IPID plans; DPCI high profile investigations & narcotics/firearms units; Illicit tobacco trade: TISA

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06 March 2019
Chairperson: Mr F Beukman (ANC)
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Meeting Summary

VIDEO: Hawks to brief parliament on high profile cases

The Committee welcomed the filling of the position of acting Executive Director of the Independent Police Investigative Directorate (IPID), as required by law after the Committee resolved to not renew the contract of the incumbent. The Acting Executive Director is Mr Victor Senna, previously the IPID CFO and would occupy the acting position from 1 March 2019 to 31 May 2019. The Minister would avail himself to explain his decision to the Committee upon the Committee’s request. Mr Senna presented the immediate priorities of IPID and measures to improve financial performance.

Members wanted to know about Mr Senna’s security clearance, experience and qualifications, maintaining IPID’s independence and plans for the continuation of the National Strategic Investigative Team. There was discussion of the human resources delegations and current high-profile cases before IPID. The Committee was satisfied with the experience and qualifications of the Acting Executive Director possessed. The Committee was confident that IPID was working independently. It is also important that IPID investigations are not compromised by third parties. The matter of the review of the Act would be undertaken by the Sixth Parliament. Senior management and provincial heads were called on to support the Acting Executive Director. If there are any concerns or interference, IPID must inform the Committee because if the Committee is not aware of certain matters, it would be difficult to intervene

The Tobacco Institute of SA (TISA) briefed the Committee on the illicit cigarette trade in SA by looking at studies conducted on the number of cigarettes sold in SA below the Minimum Collectable Tax as these are the cigarettes deemed illegal. SA is the first country in the world to allow an illicit brand of cigarette to become the biggest in the market.

Members asked Tisa about who was behind Gold Leaf tobacco and benefited from it, whether tobacco has taken over some transnational currency, frequently grown on the borders and used as a form of payment in exchange for drugs, where the money was going to and why there were so few arrests and convictions for this crime. Members were interested in the specific geographic footprint of the illicit tobacco value chain and if there was police capacity to specifically deal with this trade. The Committee was concerned about the seriousness of the crime resulting in loss of jobs and tax revenue for the country. There was concern that not enough was being done.

The Directorate for Priority Crime Investigation (DPCI) then briefed the Committee on the current workforce profile of the DPCI, recent appointments, review of the personnel plan between the DPCI and SA Police Service Detective Services and progress with the establishment of the narcotics and firearm unit. Other matters addressed in the presentation were the current capacity and proposed fixed establishment for the National Bureau for Illegal Firearms Control and Priority Violent Crime (NBIFCPVC) and progress with establishment of the SA Narcotics Enforcement Bureau (SANEB). The lengthy presentation then detailed progress made on the high profile cases before the Directorate including Schabir Shaik/Former President, JG Zuma/Thint Holding, MTN, Agridelight, AgriBEE Fund, installation of water purification systems, state capture: Ekom and Tegeta/Trillian and McKinsey, Homix, Estina, Transnet, Eskom/Impulse International, Venda Building Society (VBS), Ronald Bobroff and Partners, BOSASA, Tannenbaum, Steinhoff, Eskom Pension Fund, Central Energy Fund, PRASA and Swifambo Rail Agency, pyramid scheme contravening the SA Reserve Bank Act, Pastor Timothy Omotoso, illegal trafficking of rhino horns, dismantling of clandestine laboratory and the Verulam Mosque attack. The presentation then informed Members of success highlights of the DPCI.

The Committee welcomed the success and progress and questioned the appointment process, skills set, increasing personnel numbers in the provinces and the capacitation of the Directorate and its specialised units including tools of the trade – this was a point of emphasis in the Committee’s discussion. Further questions probed the establishment of the National Bureau for Illegal Firearm Control and Priority Crime, changes to the Drug Master Plan, cooperative relationships with the National Director of Public Prosecutions, amounts lost due to corruption as seen in the high profile cases and the proliferation of bogus Indian doctors in KZN.

This was the final interaction between the Committee and the DPCI for the Fifth Parliament – it was hoped the Sixth Parliament would deal with the financial resources of the Directorate as a top priority. 

Meeting report

Chairperson Opening Remarks
The Chairperson outlined the Committee programme for next week saying that the SA Police Service (SAPS) would brief the Committee on recruitment of new members. The Committee received a lot of communication last month from interns refused entry to SAPS and communication from parents indicating there was no feedback on the applications. The SA Police Union (SAPU) and Police and Prisons Civil Union (POPCRU) will also be invited to the meeting. 

Next week Wednesday, 13 March 2019, Crime Intelligence will present its turnaround strategy and progress with regard to that. There were also a number of matters raised by the Committee last year regarding vetting and management stability which would further be explored in this meeting.

The following Tuesday, the Committee would focus on the election rollout of SAPS and its preparation for the election. The agenda might include discussion on the firearms management system – a lot of correspondence has been received on this matter and the status of licenses etc.

