies in the British Virgin Islands.

Alex Hogg of BizNews wrote: “The Panama Papers investigation provides proof backing assertions that the Zuma family derived massive financial gain following an agreement to send a 400-strong SA Defence Force contingent (including Rooivalk helicopters) to the DRC. As a rather obvious quid pro quo, a DRC Presidential Decree gifted the Zumas with massive oil-bearing blocks of land – assets ‘reassigned’ from their legal owner, LSE-listed Tullow Oil plc.

“In scale and impact, the Zuma family’s DRC dealings make the Iceland PM’s crime almost petty. At least Mr Gunnlaugsson didn’t put countrymen’s lives at risk for his personal profit.

“The ANC is already struggling to defend its leader against more traditional political attacks. You have to wonder how it will spin the family’s sudden ownership of massive DRC oil blocks when its energised political opposition picks up these cudgels?”

The Panama Papers’ reference to Khulubuse Zuma’s DRC windfall also evokes other incidents which allegedly delivered benefits to the Zuma clan and associates. 

The Battle of Bangui

The Battle of Bangui in the Central Africa Republic in 2013 culminating in the death of thirteen SANDF troops was quite enlightening.

It revealed for the first time the extent of a rather secretive military presence in CAR with suggestions that the South African Government (SAG) deliberately tried to keep the public in the dark.

The SAG came under pressure to give reasons for the deployment of troops in CAR, especially when allegations surfaced that it was the result of a deal to provide security and protection for an unpopular head of state under siege. In return there apparently were promises of business opportunities to the SAG.

The scepticism gained momentum when it emerged that the South African military involvement occurred without broader approval, particularly that of the United Nations (UN) or the African Union (AU).

It was also reported that part of the standing orders to the troops in CAR was to provide protection to the business interests of South African companies with the “correct” political credentials.

Equatorial Guinea

Zwelinzima Vavi recently spoke out and expressed irritation about a four-day visit in 2008 to Equatorial Guinea. According to Vavi, then Cosatu general secretary, he and SACP leader Blade Nzimande were invited by President Zuma to accompany him to ostensibly discuss tripartite matters.

Vavi said nothing came of the discussions. Instead, according to Vavi, he got the impression that the president was more interested in discussing business opportunities with the president of Equatorial Guinea, his son Duduzane and a Gupta family representative.

With hindsight it could be argued that President Zuma had a good mentor in Theodor Obiang, a notoriously brutal dictator who used his country’s oil boom to enrich himself and his family.

With the call for President Zuma to vacate the presidency gathering momentum and with his closest associates, particularly the Guptas, under increasing pressure, the last thing the beneficiaries of the man from Nkandla would like to hear is more revelations similar to the one from faraway Panama.

by Garth Cilliers

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