Global South African News Wrap – 1 February 2013 Nkandla: The letter that shows Zuma was aware

of the upgrades Inside the ANC's war with FNB NPA ‘wasting funds’ pursuing Breytenbach ANC, FNB spat is likely to silence business sector Marikana counsel decries ‘absence of evidence’ AU hails economic confidence booster Questions remain over Zuma’s Nkandla spending Ramphele’s party hits hurdle as big names elude it Medical school to revolutionise emergency care Zille attacks ANC for ‘inventing’ claims Ramphele’s statement does not deny talk of her starting her own party Black economic empowerment compliance ‘voluntary’ for companies ANC sword raised over Limpopo’s executive Bid to stop grant fraud Twelve million going to bed hungry in SA Mac Maharaj: The 'foul secret' that has torn sister from sister Anglo American - Haunted by history A government with something to hide Education charter ‘sets out state role’ League president will enjoy raised profile SARS rejects Malema’s settlement offer Direct investment in SA ‘lags that of Brics peers’ ANC keen to show it still favours wage subsidy to aid job creation for youths Eskom price strategy ‘will see industry flee from SA Education charter schools pupils on their rights

27 January 2013 Mail and Guardian Staff Nkandla: The letter that shows Zuma was aware of the upgrades The M&G is publishing a letter that dispels Thulas Nxesi's insistence that Jacob Zuma knew nothing of the R200-million upgrades to his Nkandla home. The letter, containing a detailed progress report for presentation to President Jacob Zuma, was sent on November 5 2010 by the department's minister at the time, Gwen Mahlangu-Nkabinde. It stipulated the work done on the security installations at Zuma's private residence. The letter forms part of a number of documents that the M&G reported on last year, which showed that Zuma was indeed provided with exhaustive details about progress on the Nkandla security project in November 2010. This was after he stated in Parliament that he was not aware of the scale of construction on the project. On Sunday Nxesi told journalists that after a ministerial investigation into Nkandla's funding, there was no evidence that state monies were used in its upgrades. But he confirmed over R200-million had been used on security measures after the property had been deemed a national key point. He added that Zuma was not aware of any details regarding the upgrades. The documents, which referred euphemistically to the Nkandla expansion as "prestige project A", revealed how Zuma's supposed private contribution dwindled by half from more than R20-million to slightly more than R10-million, while the total costs more than doubled. They also showed that state funds were spent on buildings for the personal use of the Zuma family and not only for new, adjoining security infrastructure, as claimed by the department of public works when first confronted about the R250-million spent on Nkandla. The renovations at the president's rural residence became a bone of contention in 2012, when it was reported that over R250-million of public funds would be used for the upgrades. The report instituted by Nxesi confirmed the state paid R206-million for the security measures. According to the report, R71-million was spent directly on security, while a further R135-million was spent on operational costs incurred by state departments involved in the upgrade.

27 January 2013 Sunday Times Page 1 Thabo Mokone, Caiphus Kgosana, Sibusiso Ngalwa and Sibongakonke Shoba Inside the ANC's war with FNB Firstrand CEO Sizwe Nxasana desperately tried to head off a showdown with the ANC over an advertising campaign by its subsidiary, FNB, featuring young South Africans criticising the government. The Sunday Times can reveal that on Monday morning, just after the ANC Youth League issued a statement accusing FNB of "treason", Nxasana sent an SMS to Minister of Basic Education Angie Motshekga. The minister had been called "brainless" by a youngster in one of the online clips. In the SMS Nxasana wrote: "Good Morning Minister. I have instructed FNB to remove the video clips from their website this morning. I will investigate how and why the clips ended [up] on their website. Sincere apologies for this. Sizwe." Motshekga's spokesman, Panyaza Lesufi, confirmed that she had received the SMS but declined to comment further, referring queries to the ANC. Nxasana could not be reached for comment. His office referred all queries to FNB. But Nxasana's swift apology did little to ease the anger directed at the bank. On Friday he, along with FNB executives, publicly apologised after a tense meeting with ANC bosses at Luthuli House, the ANC's headquarters in downtown Johannesburg. Insiders said that contrite FNB executives were hauled over the coals in the meeting, held behind closed doors. The meeting was attended by ANC secretary-general Gwede Mantashe, his deputy Jessie Duarte, treasurer-general Zweli Mkhize, economic transformation head Enoch Godongwana and party spokesman Jackson Mthembu. FNB was represented by Nxasana, FNB CEO Michael Jordaan, FNB publicsector banking head Danny Zandamela and the bank's chief marketing officer, Bernice Samuels.

Nxasana attempted to explain the intentions behind the campaign and apologised once more for video clips that included criticism of the ANC and the government. The clips that the ANC found to be "offensive" were posted on the bank's website and on YouTube. The campaign featured young people commenting on their hopes for the country. In one of the online clips, a youngster says: "Stop voting for the same government in hopes for change - instead change your hopes to a government that has the same hopes as us." Emotions ran high when Jordaan suggested that the ANC had "misunderstood" the campaign. A furious ANC delegation accused Jordaan of "insulting" the government and "feeding into the opposition narrative" by portraying the party and government in a bad light. The bank was accused of trying to turn "born frees" - those born after the first democratic election in 1994 - against the party. An insider said a "bewildered" Jordaan took responsibility for the overall campaign but said he was not aware of some of the YouTube clip s. The bank's executives said that the selection of videos posted on YouTube had not been made by senior management. "[Jordaan] admitted that he signed off on the campaign but he didn't know some of the things ... the stuff that went to YouTube. He said when he signed off on the campaign he didn't think of the interpretation we were giving ... he was remorseful." The ANC team reminded the bank's bosses that FNB held the lion's share of government accounts. According to one insider, the bank's executives were shocked at the depth of the ANC's anger. "Their perspective was that they understood that 70% of interviewees were positive about South Africa and everything else." After the meeting, the ANC and FNB issued a joint statement: "The CEO of FirstRand, Mr Sizwe Nxasana, agreed that the research clippings that were posted online were regrettable, he apologised for the posting of the research clippings online. He then assured the meeting that this regrettable incident will not be repeated." Shortly after the meeting, the financial news site Moneyweb reported that Jordaan would leave FNB this year.

Jordaan reacted with one word on Twitter: "speculative". He later tweeted: "I am not resigning as CEO of the most innovative bank in the world." The bank issued a statement on Friday, via its corporate communications division, acknowledging the apology tendered to the ANC. "We apologised for the posting of the research interview clippings online, however we are pleased that the ANC has expressed its support for the overall FNB 'You Can Help' campaign," said FNB spokesman Christine Burrows. FNB said it would not be pulling the plug on the contentious TV campaign but had agreed to take "offensive" video clips off its website. Mmusi Maimane, the DA's national spokesman, said the apology "has shown that it is acceptable to be bullied by the governing party, and it has shown the ANC that its bullying tactics work in suppressing critical voices". 28 January 2013 Business Day Page 3 Ernest Mabuza NPA ‘wasting funds’ pursuing Breytenbach JOHANNESBURG advocate Nazeer Cassim SC told Glynnis Breytenbach’s disciplinary hearing last week that the National Prosecuting Authority (NPA) was using much of its resources to prosecute one of its senior prosecutors instead of using them to fight corruption in big business. Mr Cassim was called in by Ms Breytenbach to explain why he conveyed a message from her, through Kumba counsel Mike Hellens SC, to Imperial Crown Trading (ICT) director Archie Luhlabo. Mr Cassim said he conveyed the message to Mr Luhlabo to alert him to a possible offer of immunity from prosecution from the state. Ms Breytenbach is facing a charge of alleged collusion with Mr Hellens to exert improper influence in the investigation of the Kumba complaint against ICT. Ms Breytenbach has denied the charge. Kumba and ICT are involved in a mining rights dispute concerning the 21% stake in the Sishen Iron Ore mine in the Northern Cape. In his testimony, ICT attorney Ronald Mendelow told the hearing that he considered an attempt by Ms Breytenbach, Mr Hellens and Mr Cassim to approach Mr Luhlabo as highly improper, and that they had no right to

approach him in the way they did. Mr Mendelow said it was an attempt to intimidate Mr Luhlabo to turn state witness. The hearing also heard testimony from Anthony Norton, an attorney for Kumba, that Mr Hellens had indicated he had received information that Mr Luhlabo wanted to turn state witness. The court heard last week that the reason Mr Cassim met Mr Luhlabo in November 2011 was to convey a message from Ms Breytenbach that her door was open if Mr Luhlabo wanted to turn state witness. Mr Cassim said Mr Hellens did not suggest that he threaten or intimidate Mr Luhlabo. "I told Archie there was an opportunity for him," Mr Cassim said. Further, he said NPA staff should stop fighting among themselves. "If I were in your position, I would use your resources to prosecute big business, rather than … a senior prosecutor. " The hearing continues on February 7. 28 January 2013 Business Day Page 3 Stephen Grootes ANC, FNB spat is likely to silence business sector THE joint statement by First National Bank and the African National Congress (ANC) released on Friday appears to mark an end to the dispute between the two organisations about the former’s campaign, in which teenagers make political comments in FNB adverts. However, the way in which the ANC handled the dispute and FNB’s eventual apology and withdrawal of the campaign appear to mark a change in how the ruling party deals with public discussions. At the same time, there may be, within this turmoil, the roots of a possible improvement in relations between business and the ANC, and thus business and government. The ANC’s organised outrage at FNB, which saw a series of carefully planned statements being released by its various organs, appeared to be calculated to put intense pressure on the bank. For the bank’s bosses, this could have been reminiscent of the controversy evoked by the ANC around artist Brett Murray’s The Spear image. What started with statements from ANC organs ended with mass marches outside the Goodman Gallery, and intense discussion in society around the issues raised.

