Africa's Public Procurement & Entrepreneurship Research Initiative – APPERI


Thabo Mbeki

S.Africa’s MTN slides on Iran corruption lawsuit


The MTN Logo
The MTN Logo (Photo credit: Wikipedia)

By David Dolan

JOHANNESBURG | Fri Mar 30, 2012 9:00am EDT

(Reuters) – Shares in MTN Group (MTNJ.J) slid on Friday after rival Turkcell (TCELL.IS) filed a $4.2 billion suit against the South African mobile operator, alleging it bribed officials and lobbied support for Tehran‘s nuclear program to win an Iranian license.

Turkcell, which lost the 2004 bid for the Iranian license to MTN, filed the suit in a U.S. federal court in Washington, accusing the Johannesburg-based firm of using its influence with Pretoria to arrange support for Iran’s military.

The Turkcell case threatens to tarnish the reputation of both MTN – a black-run company widely seen as a post-apartheid success story – and the South African government, including former President Thabo Mbeki.

It comes at a time when countries around the world, including South Africa, are under strong Western pressure to halt oil imports from Iran and cut other trade.

MTN, Africa’s top mobile operator, has said the claim is without legal merit and has accused Turkcell of attempting to extort money from it – an allegation the Turkish company rejects.

Turkcell’s suit, backed by a collection of alleged MTN internal documents including emails, invoices, memos and presentations, accuses the South African firm of a “staggeringly brazen orchestra of corruption”.

Turkey’s largest mobile operator alleges that under a strategic plan code-named “Project Snooker”, MTN used corrupt practices to win the license which had initially been awarded to Turkcell…Read more.

(Additional reporting by Jon Herskovitz and Pascal Fletcher; Editing by David Holmes)

Dogged arms deal critics up the ante

IOL News

January 2012

By Ivor Powell and Marianne Merten

While President Jacob Zuma’s Commission of Inquiry into the arms deal gears up for business, two key critics of the weapons procurement scandal are busy upping the ante.

The Sunday Tribune has learned that the DA’s David Maynier intends to call on Zuma to extend the already wide-ranging terms of reference to include a focus on alleged attempts by government officials to stymie past investigations.

And civil society crusader Terry Crawford-Browne moved in the new year to secure expert advice on the legality and constitutionality of the government’s justification of the weapons procurement programme of the late 1990s on the basis of presumed economic benefits via arms deal offsets.

Crawford-Browne this week told the Tribune that if the legal experts found that the government’s justification of the deal on the basis of offsets was flawed from the beginning, he would move to have the entire arms deal repudiated and declared “unfixable”.

“At issue then for the Commission’s consideration,” Crawford-Browne argued, “will be a public and tangible apology to the people of South Africa by way of cancelling the contracts, returning the warships and warplanes, and repudiating the foreign loan agreements – signed by (then Finance Minister Trevor) Manuel – as fraudulent.

“The financial consequences will then fall to the British and German taxpayers who have guaranteed these loans, which South Africa has not yet repaid and which run until 2019.”

The basis of Crawford-Browne’s intervention lies in Section 217 (1) of South Africa’s constitution. The subsection requires that all government procurements are conducted “in accordance with a system which is fair, equitable, transparent, competitive and cost-effective”.

It was also on this basis that Crawford-Browne, in 2010, approached the Constitutional Court to rule on the basic legality of the arms deal.

This was after Crawford-Browne was told by then President Kgalema Motlanthe in December 2008 that there was no need for any inquiry.

It was in the fallout from Crawford-Browne’s Concourt action, as the court deadline loomed for Zuma to defend the procurement programme, that in September 2011 he shifted the goalposts to announce that he was instituting a commission of inquiry into the scandal.

Explaining his current initiative, Crawford-Browne noted that, as approved by Parliament, the rationale for entering into the Strategic Defence Procurement Programme was “indisputably, R30 billion spent on armaments would generate R110 billion in offsets to create over 65 000 jobs” – none of which has happened.

Crawford-Browne also highlights the fact – exhaustively canvassed in researcher Paul Holden’s recent book The Devil in the Detail – that “every cabinet minister was repeatedly warned by civil society representatives that offsets are internationally notorious for corruption”.

In particular, Crawford-Browne drew attention to then “Deputy President Thabo Mbeki (with a masters degree in economics), Trade and Industry Minister Alec Erwin and Finance Minister Trevor Manuel”, who, Crawford-Browne charges, “then abused the powers of public office to squelch investigations into the bribes and corruption that the arms deal unleashed. In so doing, they were either criminally naive or criminally complicit.”

As revealed in a series of articles, the actual performance of weapons manufacturers in terms of offset obligations arising from the arms deal has been dismal at the very least, and the entire process riddled with corruption that has been exposed in the course of corruption investigations in Sweden, Germany and the UK. – Sunday Tribune

The Big Interview: ‘My fight is about principles, not leases’

Xolani Mbanjwa
Roux Shabangu, the billionaire property developer at the centre of the R1.7bn leases saga that led to Public Works Minister Gwen Mahlangu-Nkabinde being fired and police commissioner Gen Bheki Cele suspended, believes that he has been treated unfairly.Shabangu, who has been hogging the headlines since he clinched the controversial lease contract from the Department of Public Works that have since been deemed “unlawful” by public protector Thuli Madonsela, is unhappy about the findings.He made this clear in an interview during which his wife, Percy, a law student, sat alongside him at his plush offices in Irene, Pretoria. Shabangu only has a matric.Shabangu bitterly complains how being black has unfairly thrust him into the spotlight and accuses white property developers – and his former business partner – of working with the media to tarnish his name.

His business portfolio boasts a string of shopping centres, mines in South Africa and Swaziland, properties, boats and vehicles. Shabangu scoffed at allegations that he clinched the lucrative lease contract for the new police headquarters in Pretoria only because of his political and business connections.

“People think I’ve got money because Zuma is the president. It’s rubbish. Why didn’t I need Thabo Mbeki when I was building Jabulani Mall (in Soweto) and other developments?

“Why would I rely on connections now? I’ve always had connections. I don’t have unique ones now. I know the same people I knew back then,” said the 37-year-old father of four.

The former amateur boxer said the success he’s achieved “especially at my age should be celebrated, but you can see that some people are aggrieved about my business”.

“Zuma is 69, I’ve just turned 37,” Shabangu said, introducing a new conversation while sidestepping the question about inflated leases he signed with government.

He confidently declared that his legal team would clear his name and successfully defend Mahlangu-Nkabinde’s bid to get the Sanlam-Middestad building lease nullified by the Pretoria High CourtRead more.

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