COMMISSION OF INQUIRY INTO STATE CAPTURE
HELD AT
PARKTOWN, JOHANNESBURG

10

21 NOVEMBER 2018

DAY 27

20

21 NOVEMBER 2018 – DAY 27
PROCEEDINGS HELD ON 21 NOVEMBER 2018
CHAIRPERSON: Good morning Mr Pretorius, good morning everybody. Good morning
Minister.
MINISTER PRAVIN GORDHAN: Good morning Chair.
CHAIRPERSON: Yes Mr Pretorius.
ADV PAUL PRETORIUS SC: Thank you. Morning Mr Gordhan.
MINISTER PRAVIN GORDHAN: Good morning sir.
ADV PAUL PRETORIUS SC: The next topic you deal with in your statement is the issue
of the closure of the Gupta bank accounts, which is an issue covered directly by the
Commission's terms of reference. You deal with that at paragraph 138 of your statement
and you deal in particular with your personal participation in the issues surrounding the
closure of the banks accounts, or the bank accounts.
Would you deal with then what happened in April 2016 when Oakbay
Investments announced that its bank accounts had been closed?
MINISTER PRAVIN GORDHAN: Thank you Chair and good morning again. In essence
there are three issues in this section. The first was a verse in relation to the pressure
both from Oakbay Investments in the form of Nazeem Howa and repeated letters and I
think we had two meetings with him, to try to explain to him in a gentle way that we could
– we will not and we cannot intervene in this matter of the bank accounts. Similar
pressure coming from within our ranks in Government. So the essence of that would be
that neither I nor any Treasury official would meet the banks, so to speak, or intervene in
this matter.
The second Chairperson is that the so-called subcommittee which Mr Zwane
chaired, which I will refer to in a moment and other comments that were being made both
inside and outside of Cabinet, required that on the basis of legal advice that I had that

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we do something illegal, i.e. tell the banks to act otherwise and we refuse to do that.
When we could not get sufficient understanding of the legal position, we decided
to approach the Court to get the clarity on this particular matter. Although it came a bit
late.
So in paragraph 138 we describe the interactions with Mr Howa and the
explanations that we have offered him on the matter of intervening in this particular case.
138.2 is ...[intervenes]
ADV PAUL PRETORIUS SC: Sorry if I could interrupt you there Minister. Prior to
meeting with the representatives of Oakbay, did you consider the legal position and take
legal advice?
MINISTER PRAVIN GORDHAN: Well we had our own internal legal advice in the first
instance that we cannot intervene and our own understanding of the Bank's Act and the
way in which we would be required to interact with the bank, or banks in this particular
regard. Then we obtained external opinions as well.
ADV PAUL PRETORIUS SC: Did you meet with representatives of Oakbay, as you
describe in paragraph 138.2?
MINISTER PRAVIN GORDHAN: Yes. As I indicated there was both correspondence
and one or maybe two meetings to explain to them that we will not intervene, we cannot
intervene. In addition, we actually said that they should go to Court. If they feel they
have a case, go to Court. If I am right, I recollect a letter from them Chair which said,
they do not think they have a good prospect in Court, which is quite an admission on their
part. So that is the essence of 138.2.
ADV PAUL PRETORIUS SC: Then in paragraph 138 you deal with the Ministerial Task
Team and you contrast that with an Inter-Ministerial Committee. Would you explain the
difference please?

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MINISTER PRAVIN GORDHAN: The one has a longer life span, that is the IMC, the
Inter-Ministerial Committee. As I explained earlier, it also involves different interested
parties who have different aspects to contribute to a common subject, or objective that
has been defined. Whereas the Task Team was an ad hoc structure, created on the spur
of the moment to deal with the question of intervention in this matter.
CHAIRPERSON: Just to take you back to paragraph 138.2. Are you quite clear in your
own mind that what you were being requested by these entities was effectively to
intervene and stop the banks from what they were doing, in terms of closing their
accounts?
MINISTER PRAVIN GORDHAN: Yes.
CHAIRPERSON: In other words, there can be no doubt that that was the request?
MINISTER PRAVIN GORDHAN: Yes very explicitly.
CHAIRPERSON: Thank you.
ADV PAUL PRETORIUS SC: Would you relate to the Commission please your
interactions or otherwise with the Task Team as you describe in paragraph 140 of your
statement?
MINISTER PRAVIN GORDHAN: Well as I said, the Task Team was established on the
13th April, I was again not at that meeting. I think I was at the IMF meetings in Washington
at the time. The members that were initially assigned to that Task Team was Mr Zwane,
Ms Oliphant and myself. As I indicated in 140, later the Minister of Communications was
added and at a subsequent occasion when I saw some of the minutes or notes of a
discussion that they had, or a meeting that they had, for some reason SARS and many
others were invited to that meeting as well. I do not actually have access to tha t right
now.
So, in my view this was a political crowding in of likeminded people who would

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share a common view and who would act contrary to the legal advice that we had. I
would get very short notice of one or two meetings and I would refuse to accept that.
Firstly because, the structure began to call itself an IMC and I asked the Cabinet
Secretary whether in fact this was an IMC and he concurred that it was not. Secondly,
who chaired this structure. Mr Zwane appeared to declare himself the Chair. So we had
a subsequent Cabinet meeting. The President indicated that, well he is the Chair. So
that was the case. But I did not attend any of its meetings. Understanding politically
where it was coming from, what its object was and I refused to be part of that process.
ADV PAUL PRETORIUS SC: The invitation from the Minister of Mineral Resources
Mr Zwane to participate in the affairs of that Committee, appears at page 711 of
Bundle N1 "B". Page 711 Chair.
CHAIRPERSON: Yes.
ADV PAUL PRETORIUS SC: In that letter dated the 20 th April 2016, Minister Zwane
says:
"I refer to the decision taken by Cabinet on Wednesday
16 April 2016 to appoint an Inter-Ministerial Committee, to consider
the impact of certain allegedly unilateral actions taken by specific
financial institutions against certain of its clients, which actions may
have the potential to negatively affect the economy of the Republic
of South Africa with particular focus to be given to the impact of
these actions on the already distressed mining and financial
services sectors."
Is that as you understand the mandate of that Committee?
MINISTER PRAVIN GORDHAN: Well that is the mandate that is included in this letter.
ADV PAUL PRETORIUS SC: Your response to Minister Zwane appears at page 714 of

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the same bundle, where you make the point amongst others that no Inter-Ministerial
Committee was established and that no one Minister was designated as convener.
You also take issues with other contents of Minister Zwane's letter. Do you have
any comment to clarify your response?
MINISTER PRAVIN GORDHAN: Well this is a written proof of what I have just said
Chairperson in respect of the structure, its standing, its Chairpersonship and the fact that
we were obtaining legal advice.
CHAIRPERSON: I ...[intervenes]
ADV PAUL PRETORIUS SC: In paragraph 142 ...[intervenes]
CHAIRPERSON: I am sorry Mr Pretorius. I may have missed something earlier on which
I would like to have clarification on now. I think at some stage either today or in the past
two days you may have sought to make a distinction between an Inter-Ministerial
Committee and I think some other structure. If there is, please would you just repeat that
distinction and I just want to understand whether it is of any significance here?
MINISTER PRAVIN GORDHAN: I am not about the significance. But as I said earlier
Chair the IMC and there are many of them. I think recently the Presidency was taking
stock of which ones are still needed and which are not.
So by its nature – for example you will have an IMC on mining towns, it is chaired
by Minister Radebe and this is post the Marikana situation to actually ensure that housing
and other facilities are actually provided in mining towns.

But also look at the

rehabilitation of mines and in particular if you like Developer Social Plan for those
communities that are affected in those areas.
Now clearly a structure like that would require the Human Settlements
Department, Water & Sanitation Department, the Local Government or COGTA
Department and so on, to become involved. So you can see there are many departments,

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one objective and they all contribute to the objective and the programme that emerges
from that.
The Task Team is in this case saying, intervene in this particular event, i.e. the
closure of accounts.
CHAIRPERSON: So an Inter-Ministerial Committee could it be compared, for example
if one talks about Parliament to a standing Committee, for example as opposed to an
ad hoc Committee or maybe not ...[intervenes]
MINISTER PRAVIN GORDHAN: Not quite.

A standing Committee has a level of

permanence. An Inter-Ministerial Committee could finish its work in a year.
CHAIRPERSON: Oh okay.
MINISTER PRAVIN GORDHAN: Then we shut down.
CHAIRPERSON: Okay. But it might be longer than ...[intervenes]
MINISTER PRAVIN GORDHAN: It is on more medium terms.
CHAIRPERSON: It might be longer than a Ministerial Task Team?
MINISTER PRAVIN GORDHAN: That is right yes.
CHAIRPERSON: Okay thank you. So it is not as literal as one might think?
MINISTER PRAVIN GORDHAN: No.
CHAIRPERSON: To say, Inter-Ministerial means it is a committee of a number of
Ministers.
MINISTER PRAVIN GORDHAN: Yes.
CHAIRPERSON: Okay.
ADV PAUL PRETORIUS SC: Thank you Chair.

Minister Gordhan in any event, in

paragraph 141 your evidence as I understand it, is that you chose not to attend meetings
of the Task Team, or of the Committee because of your view which you have already
expressed to the Chair?

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MINISTER PRAVIN GORDHAN: Yes.
CHAIRPERSON: Can I also ask, I think you make the point in your letter to Mr Zwane
that no person had been designated as Chairperson.

I do recall and I am sure

Mr Pretorius will deal with this in due course at a later stage. There seem to be some
repudiation of either the statement or the committee by the then President. So maybe
one must come back and simply say, as a matter of fact, was a committee established
by Cabinet to do more or less what Mr Zwane was talking about in his letter?
MINISTER PRAVIN GORDHAN: Yes a committee was established at the meeting of the
13th April. No Chairperson was declared explicitly. At the following Cabinet meeting he
was nominated by the President at the Chairperson.
CHAIRPERSON: Oh okay thank you.
MINISTER PRAVIN GORDHAN: But in-between the two meetings he assumed the
Chair.
CHAIRPERSON: Ja okay thank you.
ADV PAUL PRETORIUS SC: The issue you are referring to Chair may relate to the
outcome of the meeting and whether the President repudiated, or accepted the outcome
of that meeting to which Minister Gordhan is referring. But we come to that now.
You say in paragraph 142 Minister Gordhan and I am not going to ask you
questions about that paragraph, relating to events in Cabinet. Those proceedings in
Cabinet have not been obtained and declassified by our investigators. But that is work
still to be done. We will do so and raise issues relating thereto when appropriate.
If you could deal then with the matter raised in paragraph 143 and that is the
media statement issued by Mr Zwane or Minister Zwane on the 1 st September 2016.
MINISTER PRAVIN GORDHAN: Ja if I may just elaborate on what you said Mr Pretorius
and Chairperson. What the significance on 142 is that Mr Zwane had just produced two

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or three reports from the Task Team allegedly. It is advisable for the Commission to get
hold of those, just to give you a view of what happened.
Now it is on the basis of those meetings or interactions that were held – and of
course the banks themselves can also inform the Commission about the nature of their
interactions as well.
But at 143 what we are talking about is that – because the unilateral statement
made by Mr Zwane in which he says all sorts of things, including rebuking the banks for
telling Government, as this article says, "How to Run the Country" and variou s other
factors as well. His statement is then repudiated by Cabinet as being not a true reflection
of what Cabinet's views are. I believe that is at 179, yes.
CHAIRPERSON: So the repudiation was not just by the former President, it was by the
Cabinet? I am just asking.
MINISTER PRAVIN GORDHAN: Ja, no it is the Presidency, I beg your pardon.
CHAIRPERSON: I am just asking because from the media at the time I seem to
remember or the impression was, was that it was the President.
ADV PAUL PRETORIUS SC: Well, may I refer to two reports that apparently clarify the
situation?
CHAIRPERSON: That is fine.
ADV PAUL PRETORIUS SC: Minister Gordhan would you go to page 171 of
Bundle N1 "B"? There is a report there of Minister Zwane's statement made at a meeting
of the National Union of Mine Workers during June 2016 where he has reported as
rebuking the banks for telling the Government how to run the country. A statement to
which you have just referred.
MINISTER PRAVIN GORDHAN: Yes.
ADV PAUL PRETORIUS SC: At the bottom of that report on page 717 is a reported

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statement by the ANC Secretary General at the time Mr Mantashe, who urged the
Government not to meddle in relationship between Guptas and their banks saying that
the State must allow them to sort out their differences. The article points out the
differences of opinion within the governing party.
But the statement to which I think the Chair may be referring appears at
page 719 which says under the photograph of Minister Zwane:
"The Presidency on Friday distanced itself from a statement made by
Mineral Resources Minister Mosebenzi Zwane that the Cabinet had
resolved to a request that a judicial inquiry be established into the
banks and their actions against the Guptas, as well as to review the
legislation that governs the banking system."
Is that the record of statements as you recall it?
MINISTER PRAVIN GORDHAN: Yes. I think what 719 reveals Chair is, the shear
recklessness of the kind of statements that are made as in 717. If you look at the last
paragraph of 719, then after the recklessness has occurred, then suddenly we realise we
have investors, we have a banking system that we need to secure and then we will offer
reassurances that everything is fine.
ADV PAUL PRETORIUS SC: That reassurances given in the last paragraph on
page 719?
MINISTER PRAVIN GORDHAN: That is right.
CHAIRPERSON: I see in one of the paragraphs in the body of the statement that there
is the then Presidential State, a spokesperson Mr Bongani Xhlonga it is quoted as having
said – I just speaking about Minister Zwane, he does not speak on behalf of Cabinet and
the contents of his statement do not reflect the position of use of the Cabinet, the
Presidency or Government.

