If the Guptas - or anyone else - are “responsible for anything untoward, charge them”.
This was the best way to avoid state capture and assure administrative justice, said Public Enterprises Minister Lynne Brown in a wide-ranging interview to dispel suspicions about her integrity as the custodian of six of the biggest of South Africa’s multibillion-rand state-owned enterprises.
Brown stressed her conviction that strictly abiding by, and strengthening, the legal and regulatory framework governing state-owned companies was the best way to achieving a fair, predictable and corruption-free business environment.
Intervening or “interfering” in board appointments or tender processes risked overreaching the limits of her ministerial function, and undermining procedural integrity.
Brown’s statements this week are in part a response to the inconclusive “state capture” report late last year by former public protector Thuli Madonsela, which advanced “observations” - rather than findings - to make the case for an official commission to get to the bottom of myriad claims about shady deals in the state sector, and the role of the controversial Gupta family.
The long-awaited and widely read report cast suspicion on many named individuals - Brown among them - and served to confirm public anxiety about the scale of corruption and venality in the state sector.
Brown believed, however, that had she had an “opportunity to explain” (her role as “shareholder representative” in relation to board appointments and tendering process in state-owned companies), Madonsela “would have probably understood it differently”.
Brown said while she had no difficulty accepting her responsibilities as a minister, there were limits to the reach of her “oversight”.
“I am responsible for it, but there’s a whole process. It’s not a question of my choosing or wanting someone in particular on a board. You cannot just use your own (preferences). There are sets of criteria that (candidates) have to match. If you don’t fit the criteria, you cannot make the board.”
She said her own contribution to improving oversight was to implement “a second half-yearly review of conflicts of interest”, following which there had been some resignations, though not necessarily because of conflicts of interest.
On tenders, she said: “I don’t make decisions about which company should win a tender. I never get to see it, and that’s how it should be. I have nothing to do with it. I’ve never told a chief executive or board to appoint any company for anything, it’s not my place. I must allow the board to exercise its fiduciary responsibilities.”
Asked specifically about the Guptas, Brown acknowledged meeting “one (Gupta) brother” in the Western Cape 15 years ago. “I am told it was the eldest brother that I met.”
This on its own did not mean anything.
“Anybody in my position sees lots of people. And lots of people come and say to me: ‘Can you put this one on the board?’” She always told them the process did not allow for such intervention, and that she wouldn’t intervene, anyway.
Brown said successfully neutralising the threat of state capture or corrupt practice would depend on more direct action.
In specific reference to the Guptas, she said: “The first point is, if they are responsible for anything untoward, charge them. The second point is that I am lobbied by lots of people for a number of things. It’s what I do with what I am lobbied with (that determines whether) my integrity is in place. It could be the Guptas, or anybody else, it does not and has not affected me.”
Brown also addressed the controversial and still unresolved proposed joint venture between Denel Asia and VR Lazer Asia, reportedly associated with the Guptas.
She had “signed off” on the deal more than a year ago, but the Treasury had yet to make a decision.
“I have signed off on this, because the company that has gone into partnership with Denel is a company it has been doing business with for about 10 years.
“I cannot make a decision on a company based on the people who run or own it unless those people have been charged and gone to prison, or there are charges against them. So, there has been a bit of a conflict between the Department of Public Enterprises, myself, and the Minister of Finance, because I signed off in terms of the Public Management Finance Act, and he has not signed off. It has been more than a year now, which also means the companies are not doing business.
“The issue is the fact that the company is a friend of the Guptas (but, given that it) has been in Denel for more than 10 years there does not seem a fair and logical way to exclude them.
“If there is wrongdoing we must report them to the correct structure, whether the Hawks or the police but I cannot act unfairly towards them because I don’t like the look in their eyes. And if Denel has done anything wrong, act against them. But at this stage, I don’t think they have done anything wrong.”
Brown said she and Finance Minister Pravin Gordhan had met to discuss the impasse, “and we agreed we must speak to each other again to try and reach agreement on this, which is what I am hoping we will do now”.
Brown acknowledged that winning contracts to provide goods or services to state-owned companies such as Eskom and Transet “can make you very wealthy” and this called for scrupulous adherence to procedures.
“We are coming to the end of (coal supply) contracts that are now 20, 30 or 40 years old, and there’s a long line of people in the queue waiting to be the new beneficiaries of those contracts. It’s a complex matter, but if you set up a proper process it can work.”
In the interview on Friday, Brown also expressed satisfaction at the Eskom turnaround - its posting a R9.2billion profit in September, achieving 500 load shedding-free days so far, increasing power generation, and increasing sales to the rest of the Africa by 600percent in the past six months; acknowledged that while “I come from the tradition of opposing nuclear (power) I am a lot more practical about it now. I think it’s clean, I think it’s renewable. There is no other counter to coal at the moment that can produce enough electricity”.
The decision had been taken before her appointment. The focus now should be on “the safest and most transparent route in relation to building the reactors”. Nuclear was “a sore point for many people, and I feel strongly Eskom must go on roadshow to talk about it.”
"I cannot make a decision on a company based on the people who run or own it unless those people have been charged and gone to prison, or there are charges against them. So, there has been a bit of a conflict between the Department of Public Enterprises, myself, and the Minister of Finance, because I signed off in terms of the Public Management Finance Act, and he has not signed off. It has been more than a year now, which also means the companies are not doing business.
“The issue is the fact that the company is a friend of the Guptas (but, given that it) has been in Denel for more than 10 years there does not seem a fair and logical way to exclude them.
“If there is wrongdoing we must report them to the correct structure, whether the Hawks or the police but I cannot act unfairly towards them because I don’t like the look in their eyes. And if Denel has done anything wrong, act against them. But at this stage, I don't think they have done anything wrong.”
Brown said she and Finance Minister Pravin Gordhan had met to discuss the impasse, “and we agreed we must speak to each other again to try and reach agreement on this, which is what I am hoping we will do now”.
Brown acknowledged that winning contracts to provide goods or services to state-owned companies such as Eskom and Transet “can make you very wealthy” and this called for scrupulous adherence to procedures.
“We are coming to the end of (coal supply) contracts that are now 20, 30 or 40 years old, and there's a long line of people in the queue waiting to be the new beneficiaries of those contracts. It’s a complex matter, but if you set up a proper process it can work.”
In the interview on Friday, Brown also expressed satisfaction at the Eskom turnaround - its posting a R9.2billion profit in September, achieving 500 load shedding-free days so far, increasing power generation, and increasing sales to the rest of the Africa by 600percent in the past six months; acknowledged that while “I come from the tradition of opposing nuclear (power) I am a lot more practical about it now. I think it’s clean, I think it’s renewable. There is no other counter to coal at the moment that can produce enough electricity”.
The decision had been taken before her appointment. The focus now should be on “the safest and most transparent route in relation to building the reactors”. Nuclear was “a sore point for many people, and I feel strongly Eskom must go on roadshow to talk about it."