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tv   South Africa Corruption Inc.  Al Jazeera  March 29, 2018 12:32pm-1:01pm +03

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gyptian state media is expecting president and in fact a c.c. to win reelection by a landslide after three days of voting results show u.c.c. won twenty three million out of the twenty five million votes cast his only rival must of our movie star win three percent of the vote voter turnout was thirty nine percent. suspended australian cricket test captain stephen smith has apologised for his role in the ball tampering incident speaking in sydney's smith asked for forgiveness from his team and his nation to be handed a one year ban from international competition smith along with two other players devised a plan to tamper with the ball during a match against south africa british prime minister to resume ears touring the country to mark a one year countdown until the united kingdom leaves the european union breaks it was launched last year with a goal to complete the process by twenty nineteen theresa may says she's committed
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to honoring the twenty sixteen vote to break away but pro european groups are refusing to give up hopes of staying in the e.u. nobel peace prize winner in the use of side has returned to pakistan for the first time since she was attacked by the taliban six years ago the twenty year old is accompanied by her father is expected to meet the prime minister when anna was shot in the head by master taliban gunman on the way home from school those were the headlines and he is here in thirty minutes time to stay with us people in power is next. u.s. president donald trump has said he will slap new tariffs on imports of steel in alameda for a five gene will mean fossil data tax cuts have times hotter than fourteen we bring you the stories that are shaping the economic world we live in counting the cost at this time on al-jazeera.
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last month south african president jacob zuma was closed from office after a decade of corruption allegations his former associates the billionaire gupta brother was a fugitive from justice amid claims that they looted state assets now others are up to scrutiny we've been to examine the role played by international companies in a scandal so toxic it will haunt south africa for years to come. in two thousand and nine jacob zuma came to power having sold himself to south
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africa as the people's president he promised to grow the economy fight poverty and create millions of jobs. nine years later and it hasn't ended well last month zuma amidst growing corruption allegations step down a south african president forced out by his own governing african national congress the liberation party voted for to party it and one of them. to the decision to resign as president of the power within the bank. his links to an influential billionaire business family the captors were revealed last year in a mess of paradise paper style data leak the corrupt leaks appear to reveal how these three brothers a.j. are tall and rich who are friends with former president jacob zuma and in business of one of his sons set up a vast network of patronage offering monetary rewards in return for political
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loyalty to zuma. so hard trenched is corruption in south africa we are someone who know a businessman who pays bribes to put in government tenders he spoke to us on condition we hit his identity there's an expectation that they need to get something. for them. or just think it's systemic that bribe is then transferred to an intermediary then the intermediary company either transfers it to another company wouldn't bronzes of the corrupt or it's funds for the offshore trust. is not in the fort or. in some parts of the country corruption is so imbedded it's not become a deadly business. to tell for example zoomers home province. they've been over two hundred politically motivated killings in the last four years. because he caused
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a former politician left the party last year in protest to corruption within its ranks she's been targeted ever since i was receiving death threats on a daily basis and my children were also being way of receiving death threats as well for killing she says i'm a need you to turf wars between corrupt local and see politicians. last year a video of two heavily armed bodyguards was shared widely on social media. you often hear from. former. manager. she knows these men well they work for a former colleague those i his body cuts that. is they end to say you know if people can do it video like that it's close to tell you what kind of people are you dealing with this is about the
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politics of patronage or link to ten dollars it's all linked to who is controlling what state of resources the zuma years presented opportunities to prisoners to make lots of money fast. some of those opportunities seem to have been irresistible even to multinational companies who should have known better to date the scandalous implicated law firms software companies banks management consultants major accountancy practices and public relations companies more disturbing still the spotlight has fallen on older service firms who statutory role is to keep their clients honest by maintaining independent oversight of their businesses much of the attention is full and on. one of the so-called big four international ordered firms it was the cop does postal and business order to for sixteen years now its
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employees in several scandals regarding its work in south africa. the first is overreported produced for the south african revenue service jani ahead of sars as it's known unleashed this bombshell report publicly in august twenty fifteen it contained he claimed damning evidence that an elite crime fighting unit within sars was operating unlawfully for almost eight months prior to the us a national newspaper the sunday times had been running almost weekly about a rogue unit operating from within the service. the detailed hundred fifty seven page report took thirty people a year to produce at a cost of twenty three million rand. it appeared to validate the drug unit stories and implicated senior officials in unlawful activities such as spying on the national prosecuting authority and misleading the public protector and state
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security agency about six distance. one of those the center of the allegations was your luxemburg he took over the units in two thousand and eight it was set up in two thousand and seven to tackle organized crime syndicates spoke exclusively to people in power the last time i counted i think it was something like eighty two. allegations of some kind of offense ranging from breaking into president's private residence and planting listening devices. down to murdering people everything else in between it's extremely a million eighty two you have to read it yourself in the newspaper on the front page being associated with findings attributed to a reputed bull company or what i thought to be attributable company like a p m g. who basically make me out to have been
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a criminal the report also implicated them finance minister pravin don who'd previously headed sars saying he ought to have known of the existence of the unit this was later used as one of president zuma as motivations for firing gaudin as finance minister in march twenty seventh team. of nine months of harassment from questions from the special police unit called. the threat of prosecutions and charges being none of which of course materialized in nearly angered the business community and the public more generally angered them it did in a series of public protests south africans rallied behind. the problem is that. their report couldn't be relied upon. following revelations in the gupta leaks of africa's involvement with gupta linked businesses. international
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investigated in september twenty seventh teen it withdrew the conclusions of its own report. also took the extraordinary step of replacing its south african c.e.o. and his senior management team they've also paid back the twenty three million rand they charge sars for the report despite these measures many questions remain unanswered for example which if any of the specific allegations contained in the report were actually true we requested an interview with k.p. m g but they declined in a written response they restated that the report's conclusions recommendations and legal opinions should no longer be relied upon. but the damage the reporters caused will be felt for years to come says one of south africa's leading economists iraj a bt and on a narrow the revenue collection impact this year source reported
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a shortfall of about fifty billion rent you have central government now short of revenues that means borrowing more debt means running into international credit worthiness problems or if you like being downgraded we asked to interview mr murray jani to discuss these allegations but sars didn't respond since twenty fourteen under his leadership fifty five senior staff and five hundred others have quit. great friendships were broken people got divorced children were affected as a result that's. also the independence of the investigation is being called into question over a fundamental issue nobody who is implicated. in those aboard as being inverted commas guilty of one do not have a was ever to put their point of view at first from welcome to the investigation
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i envisaged a process whereby k p m g the lawyers and myself sat down in a room behind closed doors for once being honest and open and frank going through the report line by line but declined to sit down with him and then in september twenty fifteen a draft of the report was leaked to the media received a text message from a journalist from the sunday times please can i comment how do you comment on the report picture and seen k p m g should've immediately acted on that leak. they should have realized that there was something sinister billy mr meyer and it was put in place as the head of stars to. start a cleanup process which would take up the excellent scene that we had put in place so he began to for example at tac
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a particular unit that was tracking illicit financial flows because they had already compiled the file. they had on prisons and his family and a whole lot of other politically connected. and fake businesses and when i looked for me i was shocked. as far as i'm concerned it's pure as it contains absolute material mistake once even contains as far as i'm concerned fraudulent. the report from luxembourg says contains scant evidence but implied that he was complicit in serious wrongdoing. believes field sunday times articles alleging was involved in many misdeeds including spying on the president running a brothel and unlawfully operating a secret five hundred million rand fund the sunday times was later retracted stories about
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a rogue unit which the press ombudsman labeled as inaccurate misleading and unfair it also apologized to go don from luxembourg and former deputy sas commissioner ivan pele after the leak from luxembourg tried again to get k p m g to refute his counter evidence in order to restore his reputation at that point they suddenly said to me that contracted with the rooney service not with me in a written response as to why to fuse to hear the testimony of those implicated k p m g said no comment and the impact of k.p. and his role in the revenue service is a massive one hour on for school sovereignty in other words bertie to and government finances largely on the basis of taxes collected within south africa has been seriously undermined. yet another extraordinary twist to the saga as this film was being prepared for broadcast from luxembourg and another former sas official
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was summoned to appear in court on the ninth of april twenty eighth teen facing corruption and other charges brought by the hawks investigative unit bizarrely these charges are based on the contents of the now discredited k p m g a report or three strenuously deny the allegations and of our south africa's national prosecuting authority to withdraw the charges. another k p m g scandal involved south africa's most notorious waiting in twenty two teams the group to stage four days of popular nuptials for the nice at sun city a well known casino resort attendees included bollywood stars cabinet ministers and captains of industry also invited with the group to support it says k p m g afterwards k p n g's then chief executive told cook to thanking him for the event of the millennium. the company has since acknowledged it was
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a mistake to have attended but that might not have been only a mistake. as a consortium of local investigative journalists discovered the tab for the event of the millennium which cost thirty million rand was actually picked up by south african taxpayers. the scope to link dairy farm allegedly stole hundreds of millions of rand of government money which was supposed to be used to empower one hundred poor black farmers increasingly the. extraction needed advice as to how to a structure different operations for example they still close on two hundred fifty million. daily projects thirty million of it had to go to dubai and back here to pay for. the farms auditor's but they did order the books of linq way the company which laundered the wedding money back into south africa this was
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billed as a business expense by avoiding the stolen money from being taxed at bt in question sar k p m g the cook to supporters could have missed us to advise them how to do it in south africa how to do it in dubai so they use their international network international advisory services. to help them set it up in full compliance with the legislation which. order to flag the link payments saying these costs the most probably not in the production of the company's income despite the. signed off on link waste financials. so who then ordered the oldest says that question is deeply concerning to u.k. politician peter hain my olds there be no criminal prosecutions for money laundering and financial institutions and very few other enablers such as lawyers or accountants a former anti-apartheid activist he's presently campaigning for u.k.
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authorities to act against companies who he says were complicit in south african corruption they've been regulatory filings but it is not clear that these are enough to deter banks and other financial players from making their anti money laundering compliance regimes a tick box rather than a meaningful one but it's not just officers who've been caught up in south africa's cup the scandals another murky episode involves u.s. based management consultancy mckinsey and work it did for eskom south africa state turned electricity provider. in january twenty sixth eskom signed a lucrative consultancy agreement with mckinsey to help increase revenue and streamline operations a key condition of the deal was that the kinsey would partner with a local black owned company controversially a plan to partner with trillian a firm which it later turned out was linked to the politically well connected to
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brothers. six months later after questions were raised about trillions roll in the deal and the amounts because he was paid. cancelled the project in that short time i can see and trillion and one point six billion rand between them corruption watch south africa has now approached us authorities to investigate mckinsey to n.g.o.s ledgers that the us based consultancy used trillian and it's cooked the connections to secure the lucrative eskom contract in return for a massive kickbacks trillion of five hundred eighty million rand it needed mckinsey to be colluding. with him would not have been willing to enter into a contract and many of the senior executives advised against it but then the political connections trillion of course kicked in and that's how the contract was . strongly refutes the sec use ations we requested an interview with the firm to
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clarify matters but it declined in statements to told us it never had a formal partnership trillion and it's denied serving to link companies or making payments to secure contracts but bianca goodson former c.e.o. questions mckinsey's version of events the first meeting ahead mckinsey and particularly on the generation team again a gram of what they propose the delivery team should look like the generation team was tasked with boosting the efficiency of several eskom power stations according to her behaved as though it didn't want. to do any meaningful work and there were no training people question that and i was like ok trillions representation and they were actually taken aback that you won't be doing a thing. that how mckinsey and trillian were conducting the deal she resigned after just three months later she turned whistleblower and gave evidence about the affair