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So that might indicate that not only the President, but also the Cabinet distanced
itself from his statement. Would that be your understanding?
MINISTER PRAVIN GORDHAN: Because it was not a true reflection.
CHAIRPERSON: Oh it was not a true reflection of Cabinet's position?
MINISTER PRAVIN GORDHAN: Whatever is ...[intervenes]
CHAIRPERSON: Ja they might not have done something to distance themself.
MINISTER PRAVIN GORDHAN: Yes.
CHAIRPERSON: But what it was saying was that Mr Zwane's statement did not reflect
the true position of Cabinet and President and Government on the issue?
MINISTER PRAVIN GORDHAN: That is right.
CHAIRPERSON: Thank you.
ADV PAUL PRETORIUS SC: The outcome of that as I understand it Minister Gordhan
was that a dispute arose subsequently as to whether the statement of Minister Zwane
was made in his personal capacity or not and that was the subject of a Parliamentary
question which appears at page 725 of the bundle. Would you place that on record
please and the reply which is on the following page 726?
MINISTER PRAVIN GORDHAN: This is a Parliamentary question to the President from
Mr Manyi of the DA and the response to that question was the following:
"I had indicated in my previous reply that the statement issued by the
Minister of Mineral Resources, Mr Zwane on 1 September 2016 on the
work of the Task Team established to consider the implications of the
decisions of certain banks and audit firms to close down their accounts
and withdraw audit services from the company and Oakbay
Investments, was issued in his personal capacity and not on behalf of
the Task Team or Cabinet. I am not in the position to answer why

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Mr Zwane in his reply on 22 September 2016, said that he was not
speaking in his personal capacity. The question in this regard must
directed to the Minister. I reprimanded the Minister for the statement."
ADV PAUL PRETORIUS SC: Then in paragraph 144 you refer to the Court application
launched by yourself for declaratory relief regarding what powers you might or might not
have had to intervene in decisions taken by commercial banks. That application appears
at page 728 and following and is responsible for a large volume of paper on your bench
Chair. It is not necessary for us to go into any detail on that application for the reason
that it has been thoroughly dealt with in evidence before this Commission already. But I
invite you to raise any issue in relation to the application that you wish to.
MINISTER PRAVIN GORDHAN: Just to record Chair that there was the application, as
I indicated earlier that in 144.2, I indicate that the Financial Intelligence Centre, as I have
pointed out yesterday, indicated as part of the application that 72 suspicious transaction
reports had been provided, or had – they had been provided those reports from various
banks, relating to suspicious account activity and transactions conducted, using the bank
accounts that have been closed. That this matter then goes on, as I say 144.2:
"This was the first public acknowledgment of suspicions regarding the
business affairs of the Gupta entities, since the Public Protector State
of Capture of what was only released to the public on
2 November 2016."
ADV PAUL PRETORIUS SC: Those reports for the record Minister appear in the
Bundle N1 "B" at page 830 to 833. They are listed in full there. We need not go there,
but they may be the subject to further investigation and evidence before the Commission.
MINISTER PRAVIN GORDHAN: We will come back to this application in a different way
under the section on my dismissal. Because on the Tuesday of that week was the hearing

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in relation to this application in the North Gauteng High Court. Then the Monday is when
were instructed to come back immediately. But we will come back to that.
ADV PAUL PRETORIUS SC: Then you make a submission to the Commission in
paragraph 145. I have certain questions I would like to ask, if I may, in relation to the
suggestion that the Commission should follow the money. Would you place that on record
please?
MINISTER PRAVIN GORDHAN: Yes, follow the money, apart from paying back the
money is a popular rethought when one speaks to, particularly Forensic Experts. If you
ask, what kind of malfeasance took place and where did the money go and how do you
catch the culprits, he says, "follow the money".
So let me read into the record 145 Chair:
"I submit to the Commission that it should follow the money and request the full account
of all transactions by any Gupta related company and related individuals that has gone
through bank accounts. By doing so, it will be better placed to determine which activities
were related to criminality and malfeasance. This will assist the State and Enterprises
and taxpayers to recover funds lost in this process as well."
ADV PAUL PRETORIUS SC: Dealing briefly with the recovery of funds, we know
Minister that there are two categories of our law which can be utilised to recover funds
lost through malfeasance. The first is the criminal system, justice system. There will be
evidence before the Commission in relation to the criminal justice system and its duty to
recover funds and what has been done in that regard.
My question relates to civil recovery of funds.

Would you inform the

Commission please in your present position as Minister of Public Enterprises whether
civil methods are being considered will be used in relation to State Owned Entities loss
of finances?

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MINISTER PRAVIN GORDHAN: Certain Chair, the Boards of the various SOEs, as I
said earlier, looking into the forensic reports that are currently available, or those that
they have initiated. Secondly, there is one example of the Transnet Board claiming, I
think R166 million from the former CEO for money paid to, I think it regiments for work
basically not done at that particular point in time. So there will be those sort of
procedures.
There are also huge opportunities available to us through the Financial
Intelligence Centre Network across the globe and tax authorities also have similar reach
in different jurisdictions depending on the kind of double taxation treaties and so on that
they have. And mutual assistance agreements that they have in place as well.
But if I may recommend, the one avenue that needs to be exercised a lot more,
even now in relation to any malfeasance that is in the public domain, is the Asset
Forfeiture process. So I think there is – there are a number of opportunities for the State
to ensure that those who engage in these sorts of activities feel the first signs of pain by
freezing their assets, which might include 5 Lamborghinis or 10 Ferraris or whatever the
case might be, and that will then send the right message that maleficence is not to be
tolerated.
ADV PAUL PRETORIUS SC: Just for the reassurance of the public Minister, is there
a coordinated campaign whether at ministerial departmental level or at an SOE level,
to investigate all civil means of recovery and to act on all investigations in that regard?
MINISTER PRAVIN GORDHAN: I indicated, I think on the first day of my testimony
that the department is currently going through that process of bringing together
information, including all the forensic reports available across the SOEs we are
responsible for, so that we get some kind of overview of what is going on.
ADV PAUL PRETORIUS SC: And certainly that will form part of the activities of the

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Commission going forward. Would you then please deal with the nuclear deal in this
latter period of your office as Minister of Finance?
MINISTER PRAVIN GORDHAN: Chair the best way to deal with this, if I may submit,
is to look at a declassified memo and minutes of the – I think we have minutes here, I
am just going to check, or I think it might be in the file, on this particular matter that
went before Cabinet. And so I think these are – ja these are the minutes. So at 712
of a meeting on 9 December 2015, the day on which Minister Nene was dismissed, it
reads as follows.
ADV PAUL PRETORIUS SC: I am sorry Minister before you go on, may I ask what
page are you referring to?
MINISTER PRAVIN GORDHAN: No I just pulled this out, it is numbered 445 but I am
not sure which or your bundles.
ADV PAUL PRETORIUS SC: May I ask you, just for the sake of order to look at page
39 of the supplementary bundle.
MINISTER PRAVIN GORDHAN: Thank you, that is helpful.
ADV PAUL PRETORIUS SC: Yes, would you ...[intervenes].
MINISTER PRAVIN GORDHAN: So I will just read that.
ADV PAUL PRETORIUS SC: This document has been declassified.
CHAIRPERSON: Yes.
MINISTER PRAVIN GORDHAN: So at 712 Chairperson, of that page:
"The Cabinet (a) requested that the last sentence in the first
paragraph under paragraph 9 be deleted.
That is with reference to the Cabinet memorandum:
"(b) Approved that the department of energy issue the request for
proposal or RFP for a nuclear new build programme of 9 600

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megawatts of nuclear power.
(c)

Approved that the final funding model be informed by the

response of the market to the RFP and thereafter be submitted to
Cabinet for final consideration; and
(d) Requested that where relevant the exchange rates referred to in
the memorandum be adjusted to current values."
So you will recall that I made this point elaborately, I think sometime yesterday or the
day before, that if exchange rates are wrongly quoted it then affects the whole cost
structure and the final result that you obtain about the cost of a project. So clearly
there was a misestimate or the wrong number was put in for whatever reason, to arrive
at the costs. And what we learnt from here Chair is that whilst there was an approval
for the RFP the funding model had still to be defined and determined.
ADV PAUL PRETORIUS SC: For those not familiar with the tender process Minister,
the RFP would stand for request for proposals, which is an initiation of the acquisition
and procurement process.
MINISTER PRAVIN GORDHAN: Process yes.
ADV PAUL PRETORIUS SC: May I ask just for clarification Minister, the status of the
nuclear build programme prior to this in relation to Cabinet approval, what was it? Had
Cabinet approved the programme prior to this date in any form or other or was it a
matter of investigation and consideration? What was the position?
MINISTER PRAVIN GORDHAN: I think, again I am not sure what is classified and
what is not so I suggest Chair, that you approach the Cabinet secretary to inform you
of that.
CHAIRPERSON: Yes, I think just feel free where you are not sure, to indicate that you
are not sure, you may be giving information that has not been declassified and then

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give, and then indicate only that which are comfortable is not – will not breach any
secrecy of Cabinet ja.
MINISTER PRAVIN GORDHAN: Sure.
ADV PAUL PRETORIUS SC: We could go back Chair, to the evidence of Mr Nene,
which dealt in some detail with the interactions between the Department of Energy on
the one hand and Treasury on the other, at a level below Cabinet, but that evidence is
there. May I just put one more question then to you Minister Gordhan, in relation to
the nature of the approval here, there has been evidence that as at this stage Treasury
had not yet considered or advised on a final funding model for the nuclear build
programme am I correct?
MINISTER PRAVIN GORDHAN: Yes you are and it is reflected in some ways in
paragraph 147, that the Chief Procurement Officer was still seeking legal opinions, and
four lines down it says that:
"It requires that State institutions procure goods or services using a
system that is fair, equitable, transparent, competitive and cost
effective."
And that is what results in the RFP being the instrument through which we actually
work. And the latter part of this section says:
"Moreover the RFP documentation that had been prepared had many
flaws and gaps, identified not only by the National Treasury officials
but also in reports produced by advisors working on behalf of the
Department of Energy."
And the department of energy Chair, would be in the best position to provide you with
those documents and the work that that the advisors had done for them.
CHAIRPERSON: So this approval by Cabinet as reflected in these minutes, was it an

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approval that occurred before the full course of the project was known to Cabinet or
the full course were known already, it was just the funding model that was still to be
determined?
MINISTER PRAVIN GORDHAN: I think Chair, the Minister Nene would probably have
indicated to you that there were two sets of calculations if you like, and all of them
would be estimates; one from the Treasury, one from the Department of Energy. What
an RFP does, and which is what the resolution suggests as well, once you ask the
marketplace, if you say I require X then, and there are five or ten different providers
that are interested in providing you with X, they will also provide you with the costs
and how they arrive at those costs as well. It then gives you a basis for comparison
on the one hand but also an indication of what the market is saying about the cost of
the commodity that you actually want to acquire. So the RFP or RFI sometimes is
used to test the market to see what is it that is actually available, who are the vendors
that are available and what could be the cost consequences. That is why I think the
resolution says the funding model. So if the funding is let us say 200 billion instead of
a trillion Rand then the funding model will take a different shape and direction. If it is
two trillion Rand instead of one trillion Rand then equally it will take a different direction
as well. So testing the market is an important part.
Of course in this process what is often hidden is what is the specifications
that you are putting out in the RFP. You cannot just say I want to buy X without defining
what is X. So am I buying a six cylinder car or a four cylinder car or an old car or a
new car or whatever the case might be. So you have got to define what is it that you
want and what are, if you like the additional conveniences that you might want in your
car as well, and specific them in explicit terms. So then you can compare apple for
apple.