For an organisation in the retail sector, with millions of South Africans as customers and attempting to win the business of millions more, this would have been a scary proposition for the bank. While it does appear that both the ANC and the government have some accounts with FNB, the bigger concern would have been a public perception that banking with the group would be seen as a public declaration of where people stood on its advertising campaign and on the ANC. Considering that millions more people have voted for the ANC than for anyone else since 1994, it would be a risky proposition for FNB’s managers to link banking with politics. For South African Chamber of Commerce & Industry CEO Neren Rau, business is receiving mixed messages. He says business is "told to speak out, but when we do, our wrists get slapped". However, he believes the party is beginning to hear business’s call for issues like the ratings downgrades and business confidence to be taken more seriously. The confidence and aggression with which the ANC reacted to the FNB matter appears to be an indication of the political power its leaders believe they have. The strong political mandate given to President Jacob Zuma and ANC secretary-general Gwede Mantashe at the party’s Mangaung conference may well have been a factor here. It allowed Mr Mantashe in particular to lead the fight against FNB, without having to look over his shoulder. Even the ANC Youth League had to fall into line. It issued its own statements condemning FNB’s "treasonous" campaign. During The Spear controversy, the league remained silent. The criticism voiced during this campaign appears to be quite similar to some criticism voiced in ANC discussion documents. It reflects a trend where the party is likely to accept criticism from people it believes support its broad objectives, but not from anyone outside its formations. The real impact on social debates around the ANC and the government it leads could well be on decisions around whether business and other organisations do decide to speak out or not. For some, the aggression shown by the ruling party could well be a warning to stay out of politics, which could lessen the number of voices in our democracy. 28 January 2013 Business Day

Page 3 Setumo Stone Marikana counsel decries ‘absence of evidence’ THERE has been a "disturbing absence of evidence that speaks to what happened" on August 16 last year, when police shot dead 34 striking mineworkers at Marikana, according to Dumisa Ntsebeza SC, counsel for the families of people who died on that day. "For instance, we have not been able to get from the police footage what happened when the first volley of bullets was unleashed, and of any other footage coming from the police of what happened on the small koppie (a second crime scene where 18 of the 34 were shot)," Mr Ntsebeza said last week to a police witness and head of public order police training, Brig Zephaniah Mkhwanazi. However, Brig Mkhwanazi could not explain what happened because he was not at the scene. The parties involved in the Marikana tragedy — the police, trade unions, workers and mine owner Lonmin — are not accepting responsibility for the death of more than 44 people during the strike, whose families attend the commission every morning waiting for answers. Last year the commission was divided into two phases in an effort to quickly get to the truth, particularly about what happened on August 16 at Lonmin in Marikana when police shot dead 34 mine workers taking part in an unprotected strike. When the commission started last year it was evident that at some point it would turn into an academic exercise, with most in the first batch of witnesses limited to expert opinion because they were not present at the scene. The 10th witness to take the stand was Erick Gcilitshana of the National Union of Mineworkers (NUM). His testimony was expected to lighten proceedings given the rivalry between the NUM and t he Association of Mineworkers and Construction Union (Amcu), a rival union. But Mr Gcilitshana could only testify on the basis of hearsay. Lonmin’s central argument is that the fight for members between NUM and Amcu — starting at Impala Platinum at the beginning of last year — sparked the acts of violence and intimidation that characterised the Lonmin strike. The police have taken a similar view. By the end of last week Mr Ntsebeza was expected to file an application in which the bereaved families seek to make a presentation before the commission.

This is an attempt by Mr Ntsebeza to remind the nation why the commission was established in the first place — to help the families of the deceased to find closure. Police have opposed Mr Ntsebeza’s application because of a request that cross-examination be excluded. The NUM was partially opposed to a paragraph contained in the application. The concerned parties have been urged to discuss the matter among themselves and produce an amicable solution, failing which commission chairman and retired judge Ian Farlam would have to make a ruling. Witnesses who were actually at the Marikana scene may only take to the witness stand by next Monday. Among these are Vusi Mohale, Thembele Ntakana, Longeni Mabutchana, Thembinkosi Mcho and Mlambisa Gxokokwana. It is expected only three will actually give evidence, with the other two called if the evidence of their colleagues is deemed insufficient. Meanwhile, the commission last week referred to the shooting of Andries Tatane during a public protest in Ficksburg in 2011. This suggests that answers coming out of the inquiry could be used to try avoid violent clashes between protesters and the police during strikes and public protests. 28 January 2013 Business Day Page 1 Elissa Jobson AU hails economic confidence booster ADDIS ABABA — The African Union (AU) summit — which celebrates 50 years of efforts towards continental unity — opened in Ethiopia on Sunday with leaders highlighting Africa’s economic progress, but warning that urgent solutions had to be found for both the new and long-running conflicts blighting the continent. South Africa’s Nkosazana Dlamini-Zuma hosted her first summit since taking over as chairwoman of the AU Commission three months ago. Benin’s President Boni Yayi, the outgoing chairman of the AU, was alone among key speakers to congratulate France for intervening in Mali three weeks ago, as African armies watched. "We want to salute France, which has taken the lead to do what we should have done.

"In the name of Africa I would like to take this solemn occasion to renew our profound gratitude to President Francois Hollande for his leadership, vision and his wise decision to deploy French troops alongside the Malian armed forces," Mr Yayi said. He lamented the "protracted time" being taken to deploy the African force of several thousand soldiers allocated to help Mali, adding Africa "could not organise its own defence". A donors’ conference to raise the hundreds of millions of dollars needed for the force will be held on Tuesday. The gathering was addressed by the presidents of Benin, Ghana, Ethiopia, Libya, Somalia and Kenya, as well as United Nations Secretary-General Ban Ki-moon and Palestinian National Authority president Mahmoud Abbas. The theme of the summit — pan-Africanism and African renaissance — ties in with the golden jubilee celebrations and has provided African leaders with an opportunity to reflect on the successes and challenges of the first 50 years of independence. Ms Dlamini-Zuma set out the AU’s vision for the continent in the year 2063. "An integrated, people-centred, prosperous Africa at peace with itself. What makes us confident that Africa’s time has arrived and that we can achieve our dream within 50 years or less?" she asked. Africa’s remarkable economic progress, was her answer. "Six of the world’s 10 fastest-growing economies are African and the continent has been growing at an average of 5% a year for over a decade, despite the global financial crisis," Ms Dlamini-Zuma said. She also cited the continent’s "growing, vibrant, resourceful and youthful population" as a key growth driver, while acknowledging the contribution of Africa’s expanding middle class (estimated at 355-million) and the growth of the private sector and the knowledge economy. She highlighted Africa’s embrace of information and mobile technology. "Close to 90% of countries in Africa have enjoyed sustained peace and stability during the (past) decade," Ms Dlamini-Zuma boasted. But later she named a long list of countries — Mali, Congo, Sudan and South Sudan, Central African Republic, Somalia, Guinea-Bissau, Comoros and Madagascar — as being on the agenda of the AU Peace and Security Council. This is more than 10% of the 54-member body. "We cannot overemphasise the need for peace and security." Ethiopian Prime Minister Hailemariam Desalegn took over from Mr Yayi as AU chairman — an annual appointment that rotates between the regions. He too celebrated Africa’s economic growth, but decried its inability to turn that prosperity into tangible benefits for citizens.

Mr Ban echoed Mr Hailemariam’s disquiet. "I am still concerned about the hundreds of millions of Africans living in poverty.… We must accelerate our efforts as we near the 2015 deadline" for attaining the Millennium Development Goals. 28 January 2013 Business Day Page 1 Wyndham Hartley and Ernest Mabuza Questions remain over Zuma’s Nkandla spending THE government has admitted to errors in tendering at the private residence of President Jacob Zuma at his family homestead in Nkandla, in KwaZuluNatal, but on Sunday appeared to sweep the rest of the dirt under the carpet. Public Works Minister Thulas Nxesi launched a task team in November last year and its report, released on Sunday, said there was no evidence that public money was spent to build the private residence of Mr Zuma, or that any house belonging to Mr Zuma was built with public money. The official government line is that Mr Zuma knew nothing about the more than R200m security upgrades at his private residence and was not even consulted on the fence that surrounds his home. However, the opposition Democratic Alliance (DA) labelled the report a poor attempt to shield President Zuma from being held accountable for this "exorbitant waste of public money". A political commentator said the report created more questions than answers, especially when it came to the sources of the money spent. Mr Nxesi insisted at a news conference that only R71m had been spent on the security upgrade and a further R135m on the operational requirements of the various departments tasked with securing the safety of the president. In total, R206m had been spent, but the task team found no public money had been spent on upgrading the actual residence of Mr Zuma. He said the renovations of Mr Zuma’s home began in 2008 before he was elected president. DA parliamentary leader Lindiwe Mazibuko said the task team seemed more determined to "nail" low-ranking officials for the scandal than to answer legitimate concerns about how Mr Zuma could have allowed this to happen without taking action. Political analyst Daniel Silke said the findings raised additional questions. "While the findings protect President Zuma from direct involvement, they raise questions about the source of money to build the houses," he said.

It was not clear whether the report was enough to exonerate the president because there were other investigations, including one from the public protector, that were still under way. The work of the task team was done entirely separately from the public protector’s investigation. Previous reports said costs amounted to R240mR250m, but these figures have not been officially audited. The auditor-general has not pronounced on the task team’s findings either, which would depend on the audit of public works books. Mr Silke said there is clearly a "mood" in the government to shield Mr Zuma from excesses that may be associated with him. "Mr Zuma is being ring-fenced from having to face the music. This is not an unusual move to keep serious officials out of trouble," Mr Silke said. The African National Congress (ANC) welcomed the outcome of the investigation and said the report would bring to closure to an issue that had generated speculative public opinion and had been used to attack Mr Zuma, the ANC and its government. "We believe that with this report, our government has proven it is financially responsive and accountable as it has responded to the public opinion on the need for investigation," spokesman Jackson Mthembu said. Reporters listened with disbelief as Mr Nxesi, Justice Minister Jeff Radebe, State Security Minister Siyabonga Cwele and Police Minister Nathi Mthethwa insisted that Mr Zuma never approved, or was aware of, the details of the work being done as a result of a security threat assessment. Responding to questions, Mr Radebe said the president had no authority over the security upgrades, while Mr Cwele said Mr Zuma would not have been aware of the design details of what was being done to secure his private residence. Mr Nxesi said the president might have been informed that work was going to be done, but he would not have been aware of the details. Mr Nxesi took aim at media reports. "We took this unprecedented approach to inform the public about this specific project, to quell some of the misconceptions which have been falsely peddled in the public space. As we mentioned at the beginning, we do not disclose any security measures pertaining to the national key points, as required by law." The report will not be made public, but Mr Nxesi did reveal there were irregularities in the handling of the contracts for the security work. Agencies such as the Special Investigating Unit, the auditor-general and the police would be sent the report "with a view to investigate possible acts of criminality". "Without dealing in detail with each and every specific appointment, the investigation has found that the supply chain management policy and

prescripts were not fully complied with in procurement of goods and services .… As an example, the Treasury regulations allow for a variation from an initial procurement order only up to 20%. However, (in one) case this was not observed. "It is very clear that there were a number of irregularities with regards to appointment of service providers and procurement of goods and services," he said. "The press briefing left more questions unanswered than it shed light on the scandal," said Ms Mazibuko. These included: • How the president could not have known about the costs of the upgrade to his own private residence? Media reports said such a briefing was given to him in 2010. And if he still claims to not know, how can he argue he has served the best interests of the public, as he is required by oath to do? • If the expenditure was justified in terms of the Ministerial Handbook, as Mr Nxesi declared, how is the R206m lawful, given the R100,000 limit on upgrades to residences belonging to members of the executive? • If the expenditure was justified by the National Key Points Act, why was Mr Zuma not given notice of this and asked to pay for the upgrade or a section thereof, as stipulated in section 3A? Furthermore, why then did the minister of public works himself admit in a reply to my parliamentary question that no money was used from the special account provided for in the National Key Points Act? • How is it justified to spend money on clearly nonsecurity requirements on a private home, including air-conditioning, an AstroTurf, a visitors’ centre, a private clinic, a helipad, state-of-the-art elevators and accommodation for staff? • What will happen when Mr Zuma ceases to be president of the Republic of South Africa? "Will he get to keep the palace?" Ms Mazibuko asked.

28 January 2013 Business Day Page 1 Sam Mkokeli Ramphele’s party hits hurdle as big names elude it COMMUNITY activist and academic Mamphela Ramphele is expected to launch a political party next month, but her plans have apparently hit a hurdle as she has failed to lure the kind of big names that would have enabled her initiative to start with momentum.

