Chief Justice Raymond Zondo has marked the trio of former Free State premier Ace Magashule, former MEC Mosebenzi Zwane and former head of the provincial agriculture department Peter Thabethe as possibly liable for the infamous Vrede Dairy Project and wants them charged for their roles in the failed enterprise.
In the latest report of the State Capture Commission of Inquiry released on Wednesday evening, Zondo found that the Free State provincial government unlawfully paid a Gupta family-linked company, Estina, over R280-million for a project that ironically sidelined small-scale black farmers – the intended beneficiaries of the project – and got nothing in return.
“The whole Vrede Dairy Project (debacle) happened because Mr Thabethe dismally failed to do his job and failed to protect the interests of the [department of agriculture and rural development] and to protect taxpayers’ money,” read part of the report.
Thabethe is already facing criminal charges – together with other people and companies – in connection with the failed dairy project but the matter has been provisionally removed from the court roll.
Zwane and Magashule have however not been charged in the matter.
“It also happened because Mr Mosebenzi Zwane as MEC was pursuing the agenda of the Guptas and did not do his job to perform oversight over Mr Thabethe,” added the report.
“It also happened because the premier of the province, Mr Ace Magashule, would have also been pursuing the agenda of the Guptas.”
The main idea behind the Vrede Dairy Project was to introduce black farmers in the Memel and Vrede areas to farming with dairy cows, process their milk and sell milk products on the provincial and national dairy products market.
The farmers were told about the project by Zwane.
However, the promises made to these community members were never realised.
At best, according to the report, a few members of the community were employed at the dairy project as manual workers.
None of the local black dairy farmers were invited to bring their milk for processing at the dairy farm.
The investigation found that the consultancy work on the dairy project appears to have been undertaken by companies from outside South Africa which had some association with the Gupta family enterprises.
It said Estina had R16 in its bank account before the Free State Department of Agriculture and Rural Development gave it a R30-million prepayment for the Vrede project in June 2012.
The prepayment was arranged by Zwane.
At the time, Estina had just one director, Kamal Vasram, a sales manager at the controversial Gupta family’s Sahara Computers.
“The company had no experience whatsoever in farming, never mind milk farming, or the crucial milk processing prior to its appointment. The core business of the company on the date of its appointment was still slated as ‘business consultant’,” said Zondo in the report.
Thabethe did not subject the project to competitive bidding and signed the contract with Estina without doing any due diligence, thereby violating the Public Finance Management Act.
“The Vrede Dairy Project failed in its first two years of operation . . . because of Mr Thabethe’s incompetence or because he was carrying out the agenda of the Guptas and cared less about the taxpayers’ money and the black farmers.
“Apart from anything else, Mr Thabethe must be held both criminally and civilly liable for his role in causing the department to lose so many millions of rands in taxpayers’ money,” Zondo suggested.
He said the Provincial Executive Council (EXCO) should have required Zwane and Thabethe to place before it full documentation which showed that all the legal and relevant prescripts had been complied with and that the implementation of the project and the appointment of Estina would be appropriate and reasonable.
Zondo dismissed the evidence of former treasury MEC Elzabe Rockman that a resolution of the executive council that the provincial agriculture department should implement the dairy project did not imply any breach of the law.
“This is so because the resolution said nothing about complying with the legal prescripts,” he said.
“But also, the EXCO should have preserved giving approval for implementation until satisfied themselves that implementation could still be lawful which they did not do.”
Zondo recommended that law enforcement agencies conduct further investigations to establish if Zwane and Magashule contravened any law in the roles they played in regard to the Vrede Dairy Project.
“The premier should have performed his oversight function over the MEC, Mr Zwane and the head of department Mr Thabethe, but failed dismally,” he said.
“It is necessary that there be consequences for people who fail to do their job . . . otherwise, this corruption and these acts of state capture are going to continue forever to the detriment of the country and all people.
“Neither the Provincial Legislature nor the ANC called the premier to account for the asbestos project and the R1-billion Housing Project debacle.
“Premiers must know they must supervise the MECs and their departments.”
Zondo also suggested that legal proceedings should be put in place in order to recover from Zwane and Magashule some of the monies lost by the provincial agriculture department in the Vrede Dairy Project as a result of their failure to perform their legal obligations.
He also wants members of the Gupta family and their associates involved in the dairy project to be criminally charged. – Staff Reporter