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Now in tender malfeasance what you often have, well you sometimes have,
are instances where the provider actually influences the specs or specifications. So
you influence me as an official to put in these specifications, I do so, and then you bid
because you have had full knowledge of the specifications that are going to be required
or you might be one of the few people, your company might be one of the few that
actually have the capability to provide a particular kind of specification that is indicated
in the RFP itself.
So you might get a procurement expert at some stage to come in, go through
the whole value chain and explain how malfeasance can intervene in the course of that
value chain.
CHAIRPERSON: So would it be – it probably would be right to say although this was
approval it was whether this says so expressly or not but it was subject to certain things
happening?
MINISTER PRAVIN GORDHAN: Yes.
CHAIRPERSON: Ja okay.
ADV PAUL PRETORIUS SC: So in summary then Minister, is it fair to say that as at
the date of this Cabinet resolution on 9 December 2018 the market had not yet been
tested, would be tested through the issuing of a request for proposals and responses
thereto, and once that had been done the funding model would be developed to meet
that information?
MINISTER PRAVIN GORDHAN: That is right.
ADV PAUL PRETORIUS SC: Then in paragraph 148 and following you deal with the
relationship between Eskom as a State owned entity on the one hand and the nuclear
project on the other. Would you detail that please for the Commission?
MINISTER PRAVIN GORDHAN: If I may cover 148, 149 and the rest of the

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paragraphs in this section very quickly for you, given the time constraints that we have,
in 148 and 149 what is made reference to is that at an earlier stage, I think Eskom was
designated as the owner of this nuclear project, and once you speak to the Cabinet
Secretariat you might be able to get more clarity on that.
I think what 148 is indicating is that Eskom was now involved in the new build
projects of Medupi, Kusile and Ngula, and it would have funding constraints, although
the PR at that time from Mr Molefe, the then CEO varied on this particular question
and what 148 and 149 is then saying is that since Eskom has funding constraints and
will not be able to provide funding the Cabinet should approve that NECSA, the South
African National Energy Corporation should replace Eskom as the implementing agent.
And by implementing, it is more than just implementing agent because it will also be,
if you like, the owner and operator of the power stations that emerge from this particular
process.
I think 149 just gives you some indications of the financial difficulties that
Eskom found itself in at that point in time, and Eskom itself was the subject of capture
during this particular period as well, and we will come back to that in a moment.
At 150 we indicate, and 151, that there were a number of civil society
organisations that then launched legal proceedings against the Minister of Energy, the
President and Eskom among others, and that as indicated in 151 finally the Cape High
Court ruled that the nuclear cooperation agreements with the USA, Russia, South
Korea were unconstitutional and unlawful and that the ministerial determination for a
9.6 gigawatt nuclear new build for South Africa was invalid. So this saga or stage of
the nuclear issue ends with that court action.
ADV PAUL PRETORIUS SC: That order is at page 2700 of Bundle N1F Chair. We
need not go there. It is quite detailed and technical application and for the sake o f

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time it will probably be dealt with in due course. But in fairness both to Mr Molefe and
yourself Minister, may I ask you to turn to page 2626 of Bundle N1F, which is the last
bundle, N1F.
CHAIRPERSON: What is the page number?
ADV PAUL PRETORIUS SC: 2626.
CHAIRPERSON: Yes.
ADV PAUL PRETORIUS SC: In that article published by Engineering News,
Mr Molefe sets out a different view about funding for the nuclear build programme and
says, perhaps I am not doing justice to the proposition by attempting to s ummarise it
because it is obviously quite technical, but says that the nuclear build programme could
be self-financing and in fact would repay its cost in 15 to 20 years even if it did cost
one trillion Rand, and pointing out that a nuclear plant has a lif e of 80 years. Do you
have any comment in that regard?
MINISTER PRAVIN GORDHAN: Well Mr Molefe has scales that he has learnt at the
Treasury, where he was nurtured, as I said, by Ms Ramos and Mr Manuel for many
years in this particular area of financing. So clearly he had something on his mind. It
is not explicit here save to say that the fiscus does not have to be the funder. But the
fiscus could be called on as a guarantor, not the funder. So without the detail it is hard
to comment on this matter any further.
ADV PAUL PRETORIUS SC: So it is a technical matter it seems. Then if you would
go to the issue raised by Mr Maseko in evidence before the Commission, in relation to
the memorandum signed by himself and other former Directors General, and
addressed to the President, the Deputy President, other Cabinet members and
yourself, he gave evidence, which is a matter of record, that the memorandum was
presented to yourself and that there was very little response I think, in summary, from

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anyone there save the ANC's own initiative; if you could just deal with that please.
MINISTER PRAVIN GORDHAN: Well this was a context when there was heightened
concern both about corruption but also about diminishing the capacity of State
institutions and the public service more generally. In that context former Directors
General decided to meet and to establish whether having shared this concern they
would like to express it in in some way. That resulted in this document called the
memorandum that Mr Maseko referred to, and it was in a context where there was a
lot of activism from civil society organisations on this and other related matters as well.
I did respond to Mr Maseko's plea if you like, but also the fact that the memorandum
had been delivered to me, by having a chat on the phone but on the understanding
that that kind of activism needs to keep itself going, and it did not actually in the
ultimate instance, but it is an important part of civil society, and importantly senior
former civil servants being part of the process of alerting the public to what was going
on in the State at that time.
So I do not think there was any other expectation from our side because we
were all, if you like part of the struggle against the kind of undermining of public service
institutions that was happening at the time.
ADV PAUL PRETORIUS SC: Was there any discussion in relation to any possible
response between the recipients of the memorandum?
MINISTER PRAVIN GORDHAN: Not that I am aware of, no.
ADV PAUL PRETORIUS SC: Did you discuss it with the President or with the Deputy
President?
MINISTER PRAVIN GORDHAN: No.
ADV PAUL PRETORIUS SC: I understand though that following this memorandum
the governing party established its own initiative to deal with State capture, what

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happened to that?
MINISTER PRAVIN GORDHAN: Well I think the governing party appears before you
next week and they are in the best position to answer but it did not receive much of a
response. I believe Mr Maseko did respond but there many others who considered
responding but did not, and they were probably waiting for processes like yours Chair,
where they could make their case known. And of course a reliable integrity committee
would then be the governing party as well, which we now have.
ADV PAUL PRETORIUS SC: You say here in paragraph 152 that it was only
Mr Maseko that lodged a submission with the ANC, following its call for information.
Is that correct as far as you are concerned?
MINISTER PRAVIN GORDHAN: As far as I know yes.
ADV PAUL PRETORIUS SC: And that nothing further came of the initiative as far as
you are aware.
MINISTER PRAVIN GORDHAN: That is right.
ADV PAUL PRETORIUS SC: The fact that these issues of State capture had been
raised, and had been raised with the executive by people who one would presume had
knowledge of malfeasance within various departments, and the response both of the
recipients of the memorandum and the own initiative of the ruling party, with hindsight
are you of the view that that was sufficient or acceptable?
MINISTER PRAVIN GORDHAN: As I said I think there were a multitude of activities
taking place both within the governing party, within the State, including the executive
and outside of the state through various formations. There were any number of court
actions at the time if recall Chair, and other forms of activism depending on the issue
they had obtained at a particular point in time. And you are talking about Chair, a
context in which the executive itself was beginning to be compromised, and a difficult

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terrain in which to operate.
So we are not talking about honest brokers sitting around a table where one
can, in a collegial way say you know Mr Maseko is very concerned, as our DGS, about
what is happening to the public service, can we work out what arrangement we could
have to respond to their concerns. Life did not work that way in that particular context,
and it is this overall milieu that you need to take into account Chair, of opposition to
the wrong things but also they insist on carrying on, the insistenc e on carrying on with
the wrong things as well at that time. So it is that contestation that we have and which
continued and which continues in a different form today.
ADV PAUL PRETORIUS SC: Thank you.
CHAIRPERSON: I wonder whether – or maybe I should put the question this way, is
the lack of response to the invitation by the governing party to its members to come
forward, is the lack of response, because it seems that it was maybe one or two people
who responded to – as far as the public knows, obviously one does not know what
went on inside, could it in any way be said to be a reflection of the extent to which
maybe some of its own members, that is the governing party, might not have had
confidence that it could handle these kinds of issues properly or the way they would
expect?
MINISTER PRAVIN GORDHAN: That is one possibility Chair, the other is the reality
that there was a climate of fear, fear for one's life, fear for one's family, fear of losing
one's job, fear of being compromised in terms of maybe future career prospects. But
that climate of fear in the more former sense should not be underestimated because
we already had, as Mr Nene himself pointed out, all sorts of so called intelligence
reports which we are going to come to in this context as w ell, and conspiracy theories
but also conspiratorial acts being performed at that time, and that does create a climate

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that is not conducive to easily reaching confidence in some of these processes. But I
suppose difficult colleagues in the governing party or in the executive might have
different perspectives on this, and as they appear before you, you might want to
explore that.
CHAIRPERSON: Thank you.
ADV PAUL PRETORIUS SC: Yes certainly Minister, the issue will be considered in
relation to leading evidence before the Commission as to how State capture, if it is
proven to exist, occurred, how it could flourish and what needs to be done to prevent
it happening again but that is an on-going process and we can assure the public and
the Commission that it will be investigated fully on an on-going basis.
At paragraph 153 Minister, you deal with your removal as Minister of Finance,
and that occurred in March 2017. Would you detail the prior travel that you undertook
to the United Kingdom and the intended travel to the United States, the purpose of that
travel and in particular whether it was authorised travel or not.
MINISTER PRAVIN GORDHAN: Again to assist your time Chair, if I can quickly
summarise the response to Mr Pretorius' question, as I indicated to you this is a normal
process that follows both the medium term budget policy statement and the budget
itself, and it is a long held tradition established in the Treasury, that the Treasury and
the Reserve Bank would undertake these roadshows as they are called. Some of them
what we call information roadshows, this is what the budget is about, this is where we
are heading. Some of them are combined with funding, raising funding as well. So in
the course of the roadshow colleagues in the Treasury would test the market and see
whether there are investors in the right mode, meaning going to offer you money at
the right price and interest rate, and if that is the case, either when we come back or
during the course of the visit a bond will be raised, one billion Dollars, one and a half

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billion Dollars, and often those are oversubscribed given the good rates of return that
people receive.
Secondly these visits can only take, or these roadshows can only take place
as far as Ministers are concerned, because officials get their consent from Ministers
but Ministers get their consent from the presidency. So we submit an itinerary, give a
rationale for the travel and obtain approval before travel arrangements are finalised,
and that was the case as indicated in paragraph 153. 154, we indicate that on this
particular occasion Mr Fuzile, the Director General and I would be travelling to London
overnight on Sunday the 26 th of March. Former Deputy Minister Jonas was due to fly
to New York on the Tuesday, so he was not going to join us in London, he was going
to go directly to New York. Once Mr Fuzile and I had completed a two day set of
interactions in London, Mr Fuzile will then join Mr Jonas in New York, and they would
continue with the US leg of the roadshow. This was also an occasion on which
business had joined us in London and I think labour joined later on the US leg of the
visit.
155 indicates that as literally the tyre hit the tarmac at Heathrow airport. I put
my phone on and there was a message from the Director General in the presidency
instructing both, well all of us, the Minister, the Deputy Minister and the Director General
to return immediately. Immediately means get onto the next flight available. The next
flight was not five minutes away it was in the evening. So the question was what do we
do with our time, but also the Deputy Minister was not with us. The approval would have
been granted for him to travel to New York. So nobody bothered to check that clearly
before that message was sent.
Mr Fuzile and I at 156 then discussed the message and said that we owe a
responsibility to the meetings that had been scheduled which included two meetings with

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ratings agencies and then with a range of investors. I think Mr Jabu Mabuza and Ms
Nicky Newton King were already in London and were part of our team. So for the rest of
the day we said let us meet the investors and interact with the ratings agencies. There
was one ratings agency that we were going to meet the next day, but obviously we were
not going to be there the next day any longer and we then scheduled a telephone
conference with them if I can recall and we then had our flights rescheduled for later that
evening to return to South Africa as 156 indicates. If I may continue Mr Pretorius, is that
okay?
ADV PAUL PRETORIUS SC: Yes please.
MINISTER PRAVIN GORDHAN: At 157 Chair on the same day that is on Monday former
President Zuma reportedly informed senior leaders of the SACP, that is the Communist
Party that he intended to remove me and former Deputy Minister Jonas and referenced
a purported intelligence report accusing me and others of conspiring with foreign forces
against him as President. Of course I reject and deny these allegations and I never saw
the report as a whole. However...[intervenes]
ADV PAUL PRETORIUS SC: If you would go...[intervenes]
MINISTER PRAVIN GORDHAN: Commission has got a nice photograph of me waving
this report so I wil wave it again, but it is not the report it is only two pages.
ADV PAUL PRETORIUS SC: Let us take it step by step Minister if you...[intervenes]
MINISTER PRAVIN GORDHAN: So that is the two pages there.
ADV PAUL PRETORIUS SC: The pages one and two of the supplementary bundle.
MINISTER PRAVIN GORDHAN: That is for the Chair.
ADV PAUL PRETORIUS SC: Contain a document headed part one text. It is a two page
document and despite our own investigative efforts we had not been able to find anything
else that purports to be an intelligence report. When you say you never saw this

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intelligence report just explain please to the Chair what you mean by that?
MINISTER PRAVIN GORDHAN: Well if this is alleged to be two pages of a report then
we have not seen the report we have seen the two pages. Secondly this was circulating
by the time we got back on Twitter and Whatsapp and so on. So it was easy to get hold
of this once we heard from either the public domain or from the Communist Party that
there was this so-called intelligence report. Of course the President is in the best position
to answer whether there is a report or whether there is just these two pages and of course
this has got some ludicrous suggestions that very prominent bankers and others have
set up meetings with banks and investment bankers in the UK and the USA to have official
meetings to discuss South Africa's financial markets. They have also set up secret
meetings to start with what is called Operation Checkmate. Now not all of us are fans of
chess I might say but anyway. It is interesting terminology that these people that operate
in the conspiratorial terrain come up with. It then indicates all three of us were going to
be fired and that there will be some proof of what they are selling of the corruption of the
Guptas and how the investment banks need to stand to fight the President and so on.
So that is the report Chair. At 158...[intervenes]
CHAIRPERSON: I am sorry let me just make sure I understand the position. So this
document that we are referring to now would it be the same document that you may have
been shown, have it in your hand and some TV...[intervenes]
MINISTER PRAVIN GORDHAN: Yes. We compared the photograph with this.
CHAIRPERSON:

Okay, all right.