Today the Committee would receive the introduction of the new Acting Executive Director of the Independent Police Investigative Directorate (IPID), Mr Victor Senna, as well as to hear the progress plans for the entity over the next three months. The Committee will also be briefed by the Directorate for Priority Crime Investigation (DPCI) and the Tobacco Institute of SA (TISA) on the illicit trade of cigarette.

The Chairperson informed Members that last week Friday, he received a letter from the Minister regarding the appointment of Mr Victor Senna in terms of Section 6(4) of the IPID Act for the period until 31 May 2019. As the Committee is aware, the position of the Executive Director at IPID was vacant. Mr Senna would occupy the position from 1 March 2019 until 31 of May 2019, for a period of three months. The Minister would avail himself to explain his decision to the Committee upon the Committee’s request.

Subsequently, the Chairperson responded to the Minister that it would be appreciated if he introduces the acting Executive Director. Unfortunately, due to events that unfolded over the last two days in Carletonville where nine mineworkers were killed and more than 60 houses were set alight, the President requested the Minister attend to the matter. The Minister phoned the Chairperson to render his apology for his absence from this meeting. The Committee condemns that behaviour and believes that the Minister and National Commissioner must deploy the necessary resources to the area to attend to the matter.

IPID: Priorities Going Forward
Mr Victor Senna, IPID Acting Executive Director, thanked the Members for the opportunity. He assured Members there was no crisis at IPID and it is, in fact, business as usual. Although saddened by the departure of Mr McBride, everyone strongly believes he laid a strong foundation and left a capable team at IPID.

Everyone at IPID was committed to ensure the independence of the Directorate was maintained and the team would not allow anyone to interfere with that independence. He also emphasised that IPID was left with only one month in the current financial year and it will then be the new financial year. The plan is to ensure the Annual Performance Plan (APP) is approved and the current financial year’s targets are achieved. And the new plan for the new financial year has already been approved.

No case will be affected in any way through the departure of the former Executive Director. IPID has over 190 investigators led by the National Head of investigation who will continue to perform their functions diligently without fear or favour. The entire department is united and has committed itself to working even harder in ensuring IPID remains to be a credible oversight body.

In terms of immediate priorities, the Investigation programme will continue to operate in line with Standard Operating procedures. On‐going investigations, especially high profile investigations, will receive priority in consultation with the National Prosecuting Authority (NPA). IPID has requested a meeting with the National Director of Public Prosecutions (NDPP) to address prosecution of IPID cases and appointment of prosecutors to deal specifically with all IPID high profile cases. Focus will continue on priority cases i.e. death in custody, death as a result of police action, rape and corruption. The focus will also be on ensuring strategic targets as per the Annual Performance Plan (APP) are achieved. Other priorities are fast tracking filling of critical vacant positions, implementation of Section 23 to ensure investigators are on par with SAPS - this will boost the morale and improve performance, finalise IPD structure to ensure it is aligned to plans (Department of Public Service and Administration meeting scheduled for 8 March 2019), Head Office relocation as facilitated by the Department of Public Works, ensure HR Delegations are approved to improve decision making, continuation with current outstanding litigation, i.e. classification litigation, overall amendment of the IPID Act should be undertaken to strengthen IPID independence and finalisation of the policy on lifestyle audits and costing thereof.

Measures to improve in financial performance included:
-The Department is anticipated to under spend on compensation of employees due to delays experienced in finalisation of the revised organisational structure. The Department has since arranged the meeting on 8 March 2019 with DPSA to address all matters raised on the revised organisational structure
-All contractual obligations with valid invoices will be settled before the end of the current financial year in order to avoid accruals in the following financial year
-The travel agent has been engaged to address commitments on travel and accommodation
-ICT has also been reprioritised in order to replace old computers and other IT infrastructure
- Possible projected under spending in goods and services was redirected to the core function to address the shortage of investigative equipment
-Regular budget control committee meetings will continue to monitor and make recommendations on possible over or under expenditure to ensure the Department remains within its allocated budget

The Chairperson stated that it would assist the Committee if Members would not comment or ask questions relating to the Helen Suzman Foundation’s appeal and the former Executive Director’s application before the court.

Ms Kohler Barnard (DA) asked whether Mr Senna’s had security clearance. She was impressed with his qualifications and asked him to detail his experience and successes in fields related to IPID’s mandate. She wanted to know how many times he had met with the Minister of Police prior to the departure of Mr McBride because it would bring to question the independence of IPID. Special treatment has been granted to various people but Mr Senna has assured Members it would not happen under his watch – the question is how the team would maintain IPID’s independence. She asked for a full list of high profile cases before IPID. She wanted to know whether there were any plans put in place by the Department of Public Works for office accommodation for IPID.

