Some of our country’s sleaziest politicians are getting their comeuppance, as commissions of inquiry into state capture reveal all their dirty little secrets.

Here’s hoping our tax money will go somewhere other than the rental on some idiot’s new Mercedes sometime soon.

Also in the firing line are some of the big dogs of SA business, proving that the swamp runs deep in capitalist societies.

Business Day has the scoop on the top five worst cases of businesses captured by greed – some of whom are linked to state capture.

Coming in at number five, we have…drum roll, please…

5. Bain and Co

Bain and Co were called in to help SARS restructure when it fell under the leadership of Tom Moyane. In a commission of inquiry into SARS, chaired by the honourable judge Robert Nugent, it was revealed that Bain and Co’s restructuring had not only damaged the tax agency’s capacity to work, but also contributed to a decline of R50 billion in revenue.

Let that number sink in.

Three reliable sources — who spoke to Business Day on condition of anonymity — said [Vittorio Massone, managing partner of Bain & Co] visited Zuma at his private residence in Nkandla late in 2013 and again early in 2014.

It emerged at the commission on Friday during testimony by Solly Tshitangano, a procurement official at the Treasury, that the process to appoint Bain to restructure the Sars operating model was “irregular”, littered with “red flags”. It raised suspicions that the decision on which consultancy would win the tender was predetermined.

Massone testified at the commission on Friday that he had met with Moyane to talk about Sars a year before he was appointed commissioner of the tax agency.

4. McKinsey

Aaaaaand the Guptas are involved in this one, so buckle up.

McKinsey was paid R1 billion for only six months work on an invalid contract that allowed the Gupta-linked firm Trillion to make off with another R600 million.

McKinsey owned up, paid back the money, and tried to set things right with a grovelling apology for participating in state capture via Trillion.

Now it turns out they were way more involved than they originally admitted to.

A draft report for the Treasury by Fundudzi Forensic Services suggests Anoj Singh, former CFO at Transnet and Eskom, received travel benefits from McKinsey before the firm was awarded lucrative consulting deals at both entities. This from the FM story:

The draft Treasury report points out that McKinsey was subsequently awarded five contracts worth a total of R1bn at Transnet over two years, before being awarded the Eskom contract with Trillian. The investigators conclude that between 2005 and 2017 Transnet paid R3.1bn to McKinsey and its partners, Regiments and Trillian.

3. KPMG

Audit firm KPMG has been in the thick of the state capture scandal since the ‘Gupta emails’ were released last year.

Among the allegations is that KPMG partner Jacques Wessels passed off wedding costs as business expenses, dodging R2m in taxes.

Wessels has admitted to negligence before an inquiry into the matter, but denies deliberate wrongdoing.

The Gupta company Linkway was allegedly used to channel R30m of taxpayers’ money to fund the infamous 2013 Sun City Gupta wedding.

Because nothing says romance like dodgy money linked to state capture, amirite?

2. Corrupt executives and directors at VBS Mutual Bank

The Reserve Bank has estimated that roughly 75% of VBS Mutual Bank’s assets were probably stolen by its directors and executives.

VBS entered the limelight when it gave former criminal in chief, Zuma, a loan of R7,8 million after he was ordered to pay back the money for his Nkandla estate.

Municipalities broke the rules and invested with VBS, possibly after political pressure was applied, and are estimated to have lost R1.6bn they deposited.

Curator Anoosh Rooplal is attempting to recover more than R1.5bn from the bank’s largest shareholder, Vele Investments, as well as from the bank’s executives and directors, was done to prevent further “dissipation of assets”.

Bank governor Lesetja Kganyago says no regulation could have prevented the ‘travesty, when those responsible for the bank are the ones perpetrating the crime’

And finally, taking the top spot:

1.Steinhoff

Author James-Brent Styan predicted this one. 

Steinhoff crashed after overstating their income and asset value. Auditors who took a fine-tooth comb to the Steinhoff books confirmed:

…”a pattern of transactions undertaken over a number of years, across a variety of asset classes that led to the material overstatement of income and asset values of the group”.

According to Rob Rose, writing in the Financial Mail, “Initially, in December, Steinhoff said the size of the ‘hole’ in its accounts was about €6bn. But insiders close to the forensic investigators who’re picking through the mess tell the Financial Mail that they have since discovered numerous other frauds. The upshot: the ‘hole’ is now likely to be billions deeper than that initial €6bn.”

Heather Sonn, who was appointed chair of the company after the crisis hit, said that she believed that there was deliberate and purposeful deceit where some people, in collusion with others, went “to great lengths to misrepresent the financial statements”.

As it stands, that is South Africa’s new big five.

When the revolution comes, they’ll be first against the wall.

[source:businessday]