Now you say you got it from just social

media...[intervenes]
MINISTER PRAVIN GORDHAN: Digital media.
CHAIRPERSON: Social media, okay. So you do not know whether it is or it is not the
report that the President may reportedly have told leaders, senior leaders of the

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Communist Party about?
MINISTER PRAVIN GORDHAN: It would appear so, but the Communist Party would be
able to confirm with you Chair.
CHAIRPERSON: Yes. Yes, okay thank you.
ADV PAUL PRETORIUS SC: What is clear it seems from your evidence that apart from
this document no document purporting to be an official document of any intelligence
agency in South Africa was ever seen by you.
MINISTER PRAVIN GORDHAN: Yes.
ADV PAUL PRETORIUS SC: You deal again with the report and how it was dealt with
and its potential use by the former President according to reports on the next page, but
in the meanwhile would you just talk of your return to South Africa as you set out in
paragraph 158 please?
MINISTER PRAVIN GORDHAN: As I indicated Chair we then had a whole day of
meetings and made our way back to Heathrow airport and returned to South Africa. At
159 I hinted earlier on at this point is a note which says on Tuesday 28 March, so it is a
day after our arrival, sorry the day of our arrival was the day that the court application
regarding the closure of the Gupta business bank accounts in South Africa by several of
the major banking institutions were said to commence argument in the Pretoria High
Court. It is of course possible that had I been removed as Minister of Finance by the
time, by that time my successor would have withdrawn the application. So one can
surmise Chair that the intention was to get rid of us by Monday or Tuesday morning, put
in a new Minister and withdraw the application that was made to the Pretoria High Court.
CHAIRPERSON: To your knowledge prior to the hearing of that application were there
colleagues of yours within Cabinet including the President maybe who may have
expressed opposition to your launching that application?

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MINISTER PRAVIN GORDHAN: Not that I was aware of.
CHAIRPERSON: Okay. It is just that I, I was following up on your statement that your
successor may have withdrawn the application because if that had happened it would, it
may have been something quite uppermost in somebody's mind that it should be
withdrawn.
MINISTER PRAVIN GORDHAN: No it is fair point Chair. So there is a question whether
there was opposition to the application as opposed to whether there was supposed for
intervention with the banks that they should not close the accounts. So the latter there
is lots of evidence of, right, and the application is just one part of that whole saga. So
one can quite imagine that one of the intentions would be that no such court application
should take place.
ADV PAUL PRETORIUS SC: Chair we are, I hope, half an hour and not more away from
concluding the evidence. It is 11:15 do you want to take a short adjournment?
CHAIRPERSON: Should we maybe go up to half past if that will help us to finish or would
you suggest that we take the tea break?
ADV PAUL PRETORIUS SC: Well we will not finish by half past.
CHAIRPERSON: You will not finish by half past? Okay, so...[intervenes]
ADV PAUL PRETORIUS SC: I know that I am pressing against time limits.
CHAIRPERSON: Yes. Okay how much more time do you think we...[intervenes]
ADV PAUL PRETORIUS SC: Half an hour.
CHAIRPERSON: About half an hour?
ADV PAUL PRETORIUS SC: We will do our best for half an hour.
CHAIRPERSON: Yes, okay all right. Then maybe let us take the short break until half
past so maybe if we resume at half past we can finish at 12:00 with the Minister. Thank
you we adjourn.

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HEARING ADJOURNS
HEARING RESUMES
MINISTER PRAVIN GORDHAN: Apologies Chair.
CHAIRPERSON: Thank you Minister. You may proceed Mr Pretorius.
ADV PAUL PRETORIUS SC: Thank you Chair. Mr Gordhan you are dealing with the
circumstances that prevailed on your return to South Africa in March 2017 shortly before
or immediately before you were dismissed. You had dealt with paragraph 159 by referring
to the court application in relation to the closure of bank accounts and perhaps you should
deal with events upon your landing at O R Tambo Airport which you do at Paragraph 161.
MINISTER PRAVIN GORDHAN: So Chair I indicate in 161 that immediately after
Mr Fuzile and I land at O R Tambo Airport we make our way to Luthuli House to meet the
then Secretary General of the ANC Mr Mantashe to obtain clarity about what was going
on. At 161.1 we say that during that meeting with Mr Mantashe he informed me that the
former President Zuma had met with the ANC's top six officials the previous day. That
some fake intelligence report has been presented to them and that it was rej ected by
those in the meeting. 161.2 Mr Mantashe then told me that Mr Zuma told them that
regardless of the intelligence report his relationship with me had irretrievably broken
down. Since this was not my impression of my relationship with the former President I
asked Mr Mantashe if he had indicated why he felt our relationship had irretrievably
broken down. Mr Mantashe indicated that he did not. Mr Mantashe recounted that Mr
Zuma had indicated that it was unusual that the Minister, Deputy Minister and Director
General were all out of the country. I have indicated to you Chair that the Deputy Minister
was still in the country. I corrected him that Jonas had not left South Africa and Mr
Mantashe seemed to be shocked by this fact. At 161.4 I said I believe...[intervenes]
ADV PAUL PRETORIUS SC: And then Mr Molefe arrives in that discussion.

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MINISTER PRAVIN GORDHAN: I believe that Mr Zuma had mentioned Brian Molefe as
a possible replacement as Minister of Finance, but that the suggestion was rejected by
members of the top six at that meeting. At 161.5 as an aside note that Mr Molefe who
had resigned from Eskom following the Public Protector's state capture report was sworn
in as a member of Parliament for the ANC. Speculation at the time was that he was, this
was a precursor or event leading up to his replacing me as Minister of finance. Almost a
year earlier in April 2016 Mr Buthelezi also were sworn in as a member of Parliament for
the ANC and speculations suggested that he was earmarked to be Mr Molefe's Deputy
Minister. At 161.6 if I may continue...[intervenes]
ADV PAUL PRETORIUS SC: You were to summarise briefly the discussion between
yourself and Mr Mantashe regarding your status or contemplated status as Minister.
MINISTER PRAVIN GORDHAN:

The important point here Chair is Mr Mantashe

indicated to me that Mr Zuma would prefer if I were to resign rather than him having to
fire me and we had covered this issue previously of firing and dismissal and rather
resignation and that of course it would suit everybody if we had just resigned and as I
indicated earlier many comrades and colleagues were saying that it is important to stay
on that if Mr Zuma chooses to fire us then so be it and that would actually draw a line in
the sand so to speak and expose to the public what was really going on in terms of the
state capture agenda and how appointments and dismissals of Ministers was related to
that. At 161.7...[intervenes]
ADV PAUL PRETORIUS SC: Sorry, before you go on. Did you consider the alternative
of resigning in the interest of the finances of the country?
MINISTER PRAVIN GORDHAN: As we say here we have always tried to put the national
interest first. I mean we could have in London said we are taking the day off, cancelled
all the meetings and waited at Heathrow Airport until the flight was ready.

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Rather we did that which was in the national interest which is almost pretend
as if nothing had happened and at some of those meetings we were even asked as I had
told you before, Chair how long are you going to be in that chair which is not a very nice
thing for any human being to be subjected to but that is fine.
In the national interest we have had to bear that burden and carry on. So if I
can just cover 161.7 so in sum we refused to resign and we were ready to be fired. I
understand that Mr Mantashe, from Mr Mantashe that I was likely to be removed and that
the issue of my replacement was to be discussed again the following Monday. Mr Fuzile
was of course very distraught and he can speak for himself a little later and was also
himself considering resigning however he is...[intervenes]
CHAIRPERSON: I am sorry. In terms of the discussion between yourself and Mr
Mantashe was the – was the discussion or was Mr Mantashe saying that you and your
then deputy Mr Jonas were both – there was a risk that you could both be asked to resign
or be dismissed or he was just talking about you?
MINISTER PRAVIN GORDHAN: No it applied to both of us.
CHAIRPERSON: Oh, okay and the Director General then was not being mentioned?
MINISTER PRAVIN GORDHAN: No.
CHAIRPERSON: Okay.
MINISTER PRAVIN GORDHAN: That would be the job of the incoming Minister.
CHAIRPERSON: Okay.
MINISTER PRAVIN GORDHAN:

And so coming to Mr Fuzile here Chair that

notwithstanding his frustrations at all of these developments he continued to serve the
country as Director General of the Treasury until very recently and he has been at the
Treasury for 20 years.
So I returned to my office at the National Treasury that afternoon. The next

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day was the funeral of the late Mr Ahmed Kathrada at the Wespark Cemetery and on
Thursday the SACP issued a media statement recording that it had been informed on
Monday the 27 March by Mr Zuma that I was to be replaced as Minister of Finance.
The statement recorded that the SACP objected to this intended reshuffle.
ADV PAUL PRETORIUS SC: Before you go on Minister the statement that you are
referring to appears at page 2705 of Bundle N1F. Yes please continue. You may do so
with reference to the statement if you wish. I just wanted to place that on record.
MINISTER PRAVIN GORDHAN: No, it is fine. It was also noted that it had laid a
complaint with the Inspector General of Intelligence and the Minister of State Secu rity
regarding what we call the Rogue Intelligence Unit that in our view gathers data illegally,
produces false reports and feeds them into the political and public domain to smere
comrades and that seems to become a national sport in South Africa more recently if I
may comment on that? I do not know the status of that complaint.
ADV PAUL PRETORIUS SC: You say in your statement I do not know the status of that
complaint but it is a matter that may be the subject of further investigation on the part of
the commission. The fact that the Inspector General of Intelligence and the Minister of
State Security were asked to investigate what might well have been a report or a rogue
report of some influence would you have expected some response from the Inspector
General and Minister of State Security concerned generally apart from your personal
interest in the matter?
MINISTER PRAVIN GORDHAN: Well Inspector or Minister of State Security certainly as
a Cabinet colleague if there is an issue that is raised he should be responding but
if...[intervenes]
ADV PAUL PRETORIUS SC: Were you ever asked about the contents of the report by
any official law enforcement agency?

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MINISTER PRAVIN GORDHAN: No.
ADV PAUL PRETORIUS SC: Investigative entity?
MINISTER PRAVIN GORDHAN: No but, Chair I was interviewed much later, I do not
have a date in front of me, by the Inspector General on the question of this report so I
am not sure whether he has completed his investigations and so on.
ADV PAUL PRETORIUS SC: Were you – had you ever been given any feedback as to
the authenticity of the report?
MINISTER PRAVIN GORDHAN: No.
ADV PAUL PRETORIUS SC: Then would you...[intervenes]
CHAIRPERSON: Well maybe you might not have the date in front of you of when you
were interviewed but are you able to give an idea? We are talking about sometime last
year, we talk about sometime this year?
MINISTER PRAVIN GORDHAN: No, probably last year.
CHAIRPERSON: Okay, thank you.
ADV PAUL PRETORIUS SC: Yes the evening of 30 March 2017 you record that an
announcement was made. Would you deal with that briefly please as it was a brief
announcement I understand?
MINISTER PRAVIN GORDHAN: Well by Thursday as a result of the Communist Party's
statement rumours were rife as to when these changes would be announced and it seems
that on Thursday evening there were meetings taking place at Mahlangu and Ndlovu and
many of us were watching the TV screens to establish what was actually going on and
finally it was just past midnight if I recall correctly on 30 March when we heard the
announcement that a number of us Mr Hanekom, Mr Ramathlodi amongst others and
including Deputy Minister Jonas had been dismissed and various replacements were
announced by the President as well.