Mr Z Mbhele (DA) asked for clarity and assurance about plans for the continuation of the existence of the National Strategic Investigative Team (NSIT) and whether the unit would continue unhindered and properly supported. He asked for an explanation about the need for HR delegations from the Minister because he assumed IPID managed its own HR unit given its independence. The key provision of the IPID Act that now kicks in, notwithstanding the current court process, is section 6 (5) which requires that a vacancy of Executive Director must be filled within one year - this means that come 1 March 2020, there must be a permanently appointed Executive Director. The current Parliament will rise on 20 March 2019 and the Sixth Parliament will convene around 29 May 2019 and there will be budget reviews and APP hearings within a very compressed time line. It is the responsibility of the Minister to make the appointment after receiving endorsement from the Committee. He asked Mr Senna what he would do to ensure he plays his part in the filling of the vacancy of the Executive Director within one year to be compliant with the law.

The Chairperson explained the Minister would engage the Committee on the last question – the next two weeks would be utilised for this.

Mr P Mhlongo (EFF) noted that yesterday, he was listening to SAfm where Gen. Phahlane was attacking IPID and he had to intervene as a Member of the Committee because that cannot be allowed. It sounded as though Gen. Phahlane was exonerating himself on the state public broadcaster when people know that some of those matters were before SCOPA and the relevant structures. One understands the influence of the role played by pubic discourses. Therefore, it would be important for IPID to be transparent and go onto these platforms to explain to the public. Gen. Phahlane plain right belittled an institution that actually aims to protect this country. Gen. Phahlane misled the public and those people must be crushed by any means necessary regardless of their standing in society. As the Acting Executive Director, Mr Senna should take up the task and explain this to the public. When the decision was made, the Member made his views known. South Africa is at its weakest point right due to corruption. He was happy to hear the acting Executive Director state that nothing was going to change because some politicians decided to sell our country for a drumstick of chicken. With the Human Resources delegation, what tools would be used to get the HR powers back? The Member thought this was about the life and death of IPID as it relates to the Constitutional Court judgment on IPID. The independence of IPID should not be stifled in any way by politicians.

Mr L Ramatlakane (ANC) welcomed the Acting Executive Director. He said the Committee must support the process outlined in the presentation which is the engagement with DPSA about the structure. If there is no agreement with DPSA about the organisational structure, it will be problematic. He was also happy with the assurance provided by the Acting Executive Director regarding the mandate changing. The point emphasised around the independence of IPID was very important because it is in compliance with the Constitutional Court including the point that high profile cases would not disappear. The assurance should also filter through to the provinces. IPID does not have a big budget and the 3.11% under-spending is concerning. The Member was uncertain of where the under spending occurred because one would expect over expenditure in IPID’s space because unplanned things always come up. He recognised the importance of the amendment of the IPID Act and said it must be fast tracked - unfortunately this would be done by the Sixth Parliament. It should be made clear in the Legacy Report that the matter should be expedited. Some Members keep reading something that is not in the current legislation – the current legislation designed IPID as a government department. Section 7 of the current Act requires IPID to report to the Minister - it says must report.

Ms A Molebatsi (ANC) welcomed the Acting Executive Director and assurance made in his statement that no case would be affected by the departure of the former Executive Director. IPID will continue work as normal and maintain its independence. These statements were encouraging. She wished the team best of luck.

Ms P Mmola (ANC) asked whether all members, including provincial heads, were vetted. She asked the Acting Executive Director to ensure all critical vacancies were filled.  

Mr Senna said out of the 29 members, only 15 have valid security clearance – the rest of the security clearance is still being finalised by the State Security Agency including that of Mr Senna himself. IPID is not a Chapter Nine institution and therefore the Accounting Officer’s responsibilities are listed under section 7 of the Act. Mr Senna said that he can perform those duties because the Executive Director is tasked with exercising oversight over IPID. He emphasised the Executive Director does not investigate and is not an investigator. Investigations are conducted in the provinces. Section 6 (4) of the IPID Act specifies that in the event that the Executive Director is unable to fulfil their duties, the Minister can appoint any official to Act – it could be anyone. This is not something new. Four officials were nominated for the acting position. Mr Senna said he is only in the position for three months and after that he will be going back to the position of CFO. Before he was appointed, Mr Senna only met the Minister at the lekgotla with everyone else. He then met the Minister after he was appointed in the acting position.

Mr Matthews Sesoko, IPID National Head of Investigations, said the NSIT is part of IPID’s structure and it will not change. The national office deals with strategic corruption matters and high profile cases. IPID was supposed to come before the Committee in early February to provide an update on high profile cases but the presentation as been made available. On the Phahlane matter, the Acting Executive Director will decide how he will deal with it - these matters are usually dealt with in consultation with prosecutors. The Senior Advocate guiding the investigation saw to it that the two Generals are charged as they were. That is the position at the moment.

