How Estina’s bank account went from R16 to R30m overnight
The influence of the Guptas was perhaps felt most powerfully in the Free State due to the extraordinary hold they had on the provincial MECs.
Of all the many corruption reports involving the Guptas, the Vrede Dairy Project in the Free State stands out as perhaps the most chilling due to the vast web of corrupt connections required to make it happen.
The story of this great heist is laid out in the latest report of the Judicial Commission of Inquiry into State Capture.
A project that was supposed to benefit local farmers ended up excluding them. When the alleged beneficiaries started asking questions, they received death threats and some were killed in mysterious circumstances.
Also read: Vrede Dairy beneficiary dies in ‘suspicious’ circumstances
This is a state capture made possible by failed oversight and lack of law enforcement, the report says.
Estina, the little-known company chosen as the vehicle for this big project, had R16 in its bank account the day before the Department of Agriculture and Rural Development (DARD) paid the first R30 million on July 9, 2012. The next payment of R34.9 million was made in April 2013, and a week later another R30 million was paid to Estina.
For about a week until 4 May 2013, the Guptas held a family wedding in Sun City, and during that week another R19 million was paid to Estina. And so on.
In the end, the Free State provincial government paid Estina R280 million, of which only 1% went to the farm itself.
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The Zondo Commission says the evidence before it indicates, at the very least, a very serious level of incompetence on the part of Mr (Peter) Thabethe in relation to the role he played in the Vrede Dairy Project . Thabethe was the leader of DARD in the Free State at the time.
Mosebenzi Zwane, MEC for Agriculture and Rural Development in the Free State, also bears a lot of blame for failing to perform a proper oversight function.
“It was a project of the Guptas and Mr. Zwane who was shown to be an associate of Gupta and a minister of Gupta,” the report read.
The Vrede project was reported by the Québec Ombudsman in 2014 for lack of control, and by the Auditor General in 2013 for embezzlement.
Also read: In Vrede, if you mention Mosebenzi Zwane, you will be ‘hunted down at night and killed’ – Dhlamini
State legal counsel also reported that the project did not follow correct procurement procedures.
A project that initially cost R13 million in 2012 for a dairy and processing facility quickly ballooned to R570 million, with Estina believed to have paid R228 million.
When a team from the National Treasury visited the site in 2013, they found that water rights were not in place, the list of beneficiaries was not provided, no business plan and no study of feasibility.
When the feasibility study was finally received, the projected milk yields were deemed highly unrealistic and there was no evidence to support the claim of helping small farmers. Treasury told Province to go back to the drawing board, come up with a more realistic feasibility plan, and make sure water and other rights were in place.
After the story first appeared in the press in 2013, the Treasury received a complaint about Estina’s improper appointment and payments. Former director of the national treasury Dumisani Cele has commissioned ENS Forensics to take a closer look at the case.
This is where things took a sinister turn. When Cele went to Thabethe’s office for more information on the project, the financial manager reportedly told him in Sesotho: “Dumisani, the Sotho are going to kill you.
Thabethe insisted Cele had no investigative powers and would declare an intergovernmental dispute.
Cele returned home without the documents he requested. It found that procurement policies had not been followed, nor Treasury requirements for deviation from budget, and an unauthorized payment of R114 million had been made. He also found no evidence of beneficiaries.
“The only area that the Commission needs to continue to report on, as there is no evidence of ongoing processes being followed, is the aspect of threats to life,” the report read.
This is not an isolated case. “It is accumulating and if left unchecked will fuel and support the paralysis of state institutions or the takeover by criminals, as well as other unconstitutional activities.”
READ ALSO : Investigator explains how Guptas raked in R229m from the Estina project
A local farmer hired by Estina said it was clear that the people running the project had no idea about cattle farming and feeding practices.
This lack of experience has cost Estina dearly, with more than 100 dairy cows starving to death in January 2016.
From the testimonies of the alleged beneficiaries, “it feels like the premises have been taken for a ride,” the report says. They were tricked into selling their cattle on the pretext that the government would give them dairy cows, but this never happened. “It was an Indian project on African soil – run by people who didn’t speak English or any local language.”
Seen in this light, Estina “used the Indian fairy tale connection [Paras, an Indian milk producer] to extract more than 250 million rand from the government, which deliberately or through gross negligence blindly pumped out money without asking questions or looking at how it was spent”.
And all of this was done while officials of the ruling party, at the provincial and municipal levels, were covering for each other to thwart legitimate questions and inquiries from opposition members.
This article was republished from Moneyweb with permission.
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