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In 165 I indicate that I had no contact with the former President regarding his
decision to remove me as Minister of Finance. In other words in anticipation of any
question there was no courtesy granted at all of a telephone call, a meeting or any
explanation and that is where it stands as we sit today.
CHAIRPERSON: But during your second term as Minister of Finance had the former
President ever raised with you any issues of concern that he may have had about the
relationship between the two of you?
MINISTER PRAVIN GORDHAN: None. None whatsoever.
CHAIRPERSON: Seeing that Mr Mantashe was saying that he said there was a
breakdown of the relationship?
MINISTER PRAVIN GORDHAN: Not at all. I know Mr Zuma, Chairperson I forgot to
mention on the first day from 1974 when he was released with I think about eight or nine
others from Robben Island and they were the first batch of Robben Islanders to be
released in KwaZulu-Natal as we know it today and my comrades and I actually
"serviced" him meaning transported him to various places and assisted him in minor ways
at that time as a kind of underground activity and I also financially assisted him to leave
the country. It was 1976 or 1977. We did not earn much in those days but and then I
met him when I crossed the borders of South Africa and Swaziland illegally with another
comrade and met him in Swaziland for a whole weekend before I returned to South Africa
as well.
So as far as relationships are concerned at that sort of level there has never
been a problem so I do not know and it is a normal employer/employee kind of
relationship or situation that one talks about irretrievable breakdowns not in a political
context.
But he is the President and as we always say we serve at his pleasure so if

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he decides to part ways that is his choice.
CHAIRPERSON:

When former Minister Nene was giving evidence before the

Commission there were maybe one or two, I do not know if more instances of interaction
either between him and the former President or with people who report back to him that
one could see may have made the relationship difficult but and Mr Nene testified about
that and one is not talking about what was right, what was not right. It is simply objectively
that they were there – those situations were for example I think the issues that happened
when there was a meeting in Russia about the nuclear deal and the former Minister of
Energy Ms Joemat Pettersson.
MINISTER PRAVIN GORDHAN: Pettersson.
CHAIRPERSON: Yes but in terms of the evidence that you have given yourself I cannot
remember hearing any encounters where there could have been maybe – that may have
shown very clearly any serious issues.
I know that there was the one where you went to him after you were served
with the 27 questions and you I do not know if protested is the right word but you
expressed certain views about it and you did say he did not say much other than flipping
through the letter and saying he would talk to the Minister of Police.
Am I missing anything that one could really say did happen that could be said
to reflect a breakdown in the relationship between the two of you other than maybe just
differences of opinion on certain issues relating to work?
MINISTER PRAVIN GORDHAN: Chair, what I would say is that if one accepts as a
hypothesis the betrayal of the Promise notion of state capture then yes there would be a
number of developments. Denel Asia, the Gupta bank accounts, the nuclear issue and
so on all of which the Petro SA issue and all of those that are the ones we highlight here,
the changes to the SAA Board the Airbus deal and the swap between myself and Minister

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Nene at different stages, we had decisions to make each of those would have constituted
interference in the project if you like and distractions which probably were not acceptable
by both him and those working with him like the Guptas and others that we have named
before.
So this is I would imagine not about the cordiality that issue. This is about if
the hypothesis is right and I will come back to that in my closing remarks then the
Treasury was standing in the way by saying can we test the numbers?
Can we check the viability? Can we understand the business case? Have
you followed the right procedure as opposed to signing off on whatever it is that is actually
requested which might have been the expectation but we do have laws in this country
and we do have procedures to follow in this country as well and a public servant is
required to as you would I am sure say to work within the confines of the Constitution
and the law which is what they do by and large.
CHAIRPERSON: Yes because you know as I see it you know it seems to me that a
breakdown of a relationship you know it is like maybe there has been confrontation, you
know confrontation on certain issues but from what you have said I mean even with those
things where you maybe said on your evidence to have stood in the way of what he may
have wanted to happen am I understanding from your evidence is that you simply took
certain principled decisions or stance, positions based on your understanding of the legal
requirements and of how things should be done, but nothing more than simply insisting
on what you believed what was right?
MINISTER PRAVIN GORDHAN: That is a fair summary Chair.
CHAIRPERSON: Thank you.
ADV PAUL PRETORIUS SC: Thank you Chair. At paragraph 166 Minister you deal with
the reaction and the expressions of concern at the hands of global ratings agencies. You

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dealt yesterday and the day before about the role that ratings agencies played and you
did express or you have expressed here a desire to place on record what their responses
are. Do you still wish to do so?
MINISTER PRAVIN GORDHAN: If I can just point you to a few phrases if I may very
quickly. So 166.1 Moody's says the abrupt change in the fourth line in leadership of key
government institutions would allow Moody's to assess these risks and if the changes in
leadership signal a weakening in the country's institutional, economic and fiscal strength.
So you can see how the institutional factor begins to enter the equation. 166.2 Standard
and Poor essentially say the same thing that their view that the divisions in the ANC led
government that have led to changes in executive leadership including the Finance
Minister put policy continuity at risk. This has increased the likelihood that econom ic
growth and fiscal outcomes could suffer. So again the economic and fiscal consequences
and Fitch essentially says the same things as well in the next paragraph. So I will not go
into the detail there just to save time.
ADV PAUL PRETORIUS SC: Yes. Minister following your removal as Minister of Finance
you then returned to Parliament. You obviously remained a member of parliament.
Would you deal briefly with that period?
MINISTER PRAVIN GORDHAN: So I chose to remain a member of Parliament and give
that experience once again an opportunity to settle until we as a family could decide what
I needed to do and it was a good choice because being on the public, the portfolio
committee on public enterprises and particular a part of the investigation or what shall
we call it? Let us call it investigation that the committee undertook into Eskom and state
capture was quite revealing and an extremely good experience and holds me in good
stead now in relation to the state owned entities and in that regard Chair I want to refer
you to Bundle N2 page 142 where you have this diagram.

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CHAIRPERSON: Mr Pretorius?
MINISTER PRAVIN GORDHAN: You might not want to, essentially...[intervenes]
CHAIRPERSON: It might not be necessary to look at it now.
MINISTER PRAVIN GORDHAN: You do not have to look at it now.
CHAIRPERSON: Yes.
MINISTER PRAVIN GORDHAN: I will sum up what it indicates and we are going to try
and make copies available for the media as well, but it is from the Eskom booklet I
referred to earlier on which was provided by some academics to the Parliamentary
committee, but it gives you a fascinating relationship between timelines on the one hand
and governance processes, coal purchases, the nuclear project, IT deals and other media
deals and the relationship between changes in the executive and changes in
management over a period of time and if you take this and plant it if you like onto the
hypothesis of state capture you can see that the fit is quite precise.
CHAIRPERSON: Thank you.
MINISTER PRAVIN GORDHAN: So that is to help the Commission get a concrete
example of state capture in a particular institution which you will see as the lawyers would
say mutatis mutandis in different instances as well.
ADV PAUL PRETORIUS SC: Chair there will be evidence in relation to each state owned
entity that is relevant to the terms of reference of this Commission in detail which will deal
amongst other things with matters such as those raised on that document.
CHAIRPERSON: Well thank you, thank you. I think that is very important.
MINISTER PRAVIN GORDHAN: So 168 Chair just to end off that part that inquiry which
is the right word into Eskom revealed the extent of manipulation of the boards of the
SOEs as I indicated, their management, the abuse of contracts and procu rement
processes for corrupt and unlawful ends and there is any number of examples Chair that

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can be used from the Eskom experience to lend credibility to the argument that changes
in Ministers, boards, management and contracting and vendors if you like were all part
of a fairly organised scheme to defraud big institutions like Eskom.
ADV PAUL PRETORIUS SC: That is a question which will be further dealt with in
evidence and in his report interim or final the Chair will be asked to draw conclusions in
that regard particularly in regard to the concept of state capture in relation to the concept
of corruption. You then, Minister if we may go to your return to Cabinet and your current
role as Minister of Public Enterprises briefly.
MINISTER PRAVIN GORDHAN: All I want to say there Chair is that the new President,
President Ramaphosa reshuffled Cabinet on the 26 th of February 2018 and I was then
appointed Minister of Public Enterprises and as I have indicated we have about seven
SOCs or SOEs that actually report to us and also as I indicated to you that the department
itself is trying to collect as much information as we have access to so that we can provide
it to the Commission and its investigators and there is an on-going dialogue and
interaction between the department and yourselves and that in many of the institutions
now we are engaged in the process of if you like recapturing them or rearranging boards
and management and procurement and other systems in order that they execute the kind
of mission that they were designed to actually do and there is a fair amount of success
on the one hand, but also not, insignificant pushback and so much of the public outcry
that we see and the noise that we heard yesterday for example arises from the fact that
there are many parties who would not like this Commission to go too deeply into say the
issues of Eskom for example and understand who were the key players involved in the
state capture process itself.
ADV PAUL PRETORIUS SC: Before you take the opportunity to make your closing
remarks as contained in the last few pages of your statement may I ask a few

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unconnected questions of you Minister? The first is that on the 27 th of April 2017 you
gave an interview to Christiane Amanpour of CNN and in that interview you were asked
do you have any information that might implicate former President Zuma in any acts of
corruption and your answer was "I do not have any personal information but as I said
there are all sorts of suggestions not just about the former President but about people in
the private sector and the people in the public sector and that information needs to be
tested." That was in April 27 th. Has the status of your knowledge changed since then?
MINISTER PRAVIN GORDHAN: I think the knowledge of South Africans Chair generally
has changed from about June 2017 when the Gupta leaks emerged and enabled us to
both see many more dots and connect many more dots and have far deeper information
as well and then secondly as we get into the SOEs now you can see the level of
malfeasance on the one hand but institutional damage on the other hand as well and
recovering from this is going to take quite some time. So yes certainly one has a better
grasp of what has been going on now than then.
ADV PAUL PRETORIUS SC: Then Minister in the supplementary bundle particular at
page 109 that is bundle N2 there is some documentation that the legal team provided
you with regarding South African Airways and if I may just ask you a question in relation
to that documentation. Do you have any recollection of your interactions with Minister
Gigaba at that time prior to 26 September 2012? I know it is five years ago but the
guarantee that you were asked to provide was provided some time after it was requested
and the question is whether you had any communications with Minister Gigaba about the
provision of the guarantee or your intentions in that regard?
MINISTER PRAVIN GORDHAN: No I do not have any firm recollections, but as I
indicated Chair you recall how the guarantee or applications for guarantee are dealt with.
So just to refresh your memories an institution or a ministry or department would come

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apply to the Treasury and say can we have a guarantee of X for Y purpose? That is then
put before a fiscal liability committee made up of senior officials in the Treasury who will
both look at documentation and interview people or discuss with people from the relevant
institution the nature of the project that they are looking for the finances for or the
guarantee for and guarantees are often related to borrowing. So if you have a guarantee
from the State most financial institutions will then lend you money although that is not the
case right now. There is a lot of hesitancy because of the nature of damage that has
been done to SOEs. So even salaries are difficult to find or the money for salaries at this
point in time. The FLC will then make a recommendation to the Director General and
that will then come as a recommendation to myself and either, if there is any area of
disagreement, there is further dialogue between the DG and the financial, Fiscal Liability
Committee. Mr Fuzile is probably here by now so he can help you with a lot more details
because he goes through that stuff and then we decided whether a guarantee is given or
not. So usually we are not in the business of saying in advance you will get a guarantee,
because we have got to wait for this process to be completed.
ADV PAUL PRETORIUS SC: Right. Minister Gigaba may well come to the Commission
to give evidence in regard to these events. It has been dealt with separately under the
South African Airways banner and will be dealt with in due course. I have no prior
knowledge of what Mr Gigaba will say, but if he were to say that there was a delay
between 9 September when the request was given and 26 September 2012 when the
request was finally approved is there any explanation for that delay and I think you have
given it now.
MINISTER PRAVIN GORDHAN: I have given you an indication of the process.
ADV PAUL PRETORIUS SC: Then Minister just one question in relation to page 25 of
your statement. My apologies at paragraph 25 of your statement on page 12. In

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paragraph 24 you talk about a vision which constitutes government objective as you say
and the general objectives of the governing party's goals and objects and you say in
paragraph 25 "this is the vision that was attacked by state capture including by those at
the highest levels of the executive." To whom are you referring there?
MINISTER PRAVIN GORDHAN:

Well those who participated in the processes

depending on the conclusion you arrive as a Commission of changing boards, changing
managers, allowing malfeasance to actually occur in terms of the hypothesis of state
capture that I put forward to you.
ADV PAUL PRETORIUS SC: And in the executive?
MINISTER PRAVIN GORDHAN: The executive could mean a Minister, the President or
Deputy President or whoever.
ADV PAUL PRETORIUS SC: Any particular members of the executive that you wish to
name?
MINISTER PRAVIN GORDHAN: No, it is not for me to indicate who they are. I think as
you go through diagrams like this one in Eskom it tells you very clearly who was in office
when what happened. I would not like to do the job of the Commission.
ADV PAUL PRETORIUS SC: Then Minister you spoke about your acceptance of a
position as the GCEO, General Chief Executive Officer of Transnet at a stage and you
spoke of your acceptance of that position and then it seems you were dissuaded from
accepting the position and later you were appointed as Minister.
Do you have any knowledge of firstly who would have sought to dissuade you
from accepting the position and the reasons there for and I do not necessarily ask you to
speculate but the – there are various reasons that might spring to mind and might become
more obvious once the evidence before this Commission is complete.
I just need to close the gap now that you are in the witness box as it were to