Ms Nomkhosi Netsianda, IPID Chief Director: Corporate Services, advised that on the city forum building, the tender has once again been advertised with the closing date of 19 March 2019. The team is looking forward to finalisation of that process. The HR delegations are derived from the Public Service Act. The delegations used were those of 2001 but were repealed by the delegations of 2016 – these came into effect on 1 August 2016. During the same period in 2016, IPID was the subject of a Constitutional Court judgement with regards to its independence. The judgement also identified gaps in the IPID Act hence the delay. The Public Service Act, with regards to IPID matters, should be finalised within 18 months. IPID is under the impression that once that process was finalised, it would be incorporated into the HR delegation because the Con Court made it clear that IPID must be structurally and operationally independent. The judgement also touched on the matter of the reporting line of IPID - this would be addressed by review of the Act. When the team realised the process would not be finalised within the set time, IPID agreed it would continue with revision of the delegation in line with the Act as it stands. Once the Act is reviewed, the delegation would be amended. Currently, the delegation has been work-shopped and the team checked all legal implications and the Minister indicated on Monday that he would look into the delegations. Without delegations, the decision making process and service delivery is affected. This matter would be addressed very soon - the team could not meet with the Minister today as hoped due to commitments he had to attend to in the North West.

The Chairperson said the Committee was satisfied with the experience and qualifications of the Acting Executive Director possessed. The Committee was confident that IPID was working independently. It is also important that IPID investigations are not compromised by third parties. The matter of the review of the Act would be undertaken by the Sixth Parliament. He called on the senior management and provincial heads to support the Acting Executive Director. If there are any concerns or interference, IPID must inform the Committee because if the Committee is not aware of certain matters, it would be difficult to intervene.

Briefing by TISA (Tobacco Institute of South Africa) on the illicit cigarette trade in South Africa
Mr Francois Van der Merwe, TISA Chairman and CEO, took the Members through the presentation commencing with a disclaimer: figures and statistics referred to in the presentation represent an industry view based on external research and publicly available market information. The definition of “illicit trade” for purposes of this document includes any cigarette product sold to consumers below R17.85. The various brands referred to herein are assumed to be manufactured and/or distributed by the corporate entities who publicly claim to do so. TISA accepts no responsibility or liability whatsoever with regard to the information or statistics quoted incorrectly or out of context from this presentation by any person.

TISA commissioned Ipsos, a globally-reputable research agency, to measure the number of cigarettes sold in SA below the Minimum Collectable Tax (MCT) of R17.85. Cigarettes selling below MCT can be deemed as illicit (see slide 9). Two market reads were done in 2018, in June and September. The results in this presentation refer to the September read and were published in November 2018. 

The findings of the research highlighted that:
-RG, an illicit brand from Gold Leaf Tobacco, showed as the biggest cigarette brand in SA, selling at average price of R10 a pack - 89% of RG sells below MCT
-Caesar from Best Tobacco identified as the second fastest growing brand in the market, it retails for R10 per pack
-November Ipsos results demonstrated that market share of the illicit industry has grown to 42% in the informal market, up from 33% only three months previously
-Illicit brands remain freely available in over 100 000 shops in the country
-Gene Ravele testified at the Nugent Commission that inspections at cigarette factories were deliberately stopped during the Moyane era

Mr Van der Merwe said SA is the first country in the world to allow an illicit brand of cigarette to become the biggest in the market. RG dominates the market by 25.8% with Peter Stuyvesant as a legal brand following at just 20.5%. Revenue loss based on annualised Ipsos Wave 2 data, the SA Revenue Service (SARS) will lose at least R8 billion in collectible taxes in the next 12 months. The employment risk involved reports that Tisa members buy more than 95% of the tobacco leaf produced in SA. 12 000 direct jobs are at imminent risk impacting more than 35 000 dependents.  

Ms Kohler Barnard asked who was behind Gold Leaf Tobacco and benefits from it. She asked whether she was correct in thinking that tobacco has taken over some transnational currency, grown frequently on the borders and used as a form of payment in exchange for drugs. Where does the money go to? Where do the illicit cigarettes crossing the borders go to? And where does the money go to? She asked this because transnational crimes are recognised by the United Nations as an instrument used globally to generate funds for armed groups, warlords, corrupt politicians and people who do not recognised borders. So who are we looking at? Surely Tisa has some clear ideas. There are so few arrests as we have seen with Rhino poachers, and not much is done to curb this behaviour – people are paid off from pursuing these acts of injustice. Why does Tisa think that there are such few arrest and almost zero convictions?

Mr Mbhele asked whether the Tisa was aware of the specific geographical footprint of the illicit tobacco value chain and specific provinces where this was concentrated. Is there a sense of how these cigarettes flows in certain provinces? Does Tisa believe that a greater localisation of policing powers would be beneficial for provinces to customise their resources and strategies to match the crime profiles and dynamics in their provinces? For instance, if the illicit of trade in Limpopo or North West was prominent in comparison to other provinces, police strategies and resources would be focused more on tackling that matter in those provinces. What is the timeline of the detected increase in illicit tobacco activity? It was mentioned in the presentation that during the Tom Moyane era, the inspections in tobacco factories stopped but surely the matter did not start then. If it started a number of years earlier then that speaks to the high level matter of diminishing margins of returns in sin tax in the tobacco industry. Part of the solution is a matter of tax reform instead of the law enforcement route.