The party is expected to be launched in the week leading to the opening of Parliament, which is a big day in South Africa’s political calendar. Talk of Dr Ramphele’s party comes as most of the opposition parties in Parliament look for ways to work together in next year’s national and provincial elections. Dr Ramphele, along with Steve Biko, was one of the founders of the Black Consciousness Movement, and under apartheid she was internally exiled to Tzaneen from 1977 to 1984. A respected civil rights activist and academic, she has also served on a number of company boards and is chairwoman of resources company Gold Fields. While she was not immediately available for comment on Sunday, a source said she was set to launch the party on February 12 in Pretoria. It was initially hoped that the Democratic Alliance (DA), which is an influential cog in the plan to get Parliament’s opposition parties working together more effectively, would find a way of working with the new party. But a source said DA leader Helen Zille, who it was hoped would hop on the bandwagon, was not interested. DA spokesman Mmusi Maimane on Sunday said DA leaders had not discussed the new party. The DA has tried, without success, to woo Ms Ramphele to join and possibly lead it, taking over from Ms Zille. Azanian People’s Organisation president Mosibudi Mangena — one of the leaders rumoured to be working with Ms Ramphele — on Sunday said he was not involved in the initiative. United Democratic Movement president Bantu Holomisa — who also said he was not part of the new party — said Ms Ramphele’s move would be welcomed as her "brains would bring some credibility in the body politic of South Africa". "The emergence of Mamphela would definitely boost South Africa’s politics, which is under threat at the current moment." He said there was plenty of room for her and her political party to succeed. 28 January 2013 The Times Page 6 Mhlabunzima Memela Medical school to revolutionise emergency care KwaZulu-Natal has launched a plan to reduce the number of deaths of people admitted to hospitals in urgent need of medical care.

For years the provincial health department has struggled to stop patients dying while waiting to be treated. The plan was devised by the University of KwaZulu-Natal Medical School's acute care and trauma group - a multi-disciplinary coalition of specialists affiliated to the school. Medical school head Professor Richard Hift believes the plan, which is supported by the provincial health department and the Health Professionals' Council, will bring about significant change for the better in the medical care provided in hospitals' emergency rooms. Hift said it would lead to the standardisation of emergency medicine. "Given the scale of the problem, it is absolutely essential that we set up a strong research and teaching programme . We will be saving money and lives, and reducing morbidity with our partner, the department of health," he said. Hift said registrars would train in the emergency units at academic hospitals, which would also have a research function. He said Edendale Hospital and Ngwelezana Hospital, both in Pietermaritzburg, were developing centres of excellence in emergency care. "King Edward VIII Hospital, Durban, will be used for training registrars in trauma and acute care once its emergency care unit has been restructured. "At the moment, Inkosi Albert Luthuli Central Hospital is the only one in the province that has a specialised trauma unit," he said. The head of Ngwelezane Hospital's trauma unit, Dr Darryll Wood, said provincial hospitals needed restructuring of their casualty units, especially in respect of specialist input. He said the emergency units of many hospitals were often disorderly. "One of the initiative's objectives will be to implement a safe and simple system that works." Wood said emergency medicine covered all emergency conditions affecting patients who were acutely ill, "whether they are physically injured or need emergency care for life-threatening conditions such as heart attacks, kidney failure or asthma". "Ultimately, junior doctors and nurses working in hospital casualty units will be overseen by doctors who have specialised training in [dealing with] trauma and providing acute care."

30 January 2013 Business Day Page 3 Bekezela Phakathi Zille attacks ANC for ‘inventing’ claims DEMOCRATIC Alliance (DA) leader Helen Zille on Tuesday rounded on the African National Congress (ANC) and its Western Cape leader, Marius Fransman, for "inventing insane allegations, such as that the DA received R4m from the Guptas to renovate our Cape Town offices". Party funding has been a thorny issue, partly because South Africa does not have legislation or regulations governing private funding. In 2011, Parliament stymied an opposition proposal which mooted legislation regulating the private funding of political parties. Weekend reports alleged that Ms Zille had solicited funding from the Gupta family. According to the reports, she had gone to the Gupta estate in Saxonwold, Johannesburg, in 2011 to ask for a donation. She left with a "substantial" cheque, according to unnamed sources quoted by the weekend press. Last week, Ms Zille was accused of "hypocrisy" after she pulled out of The New Age business breakfast because the event was sponsored by stateowned enterprises. The New Age then hit back, releasing a video clip on its website of Ms Zille thanking Telkom for sponsoring The New Age business breakfast in Cape Town last year. The Guptas are the majority shareholders of The New Age newspaper and it is understood that the family are benefactors of the ANC and have strong ties with President Jacob Zuma. Mr Fransman this week questioned where the DA had obtained the R4m it paid for renovations in its Cape Town provincial headquarters earlier this month. Ms Zille wrote in her weekly newsletter on Tuesday that it was a "diversionary" tactic to accuse the DA of taking donations from the Guptas. She said an executive in a company owned by the Guptas donated money to the DA. Ms Zille said the DA had made a "commitment of confidentiality" to its donors, but media reports claiming that she had solicited funds from the Guptas had prompted her to speak out on the issue.

She said the donor had suggested she fetch a R200,000 cheque from the Guptas’ house in Saxonwold. "I and my colleague Ian Davidson duly went to the Guptas’ home, ate some of the most delicious food I have ever eaten, and received the cheque for R200,000 from the individual who had made the pledge. It was a personal cheque from his personal bank account. It did not come from a Gupta company, nor from the Guptas, but it was handed over at their home," Ms Zille said. "Perhaps most importantly, the donor has never once asked a DA government for any special favours or preferential treatment. He knows very well that we don’t function like that, " she added. ANC Western Cape provincial secretary Songezo Mjongile on Tuesday said the ANC found it interesting that Ms Zille was forced to confess she took donations as she had not wanted to confirm this earlier. "This confirms the ANC view that she consistently attempts to mislead the public and hence this revelation should force her to fall on her own sword," Mr Mjongile said. 29 January 2013 Business Day Page 3 Sam Mkokeli Ramphele’s statement does not deny talk of her starting her own party IN WHAT could be seen as a clear indication that she is about to launch her own party, community activist and academic Mamphela Ramphele on Tuesday released a statement in which she did not deny media speculation but said she would speak for herself about any "future engagements". "I would like to place it on record that I have been having conversations with South Africans from all walks of life about the state of democracy in South Africa, canvassing their views about ways in which South Africans can work together to tackle our pressing social, economic and political challenges." She said these conversations were in line with the national dialogue she was seeking to promote through her latest book, Conversations with my Sons and Daughters. "I have always been clear in articulating my views on matters of public importance and will speak on my own behalf about any decisions I might take about my future engagements," she said.

Talk of Dr Ramphele’s party comes as most of the opposition parties in Parliament look for ways to work together in next year’s national and provincial elections. Dr Ramphele, along with Steve Biko, was one of the founders of the Black Consciousness Movement, and under apartheid she was internally exiled to Tzaneen from 1977 to 1984. A respected civil rights activist and academic, she has also served on a number of company boards and is chairwoman of resources company Gold Fields. It was initially hoped that the Democratic Alliance (DA), which is an influential cog in the plan to get Parliament’s opposition parties working together more effectively, would find a way of working with the new party. But a source said DA leader Helen Zille was not interested. DA spokesman Mmusi Maimane said on Sunday that DA leaders had not discussed the new party. The DA has tried, without success, to woo Ms Ramphele to join and possibly lead it, taking over from Ms Zille.

30 January 2013 Business Day Page 2 Linda Ensor Black economic empowerment compliance ‘voluntary’ for companies NO COMPANY is forced to implement the government’s black economic empowerment policy, which is a voluntary programme, the director-general of the Department of Trade and Industry, Lionel October, said in Parliament on Tuesday. Furthermore, foreign companies are allowed to opt for alternative schemes if they find the policy unacceptable. He was responding to criticisms by opposition MPs about the proposed Broad-Based Black Economic Empowerment (BBBEE) Amendment Bill, which they argued would impose an excessive burden of compliance on business, was based on racial criteria and would act as a disincentive to foreign investment. Mr October stressed the need to redress the past during a briefing on the bill to Parliament’s trade and industry committee. Foreign companies, Mr October said, were not obliged to implement BBBEE if the policy did not gel with their business models, and could instead propose

"equity equivalents", such as skills development or small business development. He said that South Africa had opted for a voluntary and "very modest" path towards empowerment, unlike in Malaysia where it was compulsory, but he nevertheless believed the policy was an effective one. The amendment bill will align the law with the codes of good practice, which have been amended to award more points for entrepreneurial and enterprise development, provided this was undertaken on a sustained basis by including the firms into supply chains. Mr October told MPs that the government was moving into a new phase of BEE, which was to foster the creation of black entrepreneurs and industrialists in the productive sectors of the economy. The first phase was an elitist one involving the transfer of share ownership, while the second phase was meant to redress this shortcoming by providing for more broad-based schemes such as employee share ownership, among other things. The bill creates the offence of fronting (anything which undermines or frustrates the achievement of the act) and introduces stiff penalties for it. The maximum penalty proposed for individuals for misrepresenting BBBEE status is 10 years imprisonment or both a fine and imprisonment. In the case of companies, a fine of 10% of annual turnover. The bill also provides for the regulation of the verification professionals who rate the BBBEE status of enterprises for an accredited rating agency. This will be an interim measure, as the ultimate aim is auditors registered under the Auditing Profession Act to perform this work and for the Independent Regulatory Board for Auditors to function as the verification agency regulator. The bill proposes to set up a BBBEE commission within the department to conduct monitoring and compliance, as currently there was no adequate institutional mechanism for this, Mr October said. Compliance in some sectors such as agriculture, manufacturing and retail was very low, and ownership patterns were still skewed. Having the commission, with its own independent commissioner, within the department would eliminate the need to set up a costly independent institution. There has already been wide consultation on the bill, the first draft of which was released in December 2011.