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know if you have any knowledge of the circumstances surrounding those events?
MINISTER PRAVIN GORDHAN: No, clearly Chair at that time we are talking about a
period just before elections. So some members of the top six of the ANC would probably
already begin to look at issues of how do they design a new administration? How many
departments would they have and who are possible candidates for particular positions
as well and they had probable came to some conclusion about whether they wanted me
for a particular position or a range of positions or possibilities and on that basis gave me
a message which says hold on, do not accept this job and you do not ask for details when
those things happen. That is the discipline we have grown up with and await the final
decision that they make.
So if one was not appointed as a Minister then one goes and looks for another
job.
ADV PAUL PRETORIUS SC: Yes. Minister, finally just one particular issue and one
general issue. One of the topics that the legal team is investigating in relation to the
various state owned entities is the issue of governance and in particular the manner in
which senior personnel and executives, members of boards are appointed and in
particular vetted for appointment, what checks and balances are put in place and it is
relevant to the recommendations that the Chair may be asked to make or may decide to
make in relation to governance issues, appointments and dismissals of senior executives
and board members.
Just one example that has been brought to the attention of the legal team is
that of Mr George Sebulela for example. Now I know that he was not appointed. I am
informed that he was not appointed under your watch as it were but he did resign because
of a conflict of interest.
Are you satisfied with the steps taken by SOEs prior to appointments in order

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to vet candidates for positions and thereafter the checks and balances that are put in
place thereafter to ensure for example that there are no conflicts of interest.
MINISTER PRAVIN GORDHAN: I do not think one can ever be satisfied about those
sorts of issues but what you have in South Africa is these various codes like the King
[indistinct] code which says follow these procedures.
You also have protocols if you like at a board meeting which says declare your
interest and it is up to the individual to exercise their ethical beliefs if you like and
foundations and indicate the conflict of interest in one way or the other.
In that particular case, Chairperson, the conflict of interest was brought to my
attention by Mr Mabuza who is the Chair of the Eskom Board and the Eskom Board dealt
with that matter and made me aware of the fact that Mr Sebulela finally decided to resign
having understood that there was this fairly serious conflict of interest that required him
to get off the board. I think we can always improve.
ADV PAUL PRETORIUS SC: Then in paragraph 170 of your statement you record that
the Department of Public Enterprises will be providing the Commission with information
particularly in regard to corporate governance, procurement and accountability and I trust
that offer still stands?
MINISTER PRAVIN GORDHAN: As long as I am there yes.
ADV PAUL PRETORIUS SC: Yes. You wished to make closing remarks?
MINISTER PRAVIN GORDHAN: If I may, Chair?
CHAIRPERSON: Well maybe before you do so let me ask some questions.
MINISTER PRAVIN GORDHAN: Sure.
CHAIRPERSON: So your closing remarks can be closing remarks. In your statement I
had the relevant page, oh here, in paragraph 10 of your statement you say:
"Reflecting on the period 2009 to 2017 now it would appear that

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I was witness to events some of which are set out below and it
seems an unwitting member of an executive in the earlier part of
this period which was misled, lied to, manipulated and abused
in order to benefit a few families and individuals in order to
release the worst forms of recklessness and corruption, in order
to rob ordinary people of schools, clinics, education, in order to
abuse and decimate key institutions of our democracy including
SARS and you mention others and in order to damage the
economy increasing joblessness, forsaking the youth and
increasing the marginalisation of women."
Are you able to specify who lied to this executive and misled this executive
and manipulated it if I understand this correctly?
MINISTER PRAVIN GORDHAN: No, I think in the first instance the President did. So
putting – asking us to look at intervention into the relationship between banks and their
clients for example, pushing the nuclear deal as was indicated already and if one again
comes back to the hypothesis of state capture allowing for particular types of boards in
SOEs to be established, putting in place particular Ministers or others who might be
cooperative in this venture as well.
All that if you look at it retrospectively now if one accepts then the hypothesis
it means that there was a scheme at play designed by somebody and I think I hope that
by the time you complete your work, Chair, you will tell South Africa who is this somebody.
I mean we have heard various anecdotal accounts of diagrams and walls at
certain compounds and so on saying we finished this target. Who is the next target?
That is what we are actually aiming for the timing of appointments and dismissals and
how they coincide with some of the projects at play.

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Once the other projects come under your purview as well I think you will be
able to put those pieces of the puzzle together in the way that I suggest.
CHAIRPERSON: No, thanks. My other question is this. If at the end of this process I
come to the conclusion that definitely there was state capture and I keep on reminding
everybody that the terms of reference say it is allegation so we are looking into the
allegations, if I come to the conclusion that there was state capture I obviously need to
establish who were the players in the state capture.
I also need to look at how did state capture come about. I need to look at what
are the things that facilitated the happening of state capture. What – is there any
environment that provided fertile ground for state capture to happen the way in which it
has happened.
I have got to also look at who or what institutions ought to have done
something and if they had done that which maybe they should have done maybe state
capture would not have gone the extent I might find it will have gone and so I would have
to look at all of those things and obviously one looks also at what measures should be
put in place to make sure it does not happen again or at least to minimise the chances
that it could happen again.
Now the governing party and I am making sure I am saying governing party,
the governing party I do not know what position it will take. I know that it has encouraged
people and I assume including its members to come forward and if they have got
information and assist the Commission and you are here, excuse me, you are here to
give the Commission evidence that you have knowledge of.
But one of the questions that probably I would have to ask if I find that there
was state capture would be is there something that the governing party ought to have
done itself and I go back to the question I mentioned earlier that is the electorate that

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gave during this relevant period the governing party the power to govern when did it
realise that there was something wrong going on here?
When did it realise that it looks like the state was being captured? What did it
do about it? Now there is or there may be a risk. I should not say there is. There may
be a risk that the governing party and maybe some of its members or maybe some of it s
leaders might feel that its members should not say anything negative about whatever role
it ought to have played and did not play and so on.
If that happens it would be a pity because then this process would be all the
poorer. For this process to be enriched it is very important that everybody who has –
who knows something be encouraged to come forward and say what they want to say
without fearing that they may be marginalised by whoever including by their own party
even if they say something that the leadership of the party might not be happy about.
But we need to get to the bottom of this and we need to know who should have
done what, did they do it and if they did not do it why not? So I ask the question whether
in your view there is anything that the governing party. I know that they will come and
talk but you are a senior member of the governing party and you certainly have views on
issues and those vies may be beneficial to the Commission. Is there anything that you
have looked at and said look the governing party probably should have done A, B, C, D?
It might not be exhaustive what you, but certain things if it had done this or that or that
by that time maybe state capture could have been arrested at a certain time. That is the
one question. The other question I want to ask is whether within the governing party the
environment and when I say environment I include the practices of the party, the
Constitution and everything, the traditions are such or were such during the relevant
period that members of the party would have been encouraged, would have felt
encouraged that if they though the ruling party should do something about something like

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this they would be able to stand up within the party and say no, but this must be sorted
out, the party must do this, the leaders must do this and they would be able to do, to say
that without fear of any repercussions whether of not being promoted to some position,
of not being put in a list to go to parliament or fear of losing some job. In other words I
would like to see that because obviously a party such as a political party can be
influenced in a serious way to take certain decisions if its members think it should take a
certain direction.
MINISTER PRAVIN GORDHAN: It is a complex set of issues Chair.
CHAIRPERSON: Yes.
MINISTER PRAVIN GORDHAN: Let me see what I can do to...[intervenes]
CHAIRPERSON: Yes...[intervenes]
MINISTER PRAVIN GORDHAN: Address it. I think, I do not claim to be an expert but
politics, governance and patronage go together. The question is how do you use the
powers and authority that you have to dispense patronage in the least malicious way and
with the least harm to people concerned as your best bet. I do not think there is a country
in the world or a stage in history, I am guessing, where patronage was not a feature of
governance. The second is that it is very important to have a well informed and active
citizenry and we do not do enough of that in democracies. Certainly not in ours. So we
operate today very much on sound bites of one kind or another and depending on the
preferences of the intermediaries or interlocutors that we have who have their own world
views and their own biases and perhaps their own intonations as well in terms of what
needs to be communicated and what needs to be supported or not, but informed citizens
who understand what budgeting means, where public resources are located, what the
role of state owned entities are or is and what is the responsibility of public
representatives who fill the shoes in those particular institutions can then hold those

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people to account. What the world is going through and indeed South Africa is going
through is a period in which there is a raging populism from certain quarters which in a
sense manipulates public opinion and manipulates people at the end of the day based
on lies, slogans, fake news and other kinds of suggestions hoping that that would on the
one hand promote then politically into office or into so-called kingmaker roles and on the
other hand mask as you said the efforts and there is a lot of, part of this whole fight by
campaign from all, it is not just one party in this equation but part of this fight back
campaign is about taking every possible measure to mask the malfeasance that is going
on and obfuscate it as much as possible and that is where if you remember I used a term
the politics of distraction. Distract people away from where the actual activity is occurring.
So it is in that context that every governing party or every political party for that matter
has to ask itself in seeking public office and the support of citizens to win elections on
the one hand you have manifestos, on the other hand you have principles and on the
third hand you have actual human beings who want to build careers out of this. So once
you have politics as your career and your sole source of income then you become captive
to that particular project as well and begin to serve a particular purpose and that purpose
is often self-serving rather than public serving at the end of the day and so I think what I
indicated at the outset was the various resolutions and reports that the then Secretary
General prepared and presented the diagnostic report, the final resolution at the Nasrec
conference and so on to indicate that in policy terms and philosophy terms we do say the
right things. We have the right kind of focus. The question is what is a relationship
between the principle if you like and the outlook that we adopt and that you practice and
what would it take for people to have that gap between practice and principle as small as
possible if at all that is possible. I think you have identified that there are a number of
factors as you put it that might intervene in people deciding whether to stand up for certain

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things or not. So I think principles are one thing and the other I might have pointed out
in the earlier part of my testimony that you see in boards of SOEs as well and that is that
do you have the courage to do it? So courage means you are going to take some risks
as well and taking the risks means you are sticking your neck out either in a, and it now
appears sticking your neck out in a literal sense not just a figurative sense with the kinds
of threats that we see having been made in the public domain.
So I think each of us will have to excruciate on this issue and say could I have
done better, could I have done differently and President Ramaphosa is attemptin g to
steer us in a way in which we begin to find if you like a moral centre of gravity again and
moral focus again and part of the renewal project in the ANC is to get that right. Whether
we succeed or not we will know in two or three years’ time, but there will also be different
interests in any human organisation and some would be very short term and self-focused
and others will actually focus on the national interest and the broader objectives that the
movement like the ANC stands for and one not just hopes, but the activists who are driven
by the broader objectives hopefully are the ones who can drive the organisation in the
right kind of direction, but if you have an informed citizenry they will hold us to account.
They at least have either the elections or other public fora in which they can say we do
not like what you are doing and we do not like the way you are spending our money. We
do not think you are giving the service that we actually require and that is not just about
politicians it is also about public servants as well and I think it is that mix that we need to
get right as we go forward, but you raised very important questions.
CHAIRPERSON: No thank you very much. Before you do your closing then I just want
to say I did mention at the end of Ms Barbara Hogan's evidence that in due course we
will ask, you know, many stakeholders in the country including civic organisation, maybe
churches, political parties to start thinking about giving suggestions of possible

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recommendations to deal with certain issues that fall within the, within the terms of
reference of the Commission giving them enough time that to ensure that those who want
to do research before they prepare their submissions they have enough time before the
Commission finishes its work, because in the end we want to be able to, you know,
involve the public to the extent that we can in resolving some of these national problems.
So I take this opportunity to say I think the Department of Public Enterprises as the
department that is fully involved with the public enterprises and that may have a lot of
information as to what is happening or what happened should consider that it will also be
most welcome for it at some stage to give suggestions, you know, of where, how they
think some of the problems relating to SOEs can be and should be resolved. What
measures this Commission should consider recommending in order to make sure that
what happened does not happen again. You know the department would have people
who are fully involved on the ground on some of the issues and one can get lots of benefit
from people who have that kind of involvement in any matter. So I extend the same
invitation to you as well.
MINISTER PRAVIN GORDHAN: Thank you very much.
CHAIRPERSON: Thank you. You subject to whether Mr Pretorius still has any questions
I am happy that you can give your closing remarks.
ADV PAUL PRETORIUS SC: One brief issue Minister in answer to the question from
the Chair in relation to the contents of your paragraph 10 you were asked to identify
parties who had misled or lied to or manipulated Cabinet and others and your answer
was the President. I presume you meant the former President.
MINISTER PRAVIN GORDHAN: Yes. Thank you for clarifying that.
ADV PAUL PRETORIUS SC: Your closing remarks please.
MINISTER PRAVIN GORDHAN: Thank you Chair. I will try to be as quick as possible.