Ms Molebatsi asked whether illicit cigarettes were safe for consumption.  Does SAPS have a unit that deals with illicit tobacco and if so, does it possess this specific skill?

The Chairperson said that perhaps the DPCI could deal with some of the questions.

Mr Ramatlakane said the presentation highlighted very serious problems and it needs serious attention. This matter actually required referral to well capacitated agencies. Something illegal is being done and he was wondering why nothing was being done about this. He was reluctant to ask further questions because Mr Van der Merwe may be unable to answer them due to his trade. Some of the manufacturing factories are less than 15 kilometres from the SARS head office. If this was the case, he was seriously wondering why action was not being taken. This was a matter that the Committee needed to have a discussion with DPCI about later in terms of what needs to be done and perhaps SARS should also be involved. This needs to be dealt with as soon as possible and did not have to wait for the Sixth Parliament. If there is illegal manufacture of something, either it complies or the factory close doors.

Mr E Buthelezi (IFP) said the Committee needs to do something about this because it undermines government’s efforts to reduce cigarette consumption and it is losing a lot of money in taxes. Informal traders seem to sell more of these illicit cigarettes compared to the legal ones.

Mr Van der Merwe responded that smoking would never go down because the availability of cheap cigarettes will never make people stop. This is not a matter of fair competition for the taxpaying industry and it is not possible to compete with those who do not pay taxes. It becomes a lose/lose situation with only the illegal traders winning. Government is losing R600 million per month and the legal industry is being diminished and killing jobs created by those companies.

No cigarette is better to consume but if people want to make the choice to smoke they should buy legal products because legal companies contribute towards the economy. In addition, legal companies manufacturing factories comply with strict government conditions, factory floors are spotless clean and safety measures are adhered to. If one defrauds the country on taxes, would one not take shortcuts in manufacturing regulations and standards?

The balance between taxation and illicit trade is very important. Tisa is pleased with the Minister increasing cigarette taxes but also feels strongly that the illicit cigarette trades must be dealt with. The increase in tax is benefiting illegal companies. The companies do not mind paying the taxes as long as everybody was paying taxes. Before the Minister’s budget speech, Tisa pleaded with the Minister to not increase taxes at least until the illicit trade of cigarettes is cleaned out. Unfortunately the Minister increased the taxes. The industry does not mind paying taxes as long as everybody was paying taxes.

National Treasury admitted for the first time last year that despite increases in sin tax, Treasury was seeing a decline in revenue from sin tax. The Minister also announced this to be the case. It has gotten to a point where increasing the sin tax was not benefiting SARS.

The illicit trade did not start in 2014, Tisa worked with SARS and SAPS at the time when the smuggling of cigarettes was big and 90% of illegal cigarettes in this country came from Zimbabwe.  SARS did a wonderful job and modernised the boarders and shut down the smuggling, but now the problem was that manufacturing was taken place in the country and shipped out of the country.

In 2014, project Honey Badger was announced by Mr Johann van Loggerenberg to tackle the illicit manufacture of cigarette - unfortunately that project was not implemented because Mr Moyane put an end to factory inspections and investigations deliberately. Then the illicit trade grew to such high levels that something needed to be done to inform government this was a big problem. Since the appointment of the new Commissioner, there is new energy at SARS regarding tackling illicit trade of cigarettes.  In his budget speech, Minister Tito Mboweni mentioned the tobacco industry which shows this was on top of government’s agenda. However, nobody is behind bars and no arrests have been made. We recently learned that SARS was now conducting inspections at manufacturing factories and that is indeed welcomed. Tisa has also offered every legal resource available to assist government.

The first crime is committed at the factory and that is where the tax must be collected instead of chasing street vendors off the streets because this is a secondary step. If taxes are not paid at the manufacturing level then it is pointless to chase informal traders off the streets. There is a legal precedent on SAPS raiding the market selling the illicit cigarettes – this is something that can be done at least until the legislation is completed. The target should be the wholesalers that sell these products knowing very well it is illegal.

Tisa has briefed the DPCI and SAPS and there is willingness to address the problem. Tisa has also worked with SARS and there is an understanding of the problem but there is a lack of coordination between the law enforcement agencies.

Mr Van der Merwe said tobacco money is easy money. He could not disclose who the owners are due to threats that have been made against his life. One of the owners of RG is however a Zimbabwean and the other is South African. He could not disclose the names for threats against his life.

DPCI Feedback on High Profile Cases
Lt. Gen. (Dr/Adv) Godfrey Lebeya, National DPCI Head, said that much of the information in the presentation was limited because some of the information was sensitive because some of the cases were not yet processed - investigations were ongoing and names of the people that have not yet been charged would not be mentioned.