30 January 2013 Business Day Page 1 Sam Mkokeli and Setumo Stone ANC sword raised over Limpopo’s executive AFRICAN National Congress (ANC) leaders in Limpopo have been put on notice that they have lost the support of their branches — a warning they regard as a precursor to their axing. Two premiers — in Limpopo and North West — may lose their posts as the ANC’s new leaders act against regional bosses who did not support ANC president Jacob Zuma’s re-election last month. In Limpopo, the ANC is led by Premier Cassel Mathale, who was a close ally of Julius Malema — expelled from the party last year in part because of his belligerent attempts to weaken Mr Zuma. Members of the party’s national working committee were in Limpopo on Monday to gather information about the state of the ANC in the province. Branch members complained provincial leaders had removed mayors unilaterally, ignored the party’s rules and caused division. ANC secretary-general Gwede Mantashe said on Tuesday: "This is part of the process of rebuilding the ANC." At a meeting, the national leadership informed the Limpopo leaders about the problems raised by the branches and instructed them to respond in writing. "A follow-up meeting will be scheduled within two to three weeks to consider and discuss the issues raised by branches, coupled with the response of the provincial executive," ANC spokesman Jackson Mthembu said on Tuesday. He said that "owing to the urgency of the need to stabilise the province", the national working committee would make recommendations to the national executive committee on how to "resolve the political and organisational challenges in Limpopo". Buoyed by Mr Zuma’s emphatic victory and the humiliation of his opponents at the ANC conference last month, the new leaders seem determined to oust their opponents, particularly those they suspect cannot deliver victory in next year’s national elections. The national government took over the administration of five departments in Limpopo after its runaway finances threatened the payment of public servant

salaries in 2010. The failure to deliver textbooks and stationery to some schools last year was also attributed to a neglectful leadership. Speaking on condition of anonymity on Tuesday, Limpopo ANC leaders said Monday’s meeting was an attempt to build a case for the disbandment of their provincial executive committee. Some described it as a "witch hunt" against people who had not backed the winning side at the ANC’s conference. They were preparing to resist their removal. The final decision to disband the committee rests with the national executive committee. A similar drive is in full swing in North West, where the ANC provincial executive committee this week disbanded its leadership in the Kenneth Kaunda region. North West ANC spokesman Kenny Morolong said on Tuesday the region would be under the administration of the provincial executive committee to ensure "smooth day-to-day running". Kenneth Kaunda deputy secretary David Kham, regarded as the mastermind behind last month’s removal of the ANC mayor in Tlokwe municipality, which was then taken over by the Democratic Alliance, was suspended. ANC North West secretary Kabelo Mataboge, believed to be a leader of a group opposed to Mr Zuma’s re-election as ANC president, was also suspended. 30 January 2013 The Times Page 2 Katharine Child Bid to stop grant fraud The South African Social Security Agency has asked more than 15million grant recipients to re-register after discovering it was awarding grants to people who were dead. It was also paying out child-care grants to adults who had rented children to act as their own. The widespread fraud has prompted the agency to change the way it distributes social grants. The new system requires all grant applicants to re-register with the agency, providing a full set of fingerprints and their ID books.

The agency, part of the Department of Social Development, this week took out lengthy newspaper advertisements to inform beneficiaries who receive social grant payouts at banks where to re-register. Agency spokesman Thomas Huma said the new registration system had been designed to "e nsure proof of life of beneficiaries, and ensure that beneficiaries are not registered more than once". A five-year Special Investigating Unit probe into the Department of Social Development that ended in 2011 uncovered "widespread abuse of the social grant system" by the agency's employees. The unit was able to recover R56-million from officials. Childline's advocacy officer, Joan van Niekerk, welcomed the agency's new security measures. "Grants are a massive cost to the economy and are quite seriously exploited by fraudulent activity. "Childline sees the need to re-register as an ongoing need. "If some fraud is stopped by the new system, Sassa will recoup the money spent on advertising many times over." It is unclear how much money is lost to grant fraud, but the spending on grants is equal to what the government spends on health. Finance Minster Pravin Gordhan allocated R105-billion towards the payment of social grants for the 2012/2013 financial year. Gordhan announced last year that with the number of grant recipients expected to increase to 17million people by 2017, the cost of social grants was expected to hit R135-billion. Re-registration will take place at local community halls, civic centres and churches. Approved applicants will receive a bank card with a secure PIN number and be able to draw grants from banks. The agency's system interfaces with the Department of Home Affairs' computer system so that when a person is listed as dead, grants will no longer be paid out to them. Caregivers who claim child grants will need to present their child at a registration point for fingerprints to be taken. Disabled people and those above 75 years who need to be visited by officials to re-register can call 080-060-1011 for assistance.

SA'S FOOD FOR THOUGHT HOUSEHOLDS' SOURCES OF FOOD

Share meals with neighbours:

5% at least five times a week 10% at least once a week 10% at least once a month 2% at least once in six months

Food provided by neighbours:

2% at least five times a week 15% at least once a week 20% at least once a month 2% at least once in six months

Food borrowed from others:

2% at least five times a week 10% at least once a week 10% at least once a month 5% at least once in six months 1% at least once a year

Supermarkets:

5% at least five days a week 20% at least once a week 40% at least once a month 2% at least once in six months 10% at least once a year

Small shops/takeaways/restaurants

25% at least five days a week 40% at least once a week 15% at least once a month 2% at least once in six months 1% at least once a year

Informal markets/street food

20% at least five days a week 40% at least once a week 10% at least once a month 5% at least once in six months 1% less than once a year FOOD TYPES CONSUMED BY HOUSEHOLDS IN PREVIOUS 24 HOURS Cereals (93.2%) Other foods (88.4%) Sugar or honey (82.8%) Foods made with oil, fat etc (71.9%) Roots or tubers (67.2%) Vegetables (61.9%) Meat, chicken, offal (57.2%) Cheese, yoghurt, milk (45.3%) Fruit (33.8%) Eggs (28.6%) Fish (16%) 30 January 2013 The Times Page 1

Graeme Hosken Twelve million going to bed hungry in SA More than 12million South Africans will go to bed hungry tonight. Though this country produces sufficient food for its population, skyrocketing prices prevent the poor - most of them urban households - from getting adequate nutrition . The hungriest people are in Cape Town (80%) and Msunduzi, in KwaZuluNatal (87%). A five-year study by the University of Cape Town's African Food Security Unit Network has exposed a food crisis that constitutes a "death sentence" for many and which the government has labelled as "serious". It found that, in Johannesburg, 43% of the poor faced starvation and malnutrition. Researchers believe the figure could be higher. According to the UN Food and Agricultural Organisation, 870 million people worldwide are chronically undernourished, 234million of them living in subSaharan Africa. The plight of the hungry was highlighted in 2011 when four children, aged between two and nine, died in a farmer's field as they began an 18km walk in search of their mother and food in Verdwaal, North West. It was later discovered that they had not eaten for more than a week. The Department of Agriculture, Forestry and Fisheries last week revealed that 12million South Africans are "food insecure". Food security refers to the ability to access adequate nutrition - food that is affordable, hygienic and culturally accepted. Food Bank SA spokesman Keri Uys said yesterday: "South Africa is in dire straights. The entire country is affected. It is not just rural areas. "Every day millions of people go to be bed hungry. There are children whose daily food is half a white-bread sandwich. How can you bring up a nation on this?" "The implication is a death sentence." The network's Dr Jane Battersby-Lennard said the University of Cape Town study focused on poor areas in 11 cities in the Southern African Development Community, including Cape Town, Johannesburg and Msunduzi. The survey covered 1060 households in each city.

Battersby-Lennard said the number of South Africans subject to food insecurity could be far higher than the survey suggested. "The figures from the surveyed cities show 77% of all households were either moderately or severely food insecure. "When it comes to South Africa, two of the surveyed cities were higher than this, which is dire. The challenge of food security in our cities is greater than imagined." She said the problem was access to adequate nutrition, not the availability of food. "This is because of poverty. People are simply too poor to buy food. On top of this, poor areas have seven times fewer supermarkets than rich areas, making it a struggle to access nutritional food. "This forces households, especially those that run out of money before the end of the month, to borrow and buy food on credit. "If supermarkets do move to these [poor] areas it often forces informal food traders out of business, making people more food insecure." She said the government had identified food security as a "critical challenge". "Though a higher proportion of rural households face food insecurity, when you look at the different scales of food insecurity - which range from mild to moderate and severe - more urban households fall within the severe food insecurity category. "Severe food insecurity means households are forced to cut back on meal sizes and numbers, with people going hungry for days. Our urban population is facing severe malnourishment." The study found two distinct heightened hunger periods - January, and during winter. On average, the poorest households surveyed spent 53% of their income on food. Department of Agriculture, Forestry and Fisheries spokesman Palesa Mokomele said that if 12million people were subject to food insecurity it implied that about 4million households faced starvation. "These are families often relying on only one kind of food, such as maize, often not in regular supply. "The government is concerned ... it is a crisis." Joe Kgobokoe, the department's chief director for food security and agrarian reform, said a "host of programmes" addressed the crisis.

"[The department] promotes food gardens at homes and schools, and assists rural smallholders to produce food." 1 February 2013 Mail & Guardian Sam Sole, Stefaans Brümmer Mac Maharaj: The 'foul secret' that has torn sister from sister Presidential spokesperson Mac Maharaj's sister-in-law has spoken to the M&G about her knowledge of a secret Swiss account. New evidence has emerged to support the claim that Mac Maharaj and his wife, Zarina, took kickbacks on a 1990s contract for new drivers' licences – and it comes from the heart of the presidential spokesperson's family: Zarina's sister, who has chosen to go public with what she says is her knowledge of the origins of the Swiss account into which the money was paid. The payments, in 1996, flowed allegedly from a subsidiary of French multinational Thales, via a Swiss account controlled by Schabir Shaik, to an adjacent account opened by Zarina Maharaj. Shaik's dealings with Thales are best known from his corruption conviction in part for facilitating an agreement for the company to pay Jacob Zuma in return for his "protection and support" as the arms deal scandal broke. During 1996, however, Thales subsidiary IDMatics was in a consortium with Shaik, bidding for the contract to produce the new credit card-style drivers' licences. Mac Maharaj was minister of transport at the time and Zarina's sister, Shirene Carim, an uMkhonto weSizwe (MK) veteran, was living in London. Maharaj has always refused to answer media questions about the payments. And when the Mail & Guardian sought to publish details of an in-camera interview under oath with the Scorpions in which he gave answers at odds with the facts, he laid a criminal complaint. He is also opposing a court application for permission to publish details of the interview. Now, in a move that appears driven in equal measure by courage and bitterness, anger and principle, Shirene Carim has come forward to recount the details of Zarina's trip to Geneva in October 1996 to open a Swiss account and to lay bare what she knew about Shaik's involvement. The existence of the bank account has been known for some time, but Carim has provided fresh details corroborating the forensic record and adding her view of the attitude of the Maharajs at the time. Documents obtained by the Scorpions during its investigation of Maharaj showed that Zarina opened an account with Banque SCS Alliance in Geneva

on October 14 1996. It was into this account that more than $210 000 was transferred, cash which originated from Thales subsidiary IDMatics. Case withdrawn The Scorpions case against Maharaj was withdrawn in 2009 by acting National Director of Public Prosecutions Mokotedi Mpshe for reasons that remain unexplained. Shirene Carim, who served with MK's special operations division from 1984 to 1987, took the initiative to contact the M&G during a visit to South Africa from her home in London. She told the M&G she struggled with the decision to make disclosures that would brand her as disloyal to her family and forever cement the rift with her elder sister and possibly the wider family. But it is also evident that Zarina's alleged disclosure to her sister that she was going to Geneva to open a bank account to receive money from Shaik injected a poisonous secret into their already difficult relationship from which it never recovered. Shirene set out the allegations in an initial email to the M&G Centre for Investigative Journalism without at first disclosing her identity. "I'd hoped that by now, justice would prevail. "In 1996 or 1997, Mac's wife stayed with me in London UK on her way to Geneva to open a bank account, as she could only have been boasting to me. 'In shock' "I was given the details of the provider of the funds – Shaik – and the reason why. I was in shock until she left, to be back the following evening. "She called the next afternoon, having missed her flight due to the time difference in Switzerland of which she was unaware. "I asked her if I should call my friends in Geneva who would collect her and give her a bed for the night. She declined, saying she'd take a hotel room and Schabir would 'have to' pay for it. "When she should have been back, a call came and I insisted on knowing who was speaking. 'Schabir' came the answer. I told him she wasn't back from Geneva where she'd gone to open a bank account for the proceeds of bribery and corruption. "She arrived, left for South Africa and the next communication was a call from her husband, Mac, who told me they were writing their wills and would I stand as executor should anything happen to them.