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Let me thank the Chair and the legal team for the assistance they have offered in enabling
me and my colleagues to put forward the statement that I did and I must indicate that I
did so voluntarily although the Commission went through certain processes of its own
and under oath as well and I hope that what we have exchanged with you enables the
Commission to succeed in the endeavours that you have set out Chair. The second point
I want to make is that as far as the governing party is concerned I have set out the various
documents at the outset and made reference to them again a moment ago. The third is
we are all working under the mandate in some ways that the President and the governing
party has defined that we have to work on unity within the organisation, but then unity as
you correctly pointed out needs to be based on firm principles and unanimity or sufficient
consensus on those principles as well.
There is agreement as the President has articulated that state capture must
be fought, it must be ended and that everything possible must be done to uncover what
has happened and that there must be consequences for those of course this immense
damage to our economy and to our country and the consequences for people on the
ground at the end of the day and what this involves as you correctly pointed out and the
President did in the State of the Nation Address as well is that we have now got to rebuild
a whole range of institutions with the right kind of leadership and management and
integrity that will ensure that they actually serve the country as they are supposed to.
As opposed to the kind of new dawn that the President speaks of and which
we support and which was beginning to gain traction and create a level of hope and
confidence in our country. We also regrettably are seeing this fight back phenomenon
which I have described repeatedly, which is now becoming I would suggest Chair
dangerous, because it is now attacking the Commission. It is now attacking people
appearing before the Commission. It is now attacking families of people appearing before

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the Commission. A point that I will come to and what we are seeing is not just the politics
of distraction we are also seeing a very practical manifestation of something I was taught
in the early 1970's by a much older political leader and that phenomena is my enemy's
enemy is my friend and so all sorts of new alliances are being drawn partly in order to
attack this process and stop the revelations that would uncover what individuals are up
to, but also significantly so that it would assist in the elections that are coming in 2019 as
well. Some amongst the people who are engaged in this of course have aspirations that
they will become the President or the Deputy President and when you have a very loose
political foundation and probably no principles at all to back up what one is engaged in
then anything goes in the politics and one I think needs to be careful about their attempts
to obstruct the clean-up process, to allow the looting to actually continue and allow for
uncontrolled access to resources and for their personal ambitions to actually be
materialised and I am sure that the Commission will look into the kind of attacks that
officials of the Commission are being subjected to as well and government I am sure will
share your concerns in that particular regard.
I make reference to the fact that the people appearing before you, Chair but
before I get there we also pointed out the key features of state capture as per the
hypothesis painted in the Betrayal of the Promise document and I want to suggest that
even in our presentation there is sufficient evidence to begin to put a picture together.
Certain if you look at the Eskom instance in a more concrete sense to fill those
boxes that were appearing in the diagram in the attachment that we had to indicate who
was in control and command of this project, what were the roles played by members of
the executive or boards or officials in departments or executive managers particularly
those who had positions like CEOs and CFOs within that kind of set of institutions.
The kind of activity they engaged in which focused on identifying what kind of

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procurement did each of these institutions undertake? What did the supply chain look
like and how could they intervene in that environment but more importantly where did the
pools of money lie? Where were the pools of cash in the state and as I indicated to you
they lie in procurement, they also lie in the treasuries of the big institutions and in advisory
services that are offered.
In a recent international conference there was an interesting slogan that
emerged. Capture is the name. Procurement is the game and it tells a lot about even
the global experience in this particular regard as well.
There is an area that we did not look at specifically in this context which is the
role of legal departments within SOEs who legitimise contracts and overlook certain
things that they are supposed to look at a lot more carefully which as the Commission
proceeds it could look at as well.
The other boxes were about advisors, facilitators and enablers and again the
roles of Bell Pottinger, KPMG, Trillian amongst many others you will see fit very easily
into those boxes in terms of enabling the processes of state capture and particular the
transmission of money out of institutions as well. So I would suggest that the key features
of state capture already appear fairly clearly in the evidence that you have before you
but I am sure you have a lot more that would assist you in this particular regard.
I just want to end on two notes. The first is to make reference to the fact that
witnesses appearing before the Commission like myself are quite willing to be attacked
politically, quite willing to be criticised politically, quite willing to be corrected if we
presented wrong evidence but it would be very nice if our critics come forward under oath
and present themselves before this Commission.
What I am sure you would agree, Chair is unacceptable is attacks on families.
So yesterday while we were here but even before yesterday there were a whole lot of

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wrong information about my daughter that was put out in the public domain and I want to
put forward the following for the record.
1.

This information about my daughter is for the public to
understand that she has not engaged in any malfeasance
of any kind.

2.

She joined Investec Bank Limited the private equity division
in 2007 and resigned in late 2017.

3.

Most financial service institutions as many in this room
would know invest capital either their own money or third
party investor money in emerging privately owned
businesses.

4.

The private equity division at Investec invested in privately
held companies on behalf of Investec Bank Limited not on
her own behalf.

5.

Investec that is the bank concerned and it could be any
other name therefore is the owner of the shares that they
buy not my daughter. It is the bank that owns that share of
these private businesses. She was an employee in this
division and part of a team of 12 private equity professionals
who were appointed as non-executive directors to the
boards of these companies as a representative of Investec
as the owner of the shares.

6.

Private equity professionals from this team represented
Investec on the boards of each company. It is not her
money. Their job is to look after the money of the bank and

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the investors. In other words employees of the bank like
employees of the public investment corporation who invest
in companies, what shall we call it, nominated onto boards
of those companies to ensure that the governance is right
and the money is actually secure. That is the same practice
that I am describing here as well. This then – this investing
process then helps smaller businesses to grow and create
jobs. So private equity is an important contributor if it is
done the right kind of way.
7.

She did not benefit financially in any way. That is her own,
she did not own any shares in these businesses directly and
did not benefit from any directive fees. The fees go to the
bank not to her or the employee or other financial
compensation from these companies. The benefits went to
the bank and its investors.

8.

She was not a member of the management or executive
teams of these businesses.

9.

None of the directorships of my daughter held were in her
personal capacity and were always on behalf of her
employer as I indicated.

10. The allegations of using the relationship with myself to get
access to government tenders to benefit these companies
is a blatant lie and these dangerous and unfounded
allegations have been made to intimidate and harass my
family and myself.

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11. She does not have any bank accounts in Canada and for
the record nor do I and has not had any financial interest in
Canada either. She went there to do a banking course at
some stage.
12. My daughter has not done any business with the state.
So I want to repeat the fact that let us not play the man as they say play the
ball. If there are political objectives that anybody wants to achieve well come to me and
direct your attention to me and I will answer for whatever I have to answer for.
Do not choose vulnerable targets because that means, Chair that the
witnesses are going to be extremely hesitant to appear before you if we allow these
processes to continue without any opposition.
The last point is two quotations and one other, Chair from President Mandela
because part of what is going on is the dissent to racism that we are seeing unfolding in
this country as a cheap political mechanism to launch attacks and I quote President
Mandela when he says:
"I detest racialism because I regard it as a barbaric thing whether
it comes from a black man and I imagine woman or a white man
or woman."
The second quotation:
"There is no easy walk to freedom anywhere and many of us will
have to pass through the value of the shadow of death again and
again before we reach the mountaintops of our desires."
So these are timely I think reminders to us that the challenges that we face as
a country are quite formidable and not going to be easily overcome. There is one very
well-known poem that I end on, Chair which is following on what you said to others to

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come forward and take the stand so to speak and make a contribution to your project tha t
you have been assigned which I am sure many of you might be familiar with.
"First they came for the socialists and I did not speak out
because I was not a socialist. Then they came for the trade
unionists and I did not speak out because I was not a trade
unionist. Then they came for the Jews and I did not speak out
because I was not a Jew. Then they came for me and there was
no one left to speak for me."
And hopefully we do not get there. Thank you.
CHAIRPERSON: Thank you very much. Thank you very much, Minister. I think what
remains is for me to say one is looking at some of the things that are happening and
some of the things that have been said and one is looking into that in order to decide
what should be done.
It is – there can be no doubt that within the country one can find certain people
who would not like this Commission to be there, who would not like this Commission to
continue, who would not like this Commission to succeed and then one will find also many
people who want this Commission, who want this Commission to succeed and who want
this Commission to be given enough space to do its job for the nation properly and indeed
as I have said in the past my own experience through interaction with ordinary people in
our country is that a very large section of our society has full support for this Commission
and the work that people involved with this Commission are doing.
They have an appreciation of the sacrifices that are being made. They speak
about – they express concerns about our safety and they are very concerned but we are
– we are quite clear that there is a job to be done for the country and we will do it.
We accept that in doing so there are certain risks but we will do the job and

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we will not be deterred. I hope that really nothing that is done or said by anybody will be
allowed to deter people who want to come forward and assist this Commission and of
course the Commission will look at what itself can do to make sure that people continue
to feel free to come forward but thank you very much.
We may ask you to come back at some stage if – because I understand that
there are implicated parties who wish to be granted leave to cross-examine you. I have
not been given any complete application in that regard so I will make a decision in regard
to each application once it is before me but then proper arrangements would be made
for you to make yourself available again but thank you very much.
MINISTER PRAVIN GORDHAN: Thank you, Chair. My apologies to the legal team and
Mr Fuzile. I have been keeping him waiting from 10:00 this morning.
CHAIRPERSON: Okay but thank you for your time and you referred – I just mentioned
this and maybe the legal team may or may not have talked to you about it. You referred
to having come here voluntarily and referring to certain processes.
I just want to indicate that there is no doubt about you having come here
voluntarily and whatever processes might have happened they should not detract from
that. Thank you very much. You are excused.
MINISTER PRAVIN GORDHAN EXCUSED
CHAIRPERSON: I see Mr Pretorius that we are at nine minutes to one o'clock.
ADV PAUL PRETORIUS SC: Yes Chair. There remains one matter that should not take
a vast amount of time and in the interest of the witnesses and the evidence leaders who
are going to lead them this afternoon perhaps we could deal very briefly with the
condonation application. You have it before you. The notice of motion sets out the relief
required and that is at index page one, but the content is at page two.
CHAIRPERSON: Yes.

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21 NOVEMBER 2018 – DAY 27
ADV PAUL PRETORIUS SC: And it asks you to condone the late issue of rule 33 notices
to the persons listed in subparagraphs 2.1 to 2.8 there has been service albeit by e-mail
but acknowledged to all those persons or their legal representatives and there is no
opposition. We have had discussions with legal representatives not with all, but with
some and the application for condonation is not opposed. I do not know if you want me
to go into any detail further than that seeing that the matter is not opposed, but at
page...[intervenes]
CHAIRPERSON: No, I, well I read the papers last night. You might just emphasise if
there is anything you want to emphasise, but if all relevant persons were served and they
are not opposing then subject to whatever else you might say I would be inclined to grant
condonation.
ADV PAUL PRETORIUS SC: Thank you. If I may just point out that the parties were
entitled to 14 days’ notice. Five of them received 12 days’ notice and three of them 11
days. They have recourse to the rules in relation to any prejudice they may have suffered.
They do not intend to seek that recourse. So in that respect subject to one matter which
I would like to raise before you I ask for the relief set out in the notice of motion on behalf
of the legal team. Present today Chair is Advocate Sibisa Mogale who is led by Advocate
Mpofu to represent Mr Moyane. Also present is Phillip Mahlatsi who is led by Advocate
Semenya who is here to represent Shaun Abrahams. Their position is similar. They say
to the legal team that they intend once fully informed to apply for cross-examination.
Amongst other things they require time to study the transcript of evidence, which went
understandably far wider than the text of the statement with which they have been served
and although they do not oppose the application for condonation they will in due course
seek rights to cross-examine before you and to the extent necessary apply for
condonation.

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21 NOVEMBER 2018 – DAY 27
CHAIRPERSON: Okay thank you.
ADV PAUL PRETORIUS SC: They may want to confirm that Chair.
CHAIRPERSON: Yes okay.
SPEAKER: Chairperson...[intervenes]
CHAIRPERSON: Yes?
SPEAKER: Thank you very much. Chairperson we do indeed confirm the contents of
what has been said by Pretorius SC. In fullness of time they will then be in a position to
come back and say this is our position. I am not certain at this stage subject obviously
to proper consultation with my client will then be able to make an election as I have stated
on Monday, but as matters stand, thank you Chairperson.
CHAIRPERSON: Thank you very much.
ADV SIBISA MOGALE: Chairperson my name is Sibisa Mogale. As Mr Pretorius
confirmed I with my leader Mr Mpofu for Commissioner Tom Moyane. I indeed confirm
that that is the case. It will be seek in an application to cross-examine Minister Gordhan
and that we will be seeking condonation given the fact that we will be late in filing our
application.
CHAIRPERSON: Okay, no that is fine. Thank you very much. You have nothing further
to say on the condonation application Mr Pretorius?
ADV PAUL PRETORIUS SC: No Chair. At page two is the order that is sought.
CHAIRPERSON: Sorry?
ADV PAUL PRETORIUS SC: The order that is sought is at page two of the paginated
papers.
CHAIRPERSON: Well it starts at page one is it not? On mine it starts on page one and
goes on to two.
ADV PAUL PRETORIUS SC: Your microphone Chair.