The presentation looked at the current workforce profile of the DPCI, recent appointments, review of the personnel plan between the DPCI and SAPS Detective Services and progress with the establishment of the narcotics and firearm unit. Other matters addressed were the current capacity and proposed fixed establishment for the National Bureau for Illegal Firearms Control and Priority Violent Crime (NBIFCPVC) and progress with establishment of the SA Narcotics Enforcement Bureau (SANEB).

The briefing then addressed serious corruption investigations including: 
MTN (loss involved US$31.6 billion)
The case was reported on the 7 of November 2013 by Nicholas Gordon Alp, an attorney acting on behalf of MTN. On 15 May 2015 an enquiry was registered and converted into a case docket on 27 February 2017. The allegations investigated are that MTN allegedly irregularly won a tender to operate a Global System for Mobile (GSM) communications license in Iran following bribery of certain public officials of the Iranian government. The contract was awarded on 25 November 2005. The allegations are further that the former South African ambassador to Iran at the time used his influence and proximity to Iranian politicians to have the tender awarded to MTN instead of the winning bidder Turkcell. A warrant of arrest was issued and extradition process initiated. Search and seizure was executed on 1 June 2018 at MTN and their attorney’s offices.  An affidavit was received from the SAPS Digital Forensic Laboratory with regards to the mirror imaging of electronic information in terms of the search warrant on 21 February 2019.

Current Status
The retired former ambassador to Iran, Yusuf Saloojee (75) was arrested on 14 February 2019 and subsequently made a brief court appearance at the Johannesburg Specialised Commercial Crimes Court facing charges of corruption. The suspect has been a subject of the investigations, following allegations that he allegedly partook in deceitful corrupt activities with Iranian officials. He was allegedly involved facilitating the reversal or cancellation of a cell phone operating licence awarded to a Turkish mobile company, Turkcell, by the government of Iran which was later handed to MTN South Africa. The suspect allegedly pocketed R1.4million for his role. The money was deposited into an account of a firm of attorneys. The alleged payment was used towards the purchase of property in Pretoria. The court has granted the accused R4 000 bail and the matter has been postponed to 17 April 2019 for representations.

Schabir Shaik/Former President, JG Zuma/Thint Holding (1a) (loss involved R30.5 billion)
Current status: this will be the fifth appearance in court on this 16 year old docket. On 30 November 2018, Deputy Judge President, Justice M Madondo, made the following order as agreed by the state and accused: the state shall supply the accused (one and two) with the requested documents on 7 January 2019. Documents were made available to former President’s Zuma’s defence on 7 January 2019 as order by the court. Accused one shall supplement the founding papers by 7 February 2019. The state shall deliver its answering papers by 1 March 2019. The accused (one and two) shall deliver his replying papers by 1 April 2019. The accused (one and two) shall deliver their heads of argument by 18 April 2019 and the state shall deliver its heads of argument by 10 May 2019. Arguments regarding the permanent stay of prosecution application will be heard between 20 and 23 May 2019 in the Pietermaritzburg High Court.

Agridelight (loss involved R604 million)
Agridelight entered into an agreement with the North West Department of Rural Environment and Agricultural Development as an implementing agent for the Department. It is alleged the Department would pay money to Agridelight for no work done of which at times, the director of Agridelight would be directed by the officials to transfer monies into their accounts and/or those of their preferred companies. Thus far, the investigation has established the Department made payments of approximately R604 048 828.18 into the bank account held by Agridelight. It is alleged the said amount was then transferred to different companies or individuals and did not benefit the people of the North West. Some of the companies and their directors who received payments via Agridelight’s bank account did not have business relationships with Agridelight. The investigation is ongoing.

Other serious corruption case investigations highlighted in the presentation included the AgriBEE Fund, installation of water purification systems, state capture: Ekom and Tegeta/Trillian and McKinsey, Homix, Estina, Transnet, Eskom/Impulse International, Venda Building Society (VBS), Ronald Bobroff and Partners, BOSASA, Tannenbaum, Steinhoff, Eskom Pension Fund, Central Energy Fund, PRASA and Swifambo Rail Agency, pyramid scheme contravening the SA Reserve Bank Act, Pastor Timothy Omotoso, illegal trafficking of rhino horns, dismantling of clandestine laboratory and the Verulam Mosque attack.

Lt. Gen. Lebeya then looked at some of the success highlights including gangs sentenced to life imprisonment for racketeering, North West taxi hit man sentenced to life imprisonment, hefty sentence handed to a police murderer, five police killers receiving life sentences, four drug dealers buster in million Rand drug labs, R10 million drug bust at “quiet” home in Burchleigh North, 20 years imprisonment for R140 million drug trafficker, businessman sentenced for defrauding the Department of Cooperative Governance and Traditional Affairs of R7.5 million and R9 billion worth of gold bars forfeited for the state.

Lt. Gen. Lebeya responded to the illicit tobacco questions raised earlier to TISA about DPCI’s role in the matter. The unit that deals with this commodity relates to intellectual property crimes within serious commercial crimes – the component deals with various types of crime including illicit tobacco.
The team does not have a dedicated unit to this type of case. DPCI has engaged with the tobacco industry, SARS and other relevant stakeholders that play a role. The critical understanding is that the main crime contravened is against tax laws i.e. tax evasion. Therefore, close working relationships with SARS needs to be tightened up. The root causes need to be targeted not the informal traders that sell these commodities in the streets. He was assured the engagement with the role players was still ongoing, and that a solution would soon be devised but he could not divulge the details to the Committee yet.

The Chairperson welcomed the success and the progress. As for the appointment policy, DPCI is very strict in terms of requirements and vetting because a number of applicants have been disqualified. This was a correct approach adopted by the Directorate. As for the skill set, is DPCI making headway with commercial and financial crimes? What are the findings with the matter related to the job scope and work study i.e. that the Directorate actually needs about 900 members in each of the new units? If hopefully those consultations with labour are finalised in the next few months, what is the prospect these establishments would be funded in the next cycle? It is clear the DPCI has about 200 people in the specialised units which means about 700 more would be needed. Finances would be needed to do the job properly – so what are the timelines in terms of dealing with this matter?

Ms Mmola wanted to know when the National Bureau for Illegal Firearm Control and Priority Crime establishment will be finalised.

Mr Molebatsi asked for the factors in the increase in the personnel numbers in provinces. She wanted to know about the changes in the existing plans, particularly the National Drug Master Plan. What are the reasons for the 19 withdrawals at appointment level?

Mr Ramatlakane said that the presentation outlined the Hawks have been doing quite a lot of work and it must recognised and supported. He was hesitant to go into the cases that were still subject to many processes. He however wanted to know whether the tools of trade were satisfactory. On the specialised units and the 900 shortage, in previous engagements, DPCI mentioned utilisation of task teams but he had a problem with the task teams because the allocation of resources never quite happens. So how is the Hawks dealing with this matter? There are constraining measures to allocate sufficient resources. In previous discussions with DPCI and NDPP, there were indications that cooperation or working relationships were not necessarily satisfactory and it was illustrated by the report that came from the acting head at the time. It was agreed that another meeting would happen to look at the matters. Has the problem of lack of cooperation affected the DPCI achieving its timelines set on dealing with cases? This was brought up in the previous engagements as a serious matter.

Mr J Maake (ANC) thought it was clear the illegal cigarettes should surely undergo approval process of the SA Bureau of Standards (SABS). If a product is not approved by the SABS, is it allowed to be sold in the country?

Mr Mbhele asked for an explanation of factors that inform the broad allocation of personnel to provinces for firearms and priority violent crime units. The factor of the crime burden of a province in that particular crime category is used as a primary weighted factor – part of the approach may be ensuring a minimum baseline of equitable distribution of resources but when it comes to customising, how does the DPCI weight other factors like the crime burden and population?

Ms Kohler Barnard asked whether the DPCI had a timeline by which it believed it will be capacitated. From the series of investigation cases and corruption crimes, does the DPCI have an idea in terms of how much money or billions have been lost in total? Looking at the Schabir Schaik case alone, the total loss is an astounding R30.5 billion - is the Directorate clawing back or recouping some of the money that has been lost?

Mr Mhlongo said that matters relating to state capture are very broad to a point where they could stretch the DPCI units beyond its reach. Has the Directorate considered combining all the units together, such as the Special Investigating Unit (SIU), so that these broad criminal activities may be tackled? The DPCI alone would not be able to tackle these matters on its own. The Member wrote a letter to the head of the NPA in KZN asking whether he could be apprised of progress made regarding training of bogus Indian doctors who are proliferated in the public health system to kill our people. The instructions were made at NDPP level to prosecute these people but because they are paying the state organs, these cases become cold. These people come from the University of KZN, Walter Sisulu, University of Johannesburg and former Medusa. If these whips are not cracked, the country would be playing at the hands of these criminals. There are departments that dictate who the other departments must appoint.

The Chairperson asked what the approach would be regarding the Colonel commissioned to be at the Zondo Commission – is the General going to wait for the recommendation of the Judge or what is the plan going forward?

Lt. Gen. Lebeya said with regards to the profile and secondment of members, there is a list of members that the unit has lost to SAPS that were skilled in commercial crimes. That is what could have weakened the capacity of the DPCI. These are the members the unit is looking at.
As for funding of the structures that DPCI would like to put in place and whether it would be able to implement, it was indicated during a discussion with the budgetary process function that a fixed establishment is needed on which the DPCI can work. Maybe a budget process can then indicate how many posts can be filled on an annual basis. This will provide an idea of the type of structure needed in order to set aside the resources required to make it happen. If the unit is not filling on a permanent basis, at least secondment would suffice in the interim.