"I reminded him that I'd do anything for the welfare of their children who I loved as my own. He thanked me and told me he'd be in touch. I've never heard from him or seen his wife and children to this day. "I have been in a state of confusion ever since." Legacy of a 'foul secret' In a subsequent interview with the M&G, Shirene expanded on this account and her reasons for coming forward now. Shirene alleged that in the 16 years since 1996, on five trips to South Africa, she had attempted to see her sister face to face in order to deal with the legacy of what she called this "foul secret". Each time she was rebuffed, she claimed. Shirene's story is consistent with the known facts. The M&G has discovered, among the evidence submitted at the Shaik trial, previously unreported information suggestive of a link between Shaik, Thales and the account. Among the documents seized by the Scorpions from Thales' offices in South Africa were business cards and handwritten numbers for a director of Banque SCS and a fax found during the raids on Shaik featured a business card for the same director. In addition, details of the build-up to and aftermath of the breakdown in her relationship with Zarina also provide some corroboration for Shirene's account. First came a visit by Mac and Zarina to London earlier in 1996, when Nelson Mandela made a triumphant state visit as president of a newly democratic South Africa. Mandela, with Mac and family in tow, arrived on July 9 1996, Shirene's 50th birthday. Shirene's celebration Mandela's visit ended on July 13, but Mac and Zarina could not stay for Shirene's celebration, set to take place on Sunday July 14, despite having been invited long in advance. One of the reasons they stood her up is telling. On July 2, Schabir Shaik had written to engineering firm Brown & Root, Shaik's intended partners in another project under the department of transport, the planned new La Mercy airport outside Durban, now known as King Shaka. Shaik asked the American company to make arrangements for a Disney World holiday by the Maharaj family. The intended travel dates were July 13 to 16.

In his letter, Shaik noted that this assistance to the minister was "strategically important to ourselves". The family duly skipped the birthday party and Brown & Root picked up the R15 000-plus tab for accommodation and airport transfer and invoiced Shaik. It is not clear whether Maharaj ever repaid Shaik. Legacy of a 'foul secret' In a subsequent interview with the M&G, Shirene expanded on this account and her reasons for coming forward now. Shirene alleged that in the 16 years since 1996, on five trips to South Africa, she had attempted to see her sister face to face in order to deal with the legacy of what she called this "foul secret". Each time she was rebuffed, she claimed. Shirene's story is consistent with the known facts. The M&G has discovered, among the evidence submitted at the Shaik trial, previously unreported information suggestive of a link between Shaik, Thales and the account. Among the documents seized by the Scorpions from Thales' offices in South Africa were business cards and handwritten numbers for a director of Banque SCS and a fax found during the raids on Shaik featured a business card for the same director. In addition, details of the build-up to and aftermath of the breakdown in her relationship with Zarina also provide some corroboration for Shirene's account. First came a visit by Mac and Zarina to London earlier in 1996, when Nelson Mandela made a triumphant state visit as president of a newly democratic South Africa. Mandela, with Mac and family in tow, arrived on July 9 1996, Shirene's 50th birthday. Shirene's celebration Mandela's visit ended on July 13, but Mac and Zarina could not stay for Shirene's celebration, set to take place on Sunday July 14, despite having been invited long in advance. One of the reasons they stood her up is telling. On July 2, Schabir Shaik had written to engineering firm Brown & Root, Shaik's intended partners in another project under the department of transport, the planned new La Mercy airport outside Durban, now known as King Shaka.

Shaik asked the American company to make arrangements for a Disney World holiday by the Maharaj family. The intended travel dates were July 13 to 16. In his letter, Shaik noted that this assistance to the minister was "strategically important to ourselves". The family duly skipped the birthday party and Brown & Root picked up the R15 000-plus tab for accommodation and airport transfer and invoiced Shaik. It is not clear whether Maharaj ever repaid Shaik. New evidence has emerged to support the claim that Mac Maharaj and his wife, Zarina, took kickbacks on a 1990s contract for new drivers' licences – and it comes from the heart of the presidential spokesperson's family: Zarina's sister, who has chosen to go public with what she says is her knowledge of the origins of the Swiss account into which the money was paid. The payments, in 1996, flowed allegedly from a subsidiary of French multinational Thales, via a Swiss account controlled by Schabir Shaik, to an adjacent account opened by Zarina Maharaj. Shaik's dealings with Thales are best known from his corruption conviction in part for facilitating an agreement for the company to pay Jacob Zuma in return for his "protection and support" as the arms deal scandal broke. During 1996, however, Thales subsidiary IDMatics was in a consortium with Shaik, bidding for the contract to produce the new credit card-style drivers' licences. Mac Maharaj was minister of transport at the time and Zarina's sister, Shirene Carim, an uMkhonto weSizwe (MK) veteran, was living in London. Maharaj has always refused to answer media questions about the payments. And when the Mail & Guardian sought to publish details of an in-camera interview under oath with the Scorpions in which he gave answers at odds with the facts, he laid a criminal complaint. He is also opposing a court application for permission to publish details of the interview. Now, in a move that appears driven in equal measure by courage and bitterness, anger and principle, Shirene Carim has come forward to recount the details of Zarina's trip to Geneva in October 1996 to open a Swiss account and to lay bare what she knew about Shaik's involvement. The existence of the bank account has been known for some time, but Carim has provided fresh details corroborating the forensic record and adding her view of the attitude of the Maharajs at the time. Documents obtained by the Scorpions during its investigation of Maharaj showed that Zarina opened an account with Banque SCS Alliance in Geneva on October 14 1996. It was into this account that more than $210 000 was transferred, cash which originated from Thales subsidiary IDMatics.

Case withdrawn The Scorpions case against Maharaj was withdrawn in 2009 by acting National Director of Public Prosecutions Mokotedi Mpshe for reasons that remain unexplained. Shirene Carim, who served with MK's special operations division from 1984 to 1987, took the initiative to contact the M&G during a visit to South Africa from her home in London. She told the M&G she struggled with the decision to make disclosures that would brand her as disloyal to her family and forever cement the rift with her elder sister and possibly the wider family. But it is also evident that Zarina's alleged disclosure to her sister that she was going to Geneva to open a bank account to receive money from Shaik injected a poisonous secret into their already difficult relationship from which it never recovered. Shirene set out the allegations in an initial email to the M&G Centre for Investigative Journalism without at first disclosing her identity. "I'd hoped that by now, justice would prevail. "In 1996 or 1997, Mac's wife stayed with me in London UK on her way to Geneva to open a bank account, as she could only have been boasting to me. 'In shock' "I was given the details of the provider of the funds – Shaik – and the reason why. I was in shock until she left, to be back the following evening. "She called the next afternoon, having missed her flight due to the time difference in Switzerland of which she was unaware. "I asked her if I should call my friends in Geneva who would collect her and give her a bed for the night. She declined, saying she'd take a hotel room and Schabir would 'have to' pay for it. "When she should have been back, a call came and I insisted on knowing who was speaking. 'Schabir' came the answer. I told him she wasn't back from Geneva where she'd gone to open a bank account for the proceeds of bribery and corruption. "She arrived, left for South Africa and the next communication was a call from her husband, Mac, who told me they were writing their wills and would I stand as executor should anything happen to them. "I reminded him that I'd do anything for the welfare of their children who I loved as my own. He thanked me and told me he'd be in touch. I've never heard from him or seen his wife and children to this day.

"I have been in a state of confusion ever since." Legacy of a 'foul secret' In a subsequent interview with the M&G, Shirene expanded on this account and her reasons for coming forward now. Shirene alleged that in the 16 years since 1996, on five trips to South Africa, she had attempted to see her sister face to face in order to deal with the legacy of what she called this "foul secret". Each time she was rebuffed, she claimed. Shirene's story is consistent with the known facts. The M&G has discovered, among the evidence submitted at the Shaik trial, previously unreported information suggestive of a link between Shaik, Thales and the account. Among the documents seized by the Scorpions from Thales' offices in South Africa were business cards and handwritten numbers for a director of Banque SCS and a fax found during the raids on Shaik featured a business card for the same director. In addition, details of the build-up to and aftermath of the breakdown in her relationship with Zarina also provide some corroboration for Shirene's account. First came a visit by Mac and Zarina to London earlier in 1996, when Nelson Mandela made a triumphant state visit as president of a newly democratic South Africa. Mandela, with Mac and family in tow, arrived on July 9 1996, Shirene's 50th birthday. Shirene's celebration Mandela's visit ended on July 13, but Mac and Zarina could not stay for Shirene's celebration, set to take place on Sunday July 14, despite having been invited long in advance. One of the reasons they stood her up is telling. On July 2, Schabir Shaik had written to engineering firm Brown & Root, Shaik's intended partners in another project under the department of transport, the planned new La Mercy airport outside Durban, now known as King Shaka. Shaik asked the American company to make arrangements for a Disney World holiday by the Maharaj family. The intended travel dates were July 13 to 16. In his letter, Shaik noted that this assistance to the minister was "strategically important to ourselves".

The family duly skipped the birthday party and Brown & Root picked up the R15 000-plus tab for accommodation and airport transfer and invoiced Shaik. It is not clear whether Maharaj ever repaid Shaik. During this time, Shaik also addressed a letter to Mac at the Dorchester Hotel in London, where he was staying as part of Mandela's entourage. The letter confirmed the booking at Disney World and included the following note to Mac: "Brown & Root people, my partner and colleagues in South Africa, were expecting you to call them. Kindly advise Dr Anwar Wissa when that would be possible given your more relaxed schedule in the States. Zarina's bitterness "Special message. I understand from my warehouse that the expected documents had reached your desk in the UK. Kindly confirm at your soonest." Mac and Zarina did see Shirene during that London trip, however. Shirene and her partner Ted joined them for a meal at a restaurant on the Thames. After dinner, despite the glow of South Africa's democratic transition and the glittering setting, some of Zarina's bitterness burst through, Shirene alleged. "We went out for a coffee on the balcony. Zarina stood there and said, in front of everyone, in front of my daughters, in front of their partners, in front of her children, she said: 'If it wasn't for you, Mac would be minister of defence'." The background to that comment was, according to Shirene, her perceived political unreliability: "According to them, I was a renegade." She believes this stemmed partly from a report she made to Mac about conditions in ANC camps in Angola following the 1984 Pango mutiny, which was brutally put down. "I was in the camps in Pango and I was listening to the people complaining [about conditions] and I was saying to them, 'I will take your complaints back to HQ.' Causes of the mutiny "So, when I went back to Lusaka, I said to Mac: 'You know people are very unhappy … and the causes of the mutiny, I've been told it was this and it was that.' "Some of the soldiers had been [there] since the 1976 uprisings: they were not being deployed … many of them had not even been allowed to set foot outside the camp in eight years. "And Mac said: 'Oh you're just a …' I forget the term he used – someone on the periphery."

Shirene is aware that she will be accused of drawing on this well of bitterness to make up a damaging story about her sister after the existence of the Geneva bank account was first revealed in City Press in March 2007. Against that accusation, she said, she had raised the issue before. Her partner, Ted Dougherty, confirmed that she long ago relayed to him the outlines of Zarina's Geneva gambit and its implications. Shirene said she also told her brother Adam, who lives in Canada, and her daughter Magali long before the details became public. "I told Magali because she was staunch ANC and she said, 'Mum, you've got to go to the ANC and report them.' I said, 'Magali can you imagine what would happen if we brought this up? What would happen to their children?'" An explanation Shirene said Adam did not want to get involved and she was worried that a wedge had been established between her and her daughter. "Since my sister went to visit her in June last year, she hasn't communicated with me. I don't know what Zarina has told her." Shirene said she also wrote to Mac and Zarina asking for an explanation for why they had involved her. They never wrote back or came to see her again, in spite of passing through London on many occasions. In about 2007, she also wrote an email about Zarina to two other people: activist and artist John Matshikiza and former M&G editor Ferial Haffajee. Matshikiza was a friend of Shirene's when he lived in London. Involved in corruption When she realised he had written the foreword to Zarina's autobiography, Dancing to a Different Rhythm, published in 2006, she made contact: "I needed to warn him so he would be prepared whenever it became public knowledge that she had been involved in corruption." She said neither Matshikiza (who died in 2008) nor Haffajee replied to her. Haffajee said that she received the correspondence and wrote back, but did not receive a reply. She said she recalled that Swiss accounts were mentioned amid "personal stuff" about Zarina and she passed the information on to the newsroom with a caveat about the source, but it was never followed up. Corroboration of these contacts was provided by Zarina herself. Shirene showed the M&G an SMS from her most recent communication with her

sister, in December last year, in which Zarina notes: "Shirene, the ever widening chasm between us can perhaps still be narrowed – the content of your emails to Johnny when he was still alive and a journalist, notwithstanding. Drop in in the new year." But the casualness of the invitation infuriated Shirene: "Like ... I should 'drop in' – even if you might be busy – [when] what I wanted to say was: 'I wanted to see you only to ask you why you burdened me with your foul secret which you expect me to take to my grave'." 1 February 2013 Financial Mail Page 28 Rex Gibson Anglo American - Haunted by history What kind of company will Mark Cutifani inherit? Every move Anglo American makes provokes an intense response from its myriad local stakeholders. This despite its moving its primary listing to London 14 years ago . Rex Gibson reflects on the role mining, and in particular Anglo American, has played in the SA economy. It may be one of the most inept public relations performances ever by a government not renowned for its PR skills. President Jacob Zuma went to the World Economic Forum in Davos intending to reassure the world that SA welcomed investors in mining. But it appears that nobody told some of his top lieutenants. A few days before, mineral resources minister Susan Shabangu launched a broadside of remarkable ferocity and insensitivity against Anglo American and its subsidiary, Anglo American Platinum (Amplats). The two culprits had had the nerve to announce their business proposals without talking to her. Though clearly directed at these two, her bullying approach carried a disturbing message for the industry as a whole: "I'll show you who's the boss." The result was that Zuma felt obliged to repudiate Shabangu, insisting that investors were welcome. But that didn't do much for the confidence and sense of security of those looking to store their money for the long term in a safe place. What prompted the Shabangu onslaught? The announcement by Anglo and Amplats that they were considering plans to enhance long-term sustainability by mothballing some shafts and retrenching about 14000 workers. They hadn't even bothered to discuss the matter with her. She had a mind to reconsider all Anglo's mining rights, perhaps put them out to auction if they didn't comply with legislation. The companies were reckless destroyers of

jobs. As for Anglo's promise to create a similar number of new jobs in its other operations, that didn't even warrant comment. Labour observers were dismayed by her criticisms, some of them irrational, others ill-considered and intemperate. To whom was she proposing to auction the mining rights? The sort of ANC buddies who acquired Aurora and hastened its death? The Chinese or Russians? She didn't say. Labour analyst Loane Sharp's response was unequivocal: Shabangu needed to pull herself together. "Government has stumbled from crisis to crisis without paying attention to the possibility that it might have caused the problem itself," he told a newspaper. "The real casualty of government policy and attitude is mining employment." More than 500000 mining jobs have disappeared since 1994. Mining expert Peter Leon said the minister's reaction to the Amplats restructuring plans was "unhelpful, emotional and regrettable". But that didn't silence Shabangu's supporters. It was as if Zuma might never have bothered to go to Davos at all; as if, suddenly, the battle was not between government and Anglo, but between Zuma and his own followers. The bout of ministerial petulance was quickly followed by more provocation from ANC secretary-general Gwede Mantashe. In an SABC radio debate, he offered this conciliatory thought to "welcome investor" Anglo: "You come in here and steal our money and treat us like visitors, like second-class citizens ... you treat us with utter disdain." Poor bemused Davos investors. If this was what constituted a welcome to SA, what would a deterrent be? It was becoming crystal clear that the ghost of nationalisation was stalking the corridors of power again, a manifestation of a barely suppressed hostility long nurtured. It opens up a whole new field of debate. How much harassment will a foreign investor endure before deciding to call it a day? And would it be an economic disaster for SA if Anglo American, say one foot out of the door already - were to decide that the disincentives were beginning to outweigh the inducements? Once the question was unthinkable, but things have changed. SA no longer commands the world mining scene. Some expertise has seeped away. Mining's contribution to GNP is down to 5%, far lower than in its heyday. And the country missed out on the 10-year boom in minerals other than gold, which lifted several international competitors like boats on a spring tide.

Those facts are not reason enough to drive companies away. SA still has enormous reserves, including the largest known deposits of platinum in the world.

But if the criticism from Shabangu indicates how she plans to implement a policy of greater state intervention - as an alternative to nationalisation - the situation becomes problematic. Mining requires the sort of long-term investments that can contemplate a 12to 20-year horizon. It demands security of tenure, consistency of policy and the right to exercise the one quality that is denied to bureaucrats entrepreneurship. How many external investors would submit themselves to lectures from politicians on the number of people they should employ and what they needed to do to ensure a sustainable future for the company? Not many, I think. After all, SA is the supplicant; the fund providers can go where they like. So the time has come to placate the investors, not alienate them. And the first step in that is to stop the dissenting and confusing voices in government spewing their resentments. The loss of an Anglo American would be a grievous loss indeed and quite unaffordable at a time like this. Of course, conflicts between business and government are not unusual, anywhere. Governments in trouble will turn on big business. And big business, if it is wise, will lower its profile and make soothing noises for a while. In time, both parties will bow to an age-old rule: business must be allowed to make profits if government is to profit, too. It was ever thus. Nowhere is this more true than in the SA mining industry. And it is true that, up to now, every new disagreement since the ANC came to power in 1994 - from the mining charter onwards - was resolved (or at least held at bay) by apparently reasonable compromise. But suddenly there are ominous signs that government is ready to keep on turning the screws. Having allowed its own maverick lobby ample scope to unsettle the market with nationalisation threats, Zuma felt able to proclaim at the ANC's national conference in Mangaung in December that the threat of a government takeover was over; SA was to implement Trevor Manuel's 20-year economic plan, which does not provide for nationalisation. His announcement was designed to reassure nervous investors that their money was safe. The sense of relief was palpable, but possibly premature. In any case, someone forget to tell Shabangu, who was contemplating a somewhat different approach to investors, provoking a lingering question: had

the ANC really turned away from mine grabs or did it have something else up its sleeve? Did it even matter, since the president and the minister seemed to be on different paths and happy to contradict each other to the bewilderment of the people they were wooing? It became clear that nationalising the mining industry still haunted the hearts and minds of influential ANC members, consequences be damned. Because Zuma had declared the prospect of state ownership to be out of sight didn't mean that it was out of mind, too. Poor bemused Zuma. His goodwill visit to Davos had been undermined by his own ANC allies. It was the culmination of a series of setbacks. Things hadn't gone right for him since his so-called "victory" at Mangaung. Damaging and often illegal strikes; service delivery protests; anger over arbitrary administrative decisions; violence and anarchy in village streets; murders and killings; downgraded ratings; unemployment at dangerous levels; corruption entrenched. Yeats's bleak sentiments - or something like them - must occasionally have leapt unbidden to his mind: "Things fall apart/The centre cannot hold/Mere anarchy is loosed upon the world." The obvious truth is that there can be no certainty in mining without good, clear law and a steadfast government committed to implementing it. Mere party policy is not enough. Policy is not cast in stone. It can be changed by circumstance or whim. There is nothing to stop the ANC from "reviewing" its own policy decisions. And the notion of "greater state participation" is so vague that government can redefine it whenever it wishes. At present the powers of the minister are circumscribed largely by the extent of her own desire to exercise them. She is not restrained by some other body, like the courts for instance, as in Chile. No wonder the outside world views the proposed new situation as still vague, uncertain and undesirable. So what's holding Anglo back from packing its bags? I can't claim to be a dispassionate observer. I was less than dispassionate when Anglo decided to close down the Rand Daily Mail, internationally renowned as a fierce opponent of apartheid, in 1985. That left me with the dubious distinction of being the paper's final editor. The man who took the decision agreed later that closure was a mistake. He was Gordon Waddell, then chairman of Johannesburg Consolidated Investments, an Anglo subsidiary. He went on the record to say: "If I had known then what I know now, I would never have closed it." That amounted to an indictment of Anglo's laissez-faire ownership style. But this act of negligence must be weighed up against the benefit Anglo's policy brought to the media as a whole. It may seem odd and disproportionate to place any kind of emphasis on Anglo's role as guardian of the media when measured against the billions in

gold and diamonds that was its central reason for existence. But if a free press is indeed essential for democracy, then SA has reason to be grateful for the Anglo legacy, then and now. It challenged a brutal regime; kept alive a flicker of hope for millions that justice would come; reaffirmed that not all whites were ganged up against the majority population. In any case, it makes an intriguing footnote in history. There was a time when Anglo owned virtually the entire English-language press. It was an unhealthy concentration of power. Both parties feared that they might be tainted by any suggestion that the company held the reins and manipulated its newspapers to sing a common anti-National Party anthem (as the Afrikaans press did willingly for its Nationalist masters in those days.) The charge was totally untrue. No sensible business would want to be in constant confrontation with its own government. Neither would individual newspapers want to be regarded merely as members of a compliant choir conducted by a common boss. Both Sir Ernest Oppenheimer and his son and successor, Harry, agreed early on that they would follow a hands-off policy, leaving their media holdings in the hands of unaligned managers and politically independent editors. Thus Anglo brought a fresh and vigorous concept of press freedom to SA. British newspapers on which they were modelled were often used to further the political ambitions of proprietors. SA editors - oh, irony - owed no such allegiance and were, in reality, more free than their British counterparts. This freedom was vigorously demonstrated when Harry Oppenheimer urged business to support PW Botha's controversial "constitutional dispensation" in the 1980s, which he said was "a step in the right direction". It gave Indians and coloureds a semblance of a say over their own political affairs but disenfranchised all Africans forever. Two of his own newspapers, the Rand Daily Mail and the Sunday Express, rejected Oppenheimer's view publicly and forcefully. Neither editor had any fear of being fired. It dispelled forever the notion of proprietorial control. The National Party-supporting press could hardly believe it. The country was better for it. It may be that one day the concept of a challenging press will come to be seen as almost as valuable to the country as anything extracted from the ground. Which invites the question of whether Anglo still has something to contribute to the country. The answer, I submit, is a resounding yes. From the time that Sir Ernest Oppenheimer outwitted Cecil John Rhodes to wrest control of Southern Africa's diamonds, Anglo American Corp and its alter ego, De Beers, have been giants in international mining. Over the years, their contribution to SA's exchequer runs into billions in taxes and royalties. The money enabled the country to survive two world wars and nearly 50 years of ruinous apartheid that would have led inevitably to bankruptcy. It has generated an incomparable reservoir of experience and

talents which are readily available to its still vibrant local operations. To the extent that National Party politicians allowed it, and sometimes in defiance of their efforts to prevent it, it brought improved wage-earning skills to millions being denied that opportunity. (Jobs were just as important then as they are today.) If the hidden benefits didn't quite match the obvious ones, they certainly reinforced them. Foreign investment makes a difference in the lives of the underprivileged. Well-funded companies are better placed to capture future opportunities. When mining is allowed to become more productive, homes and schools and playing fields and medical centres begin to spring up. For that alone, foreign investment should be welcomed. True, like all its competitors, Anglo American was a creature of its times and thus not always impeccable or even enlightened. But, on balance, it did more good than harm. Far more. Its well-known Chairman's Fund has dispensed millions to help needy citizens. And the company is capable of doing still more. It seems it really wants to. To make it feel uncomfortable is to cut off its nose to spite our face. Unemployment is SA's biggest problem. The country needs long-term vision and a commitment to creating jobs before the next uptick in the world economy creeps upon us. We failed in the last boom. It mustn't happen again. Expertise, nous and hard cash are needed, wherever they come from. It doesn't need quick-tempered politicians. Zuma can do something useful by ensuring that everyone on his team knows that. What it means At its peak, Anglo controlled just over 60% of the JSE Dominated mining, but made a wider contribution to SA 1 February 2013 Business Day Page 8 Editorial A government with something to hide AT FIRST blush, Public Works Minister Thulas Nxesi’s use of the National Key Points Act to justify the expenditure of an obscene amount of public money on President Jacob Zuma’s private rural retreat, and to avoid having to respond to the entirely justified outcry, seems a stroke of genius.

This apartheid-era law — one of as many as 70 that still restrict the flow of information against the spirit of the constitution — allows the minister to declare any place a national key point if, in his opinion, it is "so important that its loss, damage, disruption or immobilisation may prejudice the republic, or whenever he considers it necessary or expedient for the safety of the republic or in the public interest". Not only does the government then have the right to refuse to release any information pertaining to a place so declared, but it can prosecute anyone who does, and seek to have them jailed. And the public doesn’t even have the right to know what the national key points are — they are deemed so sensitive and secret that discussion of their very existence must be censored. Hence Mr Nxesi’s attitude that the media should be grateful for the scraps of information he deigned to feed them, as they shouldn’t really be discussing the subject at all. Fortunately, South Africa is now a constitutional democracy, so Mr Nxesi’s arrogance may yet come back to bite him. It is likely that the courts will, yet again, be called upon to declare unconstitutional a law that any reasonable government would have scrapped as contrary to democratic principles. The National Key Points Act is clearly unconstitutional because it has the potential to turn people into criminals without them knowing they are doing anything wrong, and because the extreme secrecy clause prevents accountability and makes it impossible for anyone to assess whether decisions made under its cover were rational. The Constitutional Court has already ruled that executive decisions must have a rational basis. Good luck to Mr Nxesi if he ever has to explain to the court why spending more than R200m on Mr Zuma’s private property, "only" about R70m of which was for security upgrades, was a rational move in a country where almost 25% of the population does not enjoy food security and service delivery riots occur almost daily. There is another reason Mr Nxesi may yet live to regret resorting to scraping the bottom of the apartheid legislation barrel to achieve his narrow political goals, whatever those may be: he has painted himself into a corner. That is because although there are various laws that provide for necessary expenditure at the state’s expense to ensure the security of senior government officials, there are strict limits when it comes to privately owned properties. And the National Key Points Act specifically states that when a property is declared a key point, securing it must be at the owner’s expense. Explaining that one in court will be interesting. There is no small irony in the fact that Mr Nxesi’s attempt at a cover-up — and implied threat that the might of the state would be used to crack down on anyone who did not accept it — came in the same week as Reporters Without Borders released its annual World Press Freedom Index, in which South Africa dropped 10 positions to 52nd out of 179 countries.

Lest we be accused of hysteria, let it be noted that 52nd is a respectable ranking that signifies a place where information still generally flows freely and journalists are not actively persecuted. But the decline is worrying — the first time since 1994 that South Africa has not made the top 50. Reporters Without Borders attributes that to the threat posed by the Protection of State Information Bill, but it may as well have mentioned the National Key Points Act. The real problem is not the laws, but the fact that South Africa has a government that does not want the public to know what it gets up to. 1 February 2013 Business Day Page 4 Karl Gernetzky Education charter ‘sets out state role’ THE government’s obligation to provide quality education has been clarified, and its progress can be tracked, following the release of a charter on basic education rights by the South African Human Rights Commission on Thursday. Civil society bodies hoping to encourage improvements — or even basic standards — in schools have turned to the courts. Several cases last year stemmed from the dysfunction in many parts of the school system and a lack of efficient management, and financial constraints on provinces’ ability to provide education. The commission on Thursday released a Charter of Children’s Basic Education Rights, which states the legal obligations on the government to ensure basic education, as well as services and support for children, and the educational outcomes that must be achieved. Speaking at the launch of the charter, commission chairman Lawrence Mushwana said despite improvements in education, it was a "serious indictment on all of us" that South Africa was "still arguing about education norms and standards" years after the end of apartheid. Along with setting out the obligations — ranging from safe and functional school institutions and ensuring access for, and retention of, pupils — the charter lists a range of indicators based on national and international commitments made by the state. The commission will use these indicators to conduct an annual evaluation measuring the rate of progress in the system, based on the government’s data and time frames, but also data and research from community and academic organisations.

"The right to a basic education is a constitutionally protected right that is unequivocally guaranteed to all children in South Africa," said commissioner for children’s rights Lindiwe Mokate in the foreword of the charter. It was a central right that was not qualified by expressions such as "available resources", "progressive realisation", or "reasonable legislative measures" which were applicable to other socioeconomic rights in the constitution. Ms Mokate said while the charter was not a legal document, the commission hoped it would have a "standing all of its own" due to the consensus and scope of rights that it outlined. Cameron McConnachie, an attorney at the Legal Resources Centre, which represented a number of civic organisations in court action against the government, yesterday welcomed the charter, saying it would be an "extremely useful reference" for activists, parents and pupils. Court actions brought by civil society bodies include issues of teacher post provisioning in the Eastern Cape, national norms and standards for school infrastructure, and the timeous delivery of textbooks in Limpopo. All cases were finalised, by court order or by out-of-court settlement. The deputy director-general for planning and oversight in the Department of Basic Education, Palesa Tyobeka, said on Thursday that while at a national level "a lot has been done, through clear policies and good intentions" the gaps in quality remained immense. 1 February 2013 Business Day Page 3 Setumo Stone League president will enjoy raised profile JULIUS Malema’s vacant post in the African National Congress (ANC) Youth League is up for grabs and at least four candidates are understood to have privately declared their ambitions for the role. Among the names being touted are newly elected ANC national executive committee member Pule Mabe, league deputy president Ronald Lamola, as well as league national executive committee members Andile Lungisa and Abner Mosaase. The successful candidate could see his political and public profile raised, particularly with the country’s general elections coming next year. Former youth league presidents Malusi Gigaba and Fikile Mbalula now serve as ministers in President Jacob Zuma’s Cabinet.

Some of the league’s provincial leaders were on Thursday reluctant to disclose their preferred candidate. Mr Zuma and the other ANC officials are expected to make a final decision on whether the league will go, in May, to a national general council or an early national elective conference. If Mr Zuma opts for the general council, then only Mr Malema’s position is expected to be filled. Financially, this would be the cheaper option since the general council takes fewer days to conclude. However, if Mr Zuma decides on an early conference, then the entire national executive committee of the youth league will have to be disbanded and 35 new members elected, including the top five officials. The league presidency is a paid post, with Mr Malema reportedly having earned about R25,000 a month before he was booted out of the ANC. Mr Lamola is said to have fallen out of favour with a section of the league’s national executive committee — linked to the exclusion of the league’s Limpopo provincial secretary, Jacob Lebogo, and its former spokeswoman, Magdelene Moonsamy, from the list of league delegates who attended the Mangaung conference. Mr Lebogo this week declined to comment on matters relating to the league’s national executive committee. A source said Mr Lamola has also been accused of sidelining league delegates who favoured Mr Zuma in Mangaung. Mr Lungisa is Mr Malema’s former deputy, but fell out of favour in 2011 when Mr Malema was re-elected for a second term. A source said Mr Lungisa enjoyed the backing of KwaZulu-Natal — the league’s biggest province in terms of membership — as well as the Western Cape and Mpumalanga. An insider in Mpumalanga denied this, saying Mr Lamola, also from Mpumalanga, was their only preferred candidate. Unlike in the ANC, where branches were allocated a single delegate and thereafter those with more than 700 members were given additional delegates, each youth league branch will bring two voting delegates. Both Mr Lungisa and Mr Mosaase were seen to be instrumental in the running of the youth league after Mr Malema was expelled. Mr Mosaase has served the organisation longer. He is also the national convener of the youth league in KwaZulu-Natal. Mr Mabe had to ward off resistance when he was reinstated as league treasurer-general last weekend. The decision, taken on Friday, was almost overturned on Saturday morning when it emerged that his presence at the league’s executive committee meeting was not sanctioned by the ANC. 1 February 2013 Business Day

Page 3 Amanda Visser SARS rejects Malema’s settlement offer FORMER African National Congress (ANC) Youth League president Julius Malema’s proposal to pay R4m to settle his tax liability of more than R16m has been rejected by the South African Revenue Service (SARS). The agency this week applied in the North Gauteng High Court for the sequestration of his estate. Mr Malema has been in the political wilderness since his expulsion from the ANC last year and now faces financial woes after SARS rejected his offer. SARS states in the court papers that Mr Malema is factually insolvent — he planned to borrow the R4m to settle his tax debt. It would be to the benefit of his creditors if his estate was sequestrated to enable a trustee to find the hidden assets, lift the corporate veil where necessary, and collect monies and assets due to the insolvent estate. SARS started investigating the tax affairs of Mr Malema and the companies associated with him in 2010. It assessed him for outstanding and additional taxes, and interest from 2005 to 2011, to the tune of R16.1m. Another assessment for the 2011-12 year indicated an additional R2m tax liability. The court documents referred to discrepancies in his explanations of where large amounts of money that were deposited into his bank account and that of the Ratanang Family Trust came from. The value of his Sandton property was initially set at R7.1m, but subsequently dropped to R3.6m. SARS said in the court papers it had confirmed that the property was bought for R3.6m and that a further R5.8m had been paid to a contractor for "building works". Mr Malema initially said his net assets were worth R8.5m, but later changed that to R5.6m and eventually R1.4m. "It is contended that these discrepancies are not conducive in concluding that the respondent has indeed made a full and frank disclosure to SARS," the agency said in its notice of motion. SARS advised Mr Malema in 2009 that his tax affairs were not in order. He subsequently filed his tax returns, but did not include a statement of assets and liabilities. Mr Malema further did not include indirect assets such as the Schuilkraal farm that is registered to an entity linked to Gwama Properties, which is 100% owned by his family trust. He neither disclosed any loan account or any rights associated with the farm.

According to the court papers, the trust received a large number of deposits, "a significant amount of which was in cash, and the majority was spent on Mr Malema’s personal expenses". The trust was a conduit for Mr Malema to receive funds and was "in actual fact (his) alter ego". When SARS questioned Mr Malema about monies deposited into his bank account and that of the trust, he first said they were donations from anonymous donors, but when it was pointed out that SARS had established where the deposits came from, he changed tack. SARS further pointed out that only a few people and entities had deposited the money. Mr Malema then said the sums were not really donations, but "distributions of earnings" and "exempt dividends". Efforts to contact Mr Malema through his attorneys of record were unsuccessful. Mr Malema has until February 18 to indicate whether he will oppose the sequestration application. The matter has been set down for February 27. 1 February 2013 Business Day Page 2 Evan Pickworth Direct investment in SA ‘lags that of Brics peers’ SOUTH Africa is losing ground to its Brics (Brazil, Russia, India, China and South Africa) partners and other countries in Africa as instability spooks investors and a lack of skills limits growth potential, according to a survey of 12,000 global business leaders in 40 economies. The survey, by Grant Thornton, was released on Thursday. South African executives were found to be among the most stressed people in the world. Nearly half of senior executives said they were taking on too much responsibility due to the shortage of skilled staff, which had also resulted in increased operating costs. Foreign direct investment flows plummeted 43.6% in the first half of last year, according to United Nations (UN) statistics, and the survey by Grant Thornton leaves little reason to think a turnaround is imminent. The survey gave South Africa a particularly poor rating, as only 12% of global business leaders said they were looking at the country as a potential investment hot spot this year. Africa as a whole achieved a 13% response, but 57% of business leaders chose the five biggest emerging economies of

China, India, Russia, Brazil and Mexico as the preferred destinations for their money. The fall in foreign direct investment to South Africa was the largest decline among all developing economies surveyed in the UN report, whereas African foreign direct investment as a whole was up 5%. The South African government was seen as hostile to foreign companies after three departments opposed the R16.5bn Walmart investment in South Africa in 2011. Since then, social upheaval — service delivery strikes and violent wage protests — has further dented South Africa’s reputation. The Grant Thornton survey comes in the wake of ratings downgrades of South Africa by major ratings agencies and the rand weakening to its worst level in four years as foreigners reduce holdings of the country’s assets. The perceptions of foreign investors do not match those of South African businesses, however. Of the 41 countries included in Grant Thornton’s annual optimism survey, South Africa’s business owners were the 11th-most positive about business prospects for the next 12 months. Meanwhile, Russian Foreign Minister Sergey Lavrov and his trade and defence colleagues will visit South Africa next month to start raising the less than stellar level of bilateral trade and other ties ahead of the March 26-27 Brics summit in Durban, the Department of International Relations and Cooperation said yesterday. 1 February 2013 Business Day Page 1 Natasha Marrian ANC keen to show it still favours wage subsidy to aid job creation for youths THE youth wage subsidy is still on the table, and is likely to form part of a raft of "incentives" to promote employment for the young, the African National Congress (ANC) said on Thursday. The subsidy has been a point of contention between the ANC and its ally, the Congress of South African Trade Unions (Cosatu), which is vehemently opposed it on the grounds that subsidising businesses to hire young people will displace older workers. The Treasury has already set aside R5bn for the subsidy to create 423,000 new jobs, but Cosatu’s opposition has stalled its implementation for nearly two years. It is estimated that 50% of people between 18 and 29 years old are unemployed.

ANC head of policy Jeff Radebe on Thursday indicated the party’s appetite for "youth wage incentives" had not diminished. "The youth wage incentive is an issue that’s been on the table for quite some time now. The processes in Nedlac (the National Economic Development and Labour Council) have not yet been concluded," he said. "As the ANC we want to move with speed on this issue because we are ready." While the minister of finance had already budgeted for the incentives and the party believed it could help to draw large numbers of young people into employment, Mr Radebe said the ANC would not "rush" into it without talking to its social partners. "We are hoping that before the state of the nation address, or soon thereafter, there must be a bilateral between the ANC and Cosatu in particular to deal with this issue," he said. "We do know that there are many people within the business sector who are looking forward to the resolution of this issue." Mr Radebe was speaking ahead of a three-day ANC national executive committee lekgotla — which includes party leaders and senior government officials — taking place in Irene, Gauteng. While the discussions to unfold this weekend would culminate in a final decision on the subsidy, Mr Radebe was clear that the ANC favoured such incentives. "It will depend on the outcomes of these engagements, but we want to do it — that’s our intention as the ANC," he said. Secretary-general Gwede Mantashe said on Thursday there was a difference between incentives and the subsidy. Incentives pointed to mechanisms which made employing young people "attractive", he said, adding that "... the wage subsidy may be one of those incentives". There are a number of other ideas on the table this weekend to induce companies to employ youths. According to a resolution adopted at the ANC’s conference in December, which were released on Thursday, labour, the government and business had to unite to tackle youth unemployment without placing existing workers at risk. The resolution said that the state had to "act to improve the quality of active labour market policies and create incentives for absorbing the young unemployed", in order to help unskilled young people.

The party noted that even if annual economic growth rose to 5%, unemployment among 15 to 24-year-olds would be 44% and 31% by 2020 and 2030 respectively, "in the absence of special other interventions". Returning the youth wage subsidy to the party’s agenda may heighten tension between the ANC and Cosatu. The lekgotla will also discuss another contentious issue taken up by Cosatu unions — Eskom’s application for a 16% electricity price hike for each of the next five years. Mr Mantashe said there was a "stronger" emphasis at the lekgotla on the party assessing the performance of its government. The meeting had already received a briefing on the country’s financial outlook — giving it a sense of what is "possible and not possible", he said. Cosatu spokesman Patrick Craven said on Thursday the federation would comment on the subsidy only after it received a report from its leaders at the lekgotla. 1 February 2013 Business Day Page 1 Allan Seccombe Eskom price strategy ‘will see industry flee from SA THE Chamber of Mines on Thursday tore into Eskom’s application for a tariff increase, saying the utility was more interested in its credit rating than the interests of South Africa. More than half of South Africa’s platinum mines are loss-making or marginal and 37% of gold mines are in a similar position. Over the past five years, electricity added R7bn to their costs. The mining industry would be pushed over the tipping point if Eskom’s application to the National Energy Regulator of SA (Nersa) for a 16% increase in electricity prices each year over the next five years was approved, the chamber said at a Nersa hearing in Midrand. If Eskom was granted the hike, this would mean that between 2007 and 2018, electricity prices would have risen 589%, Roger Baxter, senior executive at the chamber, told the hearing. He said Eskom was too focused on the return on capital, or profit, from its new power plants and it was not the price of coal that was the major driver behind its application. This was evident in the fact that two thirds of the

proposed increase in electricity prices was attributable to return on capital and depreciation charges. "This clearly shows Eskom is primarily focused on achieving a standalone investment grade rating at the expense of the competitiveness of South Africa’s electricity intensive tradable sectors," he said. Political, regulatory and operational concerns saw several ratings agencies lower South Africa’s sovereign rating late last year and state-owned organisations, including Eskom were downgraded too. "If power costs continue to rise, we would be in an ironic situation where all the major companies operating in South Africa are not investment grade and Eskom is," Chamber of Mines president Mark Cutifani said on Thursday. "That would be an unbelievably crazy outcome. That’s why the government, Eskom and industry have to agree what a great South Africa looks like." It appeared that Eskom needed the large return on capital to secure its investment-grade status, and the annual 16% increase over the next five years would deliver that, Mr Cutifani said. "To get there in five years is crazy, because you’d sacrifice every one of the other major corporates in the country. I can’t understand why anyone would think that’s a good idea." The increase would not only harm the mining sector, it would also push South Africa into the world’s second-highest quartile of electricity prices — from being the cheapest country for electricity in 2008, Mr Baxter said. To keep it within the most competitive range, the rise should be closer to the inflation rate of 6%. "The economic impact of Eskom’s proposals is substantially negative. The South African economy cannot absorb the proposed further doubling of the price on the back of a price that has already trebled," Mr Baxter said. Eskom’s proposed price trajectory would lead to further deindustrialisation of South Africa, he said. Eskom was working a weighted average cost of capital of 8%, but Mr Baxter said it should be closer to 6% as the utility could secure reasonably priced finance because — unlike private companies — it had a sovereign balance sheet to back it. Furthermore, its objectives should not be entirely commercial. Not generally given to hyperbole, Mr Cutifani — Anglo American CEOdesignate — said the mining sector was in a "crisis". "People use the word crisis and in many cases it’s overused. In this case, it’s a legitimate word. If this proposal goes forward, mines will close and jobs will be lost. Pure and simple," he said.

Anglo American Platinum, the world’s largest producer of platinum, has temporarily delayed plans to shut four loss-making shafts and plants at the cost of up to 14,000 jobs because of weak demand and prices, and soaring input costs. At AngloGold Ashanti, which Mr Cutifani is leaving to join Anglo, electricity as a share of costs has risen to more than 20% from 12%. Eskom’s proposal would take it beyond 40%. "At these sorts of numbers we really will struggle. We’ll all struggle," he said. "This strategy is inconsistent with the government’s strategy to industrialise and increase employment across the country." The chamber’s vice-president, Mike Teke, said the mining sector would like to see an increase in electricity prices of 6%. Its coal specialist Dick Kruger said it costs about R650m to establish a new colliery with a 1-million ton-per-year capacity. The country needs to find 100-million tons of coal in the coming years — ironically also for Eskom’s immense needs — and mining companies need to be convinced about the economic viability of their investments over the long term before making decisions to build mines. 31 January 2013 The Times Page 6 Poppy Louw Education charter schools pupils on their rights Striking a blow for beleaguered pupils, the SA Human Rights Commission yesterday launched the Charter of Children's Basic Education Rights . The new charter is the third such, following the example of Ireland and the UK. Legal Resources Centre attorney Cameron McConnachie said the charter will ensure that all stakeholders, including pupils and parents, will be aware of the government's legal duties to provide a decent education. "It's very clear what needs to be done and what the main issues are. As more and more people become aware, they will use the charter to ensure that education is improved the way government envisioned it." The 36-page charter outlines the government's obligations to ensure that education is available, accessible, acceptable and adaptable.

The charter subscribes to the principles of the constitution and highlights the challenges facing education in terms of culture, safety, discrimination, infrastructure and society's changing needs. Human Rights Commission member Lindiwe Mokate said the charter would ensure that communities were fully informed of the government's legal obligations - internationally, nationally and regionally - in terms of basic education . "There has been progress in education but huge challenges, which negatively affect the poor and vulnerable, remain." Though it is not a legally binding document, the charter provides a list of the benefits that children and parents can reasonably expect of the education system, and a means by which principals and teachers can formulate strategies for their schools and measure performance. The charter is also intended to be a source of information for members of parliament.

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