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21 NOVEMBER 2018 – DAY 27
CHAIRPERSON: It starts at page one and goes on to two. Do we have the same thing?
ADV PAUL PRETORIUS SC: Perhaps not Chair, but perhaps we should refer to
paragraphs then.
CHAIRPERSON: Well maybe let me tell you what I have. Page one is the following
order that is asked for is one, granting condonation for the failure to timeously issue
notices in terms of Commission rule 3.3. Two, persons implicated by the evidence of Mr
Nhlanhla Nene.
ADV PAUL PRETORIUS SC: Gordhan, yes.
CHAIRPERSON: This one...[intervenes]
ADV PAUL PRETORIUS SC: That order in itself would be sufficient. It is just in more
detail in paragraph two.
CHAIRPERSON: But am I having the right one then?
ADV PAUL PRETORIUS SC: Well that is exactly the one that I am looking at. Perhaps
on a different page.
CHAIRPERSON: This one I am reading says Nhlanhla Nene.
ADV PAUL PRETORIUS SC: No, no but then you have the wrong one.
CHAIRPERSON: But has that one, has that one been granted?
ADV PAUL PRETORIUS SC: That is to be granted at a later stage.
CHAIRPERSON: Okay.
ADV PAUL PRETORIUS SC: That is a different application with different considerations.
CHAIRPERSON: Okay. Well there are some files here which are not marked on the
spine. This is the only one that is marked on the spine that says condonation application
bundle. Are there two in the same bundle? Two condonation applications in the same
bundle?
ADV PAUL PRETORIUS SC: They should not be they should be separate bundles. May

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I hand you this up?
CHAIRPERSON: Yes please. Well I have now found one of the affidavit, one of the lever
arch files that is not marked on the spine what it is for looks similar to the one that I have
just been handed.
ADV PAUL PRETORIUS SC: Yes.
CHAIRPERSON: But the one that I have been handed from you is written on the spine
application for condonation Minister Pravin Gordhan.
MINISTER PRAVIN GORDHAN: Yes.
CHAIRPERSON: Or the implicated persons, but this one does not have any writing on
the spine at all.
ADV PAUL PRETORIUS SC: My apologies for that.
CHAIRPERSON: And I think there is one other lever arch file that is not written. So I
think somebody needs to make sure that they are properly written or marked so that I
can...[intervenes]
ADV PAUL PRETORIUS SC: We will make sure in future Chair.
CHAIRPERSON: Yes.
ADV PAUL PRETORIUS SC: My apologies. The index is a little intimidating but a little
further on you will find page one notice of motion.
CHAIRPERSON: Yes, but basically the non-compliance or the delay in serving the
notices was a matter of two, three or five days.
ADV PAUL PRETORIUS SC: Two to three days.
CHAIRPERSON: But nothing more than that. Nothing more than that.
ADV PAUL PRETORIUS SC: Nothing more than that.
CHAIRPERSON: Yes.
ADV PAUL PRETORIUS SC: And no opposition nor any recourse to rule 3.5 by

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implicated parties.
CHAIRPERSON: Okay, all right. No, thank you.
ADV PAUL PRETORIUS SC:

As I say Chair the index is reasonably

intimidating...[intervenes]
CHAIRPERSON: Yes...[intervenes]
ADV PAUL PRETORIUS SC: But after the index you will find the notice of motion and
may I refer you to page two?
CHAIRPERSON: Yes. No, I am ready to grant the order.
ADV PAUL PRETORIUS SC: Thank you Chair.
------------ORDER
I grant paragraphs 1 and 2 of the prayers in the notice of motion at page two
thereof.
------------ADV PAUL PRETORIUS SC: Thank you Chair.
CHAIRPERSON: So we will take the lunch adjournment now and resume at two.
ADV PAUL PRETORIUS SC: Yes.
CHAIRPERSON: We...[intervenes]
ADV PAUL PRETORIUS SC: Advocate Maleka will lead Mr Fuzile.
CHAIRPERSON: Okay thank you.
ADV PAUL PRETORIUS SC: Thank you Chair.
CHAIRPERSON: So we will now take the lunch adjournment and we will resume at
14:00. We adjourn.
HEARING ADJOURNS
HEARING RESUMES

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CHAIRPERSON: Miss Norman?
ADV THANDI NORMAN SC: Thank you Mr Chairman. Mr Chairman might I before the
witness is sworn in, the next witness Mr Lungisa Fuzile, might I bring the application for
condonation for the late filing of the notice, 3.3 notices.
CHAIRPERSON: In respect of?
ADV THANDI NORMAN SC: It is in respect of the four implicated persons Mr Bobat, Mr
Whitley, Mr Des Van Rooyen and Mr Mabaso. Might I also mention Mr Chairman that
they are represented. My learned friend Mr Masuku and Mr Denga they are present.
CHAIRPERSON: But I have not read those.
ADV THANDI NORMAN SC: I delivered the bundle.
CHAIRPERSON: No arrangement was made that the application would be brought or
moved now at this time that I know of.
ADV THANDI NORMAN SC: As the Chairperson pleases.
CHAIRPERSON: Have I misunderstood anything?
ADV THANDI NORMAN SC: I...[intervenes]
CHAIRPERSON: We normally arrange to say when will the application be moved then I
give approval then I am expecting it to be moved at that time so I know that I have to look
at the papers before that time.
ADV THANDI NORMAN SC: Maybe that was then not communicated properly when the
bundle was delivered to the Chairperson yesterday.
CHAIRPERSON: I certainly have, I certainly have seen a bundle.
ADV THANDI NORMAN SC: Yes.
CHAIRPERSON: But as you may have heard earlier on when Mr Pretorius was moving
the application for condonation in respect of implicated persons who are implicated in
Mr Gordhan's statement. As you heard I had here another condonation application

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relating to Mr Nene which has not been moved yet.
ADV THANDI NORMAN SC: Yes.
CHAIRPERSON: But it is there.
ADV THANDI NORMAN SC: Yes.
CHAIRPERSON: So he told me that and you would have heard that...[intervenes]
ADV THANDI NORMAN SC: Yes...[intervenes]
CHAIRPERSON: It is separated.
ADV THANDI NORMAN SC: Yes.
CHAIRPERSON: It will be dealt with.
ADV THANDI NORMAN SC: Separately.
CHAIRPERSON: Separately.
ADV THANDI NORMAN SC: Yes. If the Chairman...[intervenes]
CHAIRPERSON: So I certainly did receive some papers, but in terms of when that will
be moved...[intervenes]
ADV THANDI NORMAN SC: [Indistinct].
CHAIRPERSON: That I have not, I am not aware that it was to come now.
ADV THANDI NORMAN SC: May it then stand down then we arrange a date for that
application?
CHAIRPERSON: Yes. Is it unopposed?
ADV THANDI NORMAN SC: It is unopposed. All the parties, the implicated persons
they are represented and they are not opposing the application.
CHAIRPERSON: Yes, okay no let us deal with it tomorrow.
ADV THANDI NORMAN SC: Yes.
CHAIRPERSON: Let me read those papers, because I have not read those papers.
ADV THANDI NORMAN SC: As you please.

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CHAIRPERSON: Thank you.
ADV THANDI NORMAN SC: Thank you.
CHAIRPERSON: Mr Maleka?
ADV VINCENT MALEKA SC: Chair good afternoon.
CHAIRPERSON: How are you?
ADV VINCENT MALEKA SC: I am well Chair, but not as well as I could after the
captivating closing remarks of Minister Gordhan.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And Chair I hope that the next round of witness evidence
we are going to present to you in the next two days would not be anticlimactic and
forceless in the light of Minister Gordhan's captivating evidence particularly his reference
to the well-known work and poem of Professor Nimola the famous German Theologian
and activist of the time who opposed the Nazi regime and chose to speak when many
felt it was appropriate to remain silent.
It is a task that we [indistinct] before you to encourage so many others of our
people to do right by speaking and not repeat the mistake Professor Nimola warned his
compatriots at the time. Chair, we would prefer to present the evidence of three National
Treasury witnesses with reference to the terms of reference paragraph 1.8 which centres
their evidence.
You would recall that it is that part of the terms of reference that deals with the
arrival of then Minister Van Rooyen at National Treasury together with certain individuals
who sought to strong arm officials of National Treasury by imposing or purporting to issue
instructions to them when they had not yet been properly and lawfully appointed as
directors in terms of the relevant provisions of section 12 (a) of the Public Service Act
read together with a special dispensation prescribed by Cabinet that Mr Fuzile will deal

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with.
So although all of them will deal with that part of the terms of reference some
of their evidence especially that of Mr Fuzile might well traverse to the terms of reference
in paragraph 1.1 to 1.3 that you are currently dealing with in this phase one of the
proceedings especially insofar as that evidence deals with the various Ministers of
Finance who came in and out at the door of National Treasury about which he will testify
and Chair we would prefer to present that evidence by identifying the data set that we
will canvas with the witnesses and that we would ask you to have ready at hand so that
there is not some miscommunication or confusion about what that data set A is.
So if I may indicate to you what the data set is, Chair and I am aware that your
Registrar conveyed to us that you do not want clutter on your desk as we present the
evidence.
CHAIRPERSON: Yes. I mean some references you might make – may require that I
have a look at the relevant pages.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Others we can do without me having had to have a look.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: But you would know which ones are really important for me to have a
look at.
ADV VINCENT MALEKA SC: Indeed, Chair.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: As best as I can I will indicate when it is important for you
to turn to the relevant page of the data set and I will do so of course by also inviting Mr
Fuzile to do so because he will be speaking from first-hand knowledge in regard to the
cross section of the documents in the different files.

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So just to identify them, Chair and also for Mr Fuzile the first will be EXHIBIT
A which we now know it is the Public Protector's report that is the basis of the term of
reference which is paragraph 1.8. You need not go there at the moment, Chair. I simply
identify...[intervenes]
CHAIRPERSON: I am just making sure that I have the right file in front of me that should
be in front of me right now. Earlier on I had a bundle with Ms Phumla Williams' evidence
which you might refer to in due course really is not of immediate importance.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: The one that I now have is EXHIBIT P.
ADV VINCENT MALEKA SC: EXHIBIT B.
CHAIRPERSON: No, P for Patrick.
ADV VINCENT MALEKA SC: Yes we will get to P in a moment, Chair.
CHAIRPERSON: Yes but yes it is not the one that I should have immediately?
ADV VINCENT MALEKA SC: Not yet but really the point of reference...[intervenes]
CHAIRPERSON: The one that I should have I assume would have Mr Fuzile's statement
and so on. Where is it?
ADV VINCENT MALEKA SC: That is EXHIBIT P.
CHAIRPERSON: Is that EXHIBIT P?
ADV VINCENT MALEKA SC: Yes we will get to it in a moment.
CHAIRPERSON: Oh okay. All right.
ADV VINCENT MALEKA SC: For now it can be on your desk.
CHAIRPERSON: Okay.
ADV VINCENT MALEKA SC: And you do not have to it at the moment.
CHAIRPERSON: Yes. All right.
ADV VINCENT MALEKA SC: I have identified EXHIBIT A. In fact it should be EXHIBIT

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B which is the Public Protector's Report because you will recall, Chair that in her report
she said time and resources did not permit her to engage in that complaint that was
unanimously lodged before her but found some level of prima facie course of
investigation in the light of various media reports and then the next data set, Chair that
we would ask you to have in mind is EXHIBIT F which is Ms Williams' statement and
bundle of evidence that was usefully canvassed by our learned colleague Ms Hofmeyr
when she led Ms Williams.
The importance of that bundle, Chair is that it comprises legislative
instruments that govern how public officials and advisory individuals to Ministers are
appointed and that bundle also contains regulations that deal with the specimen contracts
that are executed by persons employed in the public service.
One of the references in that bundle will be section 12 (a). Although Mr Fuzile
in his statement quotes that section we would prefer to refer you to the official version of
it to make sure that we are not criticised for following blindly possible typos in his
quotation.
Chair, the next bundle will be EXHIBIT N and we would refer to EXHIBIT N1
and its accompanying bundles that Mr Pretorius has identified as A to F. We would recall
that is a set of documents that Minister Gordhan canvassed.
You would recall that at different stages of his evidence Minister Gordhan
indicated that Mr Fuzile might well give you more evidence on aspects that he
foreshadowed. I doubt that Mr Fuzile would do so fully now because he indicates quite
clearly in his statement that for the present purposes he is here to assist you on term of
reference in paragraph 1.8.
But of course he is free to indicate whether or not he will be able to help you
now or later on matters that Minister Gordhan has identified and then, Chair there will be

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reference to N2 which is the supplementary bundle prepared for the purposes of Minister
Gordhan.
It is important, Chair, because in it he references two most important items.
The one is the statement of a whistleblower. I will not mention her name but with
reference to that evidence you enquired from Mr Pretorