FS treasury staff pressured to make R30m prepayment to Estina, Zondo hears
Johannesburg - The state capture inquiry has heard how Free State treasury staff were pressured into making an R30 million prepayment to Gupta-linked Estina in June 2012.
Anna Fourie, a former Free State treasury official took the stand on Monday as the commission resumed hearing evidence related to the failed Vrede dairy farm project.
Fourie worked for the provincial government for over 30 years and detailed her initial involvement in Vrede matter.
She said on Friday, June 15, 2012, while at a work function, she was asked along with her colleagues that an urgent payment requested by the department of agriculture had to be processed with urgency.
Fourie said the Free State chief financial officer Sephati Dlamini informed them that they had to process the payment of R30 million that afternoon and it had to be ready by the next day when she would be meeting with officials from Estina.
Fourie explained that there were PFMA processes that need to be followed before a payment can be made. She detailed that looking through the documents related to the Vrede dairy project and the contract signed, she had several reservations.
The agreement between Estina and the department of agriculture had been signed on two different dates, on June 5 and 7.
Fourie said the first issue was that there seems to have been no tender process that was followed, secondly a feasibility study was never conducted.
Fourie explained that if a tender process was not followed then officials had to provide documentation motivating for that deviation, but in this case, none of the documents was available.
She also stressed that she took issue with the contract basis. The Free State government was to contribute over R300 million towards the project and Estina would contribute over R200 million, but the dates for payments for Estina had not been clearly set out yet for the government grants everything was stated.
Fourie pointed out that she expressed the issues with the documents with Dlamini, yet she still insisted that the process needs to go ahead.
Another issue was that the treasury did not have R30 million to pay immediately from its accounts as it often invested the money for better returns.
When she checked the provincial revenue account, only R6 million was available. Fourie said she communicated this to Dlamini, but she insisted that she needed R30 million and nothing less.
“We provided the CFO with the evidence that we could not pay the funds. I asked if we pay R5 million and that would find and the response from her was that she wanted R30 million or nothing. She was not happy but she left,” Fourie said.
“She needed the money to be paid to Estina on a Saturday morning? Is that usual for a government to make payments on weekends? asked commission chair Deputy Chief Justice Raymond Zondo.
“No it’s not usual”, Fourie said.
Fourie said at the time the money was not paid through and she went on to seek advice with the legal team in the premier’s office regarding the questionable terms of the Vrede Dairy Farm project contract.
The Vrede Dairy Farm project was established by the Free State government to help uplift underprivileged farmers in the area.
The project was allocated R220 million and only R2 million was spent on the farm. None of the people who were destined to benefit received anything from the project.
The tender for the project was awarded to a company called Estina, which had links to the controversial Gupta family. The company was awarded the tender even though it had no history of running similar projects.
It was reported that millions of rand that were paid to the Estina bank account were quickly paid out to various bank accounts belonging to Gupta owned companies. It was alleged that Atul Gupta also received R10 million in his bank account.