The intention is that on 1 April 2019, the DPCI would like to have the firearm structure approved and then begin the process of filling vacancies. Once the structure is set up, it will be easier to ascertain the necessary personnel needed and people with skills. On 1 April 2019, the intention is to start working on this implementation.

Whenever the Drug Master Plan is amended, there is always consultation because the plan incorporates various institutions and departments as well as society. The DPCI’s role is to focus on cutting the supply chain - this is main focus area of the DPCI.

On the withdrawal of the 19 posts, the DPCI found that in some areas, members were shortlisted in more than one post, for example, one in the Northern Cape and another in the North West. This would then constitute a process running concurrently in different provinces for one person. Therefore, in some of these posts the Directorate felt it made sense that some were withdrawn instead of unfair treatment so that people can have an opportunity to compete. In some cases, secretaries were found to have informed individuals later than others to prepare for interviews. So people would complain that they were informed late for the interview which worked against them in terms of preparations. When these anomalies were picked up, it was decided it is best to withdraw and the post can be readvertised.

The tools of the trade are not sufficient. The tools still need to be supplemented. Accommodation is part of the tools of the trade that DPCI needs. This also includes the head office which is not great considering the mandate of the DPCI. DPCI units are scattered across the city due to a lack of capacity in head office. As for matters of vehicle resources, there is a budget but what is available never closes the gap. Last month, eight of the vehicles were damaged by water in the North West because of the structure of the building causing the basement housing the vehicles to flood - the vehicles were floating on the water. The extent of the damage is still being assessed.

The Task Teams are external members called in on a temporary basis and the resources are shared. Most of the members in the task teams are from within the DPCI but tasked with looking into specific tasks and specialise in a particular commodity. Once that task team has completed its task, those members still remained within the DPCI.

The working relationship between the NDPP and DPCI is the new appointment was made on 1 February 2019. Directorate and NDPP work together in the corruption task team and operational committee. There are joint assessments where the two sit together to tackle certain matters. Lt. Gen. Lebeya started a process of putting together certain matters that would need the attention of the NDPP. The gap that existed was being bridged. The working relationship will continue in that fashion.

As for the SABS approval question, the DPCI has not gone to the SABS but was certain approval must come from the SABS for that specific commodity – this would be looked into.  

With regards to the end date of the establishment, the Directorate would like to have this put in place by 1 April 2019 i.e. the beginning of the next financial year.  

As for recouping the funds from the corruption or high profile cases, the Directorate does not work alone with regard to recouping the proceeds or losses of the crimes. Most of the recouping of the proceeds is civil in nature and the Directorate assists in the investigations which would be used to assist in civil matters. He did not have a specific figure of how much has been recouped yet but all that money is either deposited into the CARA Account or paid back to the victims.

He stated that with regards to the new unit pronounced by the President, in his office, Lt. Gen, Lebeya assigned his deputy to work closely with the NDPP and further assigned officials to assist to put the unit into effect. He could not divulge deeper into this matter as the President would yet promulgate the functions of that unit. He assured the Committee that the DPCI would cooperate and play its role in that space as required. This unit would also deal with the Single Police Service.

Operationally, the DPCI is not working alone but with other role-players such as the SIU. Most of the investigations the SIU undertakes end up in the Directorate. There is a close working relationship with other relevant role-players as well.

As for the bogus doctors, Lt. Gen. Lebeya could not detail the specifics but the matter was being dealt with internally. He listened to the two sides of the story and assigned the matter to another function or investigator. After the matter was withdrawn in court, he decided to place it back within the Directorate for more in-depth investigation.

As for members assigned in the State Capture Inquiry Commission, whenever there is information that would be needed to assist in criminality, the Directorate would be able to assist in that regard.

Ms Mmola asked a follow up question regarding the damaged cars and whether that did not affect the work of the Directorate.

Mr Mhlongo sought clarity regarding the Indian Nationals - is the matter now being dealt with at national level or not? Those people have been having their way in KZN for far too long and that matter needs to be dealt with once and for all.

Lt. Gen. Lebeya responded that the seven vehicles destroyed by water damage were being assessed to ascertain the reparability. In the interim, the units share resources until the process is concluded.

The investigation is done in the province but in a different unit as previously done. It is also being overseen by Lt. Gen. Lebeya on a national level. The office of Lt. Gen. Lebeya would be tasked with checking the content of the Report. There are guidelines in the docket that needs to be executed but unfortunately that did not happen at some stage but the gap is now being closed.  

The Chairperson thanked the General and his team noting this was a final engagement between the Committee and the Directorate in the Fifth Parliament. He wished the Directorate best of luck. Hopefully the Sixth Parliament would deal with the financial resources of the Directorate as a top priority.

Lt. General Lebeya thanked the Chairperson and the Members for the support that was provided through the years.

The meeting was adjourned.


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