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to a parliamentary inquiry investigating corruption. be pushing to get more. of the generation team. by the time that as i truly have three people on the generational extreme the generation were supposed to produce the permian ran over three years for just one power station. for three people working. can you imagine what the margins mean knowing what every salary is for people it's insane she says trojans relationship with eskom was so strong that she was able to pin a draft letter to mckinsey on the instruction of a senior is com executive. the supplier development partner is trillion trillion and a woman came to work explicitly clive had told me the relationship to. petroleum and this is why some women also take charge of very. difficult they
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could leaving the campaign because the relationships exist with us clive and celine were her bosses and salema saleman. ties to the captors are so well known he's often referred to as the fourth book the brother. the kinsey say the trillion concealed it's kept a connection by not revealing that celine was its majority shareholder when it found out it terminated its relationship with trillian that was in march twenty sixth dean but says goodson mckinsey's and systems that it didn't know who it was dealing with is highly implausible. had been interacting with mckinsey five ficus a guard a partner at the firm he was a tommy seemingly ignored me and i escalated. name and it's amazing what attention i would get after that because of the slim would intervene then suddenly make you feel like ok bianca we've heard you sorry we didn't get to the most interesting two weeks ago. now we hear you say god's relationship with dates back
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to at least twenty fourteen emails uncovered by local journalists in the gupta leaks show the two correspondent about work at another state company. and in a private presentation to eskom a full two months before mckinsey pulled the plug on trillion it's a direct a flag reputational risk through association with partner at first glance because he's offering to tantalizing it would save the utility tens of billions of rand and would be on a no feel at risk basis instead of put her in a percentage of any savings it created for. it was to net mckinsey a billion rand in just six months but when sent daniels is comes head of legal began reviewing the contract she discovered concerning details clinton was extremely in weighted in mckinsey's favor you know so all the risk was actually
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with esko other scum executives had their doubts as to why the huge public utility needed mckinsey's advice at all at certain of our executive committee meetings the other colleagues. really convinced that mckinsey did head in the venue because it was the standard of additional work that they were doing. in parliament mckinsey stood by its billion rand feet david fine a senior partner based in london flew to south africa to give evidence to the corruption inquiry and i'm comfortable with the size of the fee that eskom could have actually absorb this much change but i have got comfort from my colleagues at least what they've shown me and has been independently audited and that was of value but the all of a wyman report commissioned by eskom found that the contract unusual fees structure resulted in the charging more than double market rates and mckinsey itself in its
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internal presentation to eskom flagged exorbitant fees being leaked to media as another risk. had the contract not been cancelled prematurely. could have netted almost ten billion rand equivalent to more than eight hundred million dollars for four years work. suzanne daniels discovered other irregularities the contract itself didn't appear to be valid it didn't identify trillions mckinsey's local partner and no treasury approval had been sought to mckinsey and said they relied upon eskom to seek the nice story exemptions from the treasury but you don't do things that way you don't say day by the way did you speak to your friend at the treasury and is it all cool daniels issued letters of demand to mckinsey and trillian to repay the money forty eight hours later she was suspended that's when the threat started the threats. of it increased the security is.
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sure that family save in november last year she also testified at the parliamentary inquiry there is only one way to describe this to the people of south africa. this was a pleasant three ft ending his testimony at the same inquiry david fine apologized for mistakes mckinsey had mate he also reiterated that despite the firm's justified it would pay it back please accept that we will pay the money back to south africa we did not want any tainted money that often might now be moot in january south africa's national prosecuting authority froze one point six billion rand of mckinsey and trillion as. it labelled the deal paid lee corrupt. so with the summa gupta era now over and a new president at south africa's helm can corruption in the country under control dan thinks it can be a teen is going to be defying all of that and much more and demonstrating
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that south africa is still a mandela south africa but the pride paying businessmen we interviewed isn't so sure the president may impact high level corruption the bigger transactions the bigger deals but when it comes to the the medium sized news this want to do that it's not that it's going to change last week because this film was being completed sauced chief tom ione was suspended on the orders of south africa's new president said all roma poser. meanwhile clive angel bianca goodson's former colleague denied being involved in any of the consultancy work which was done as part of the eskom mckinsey deal. business.
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model. the. business of. going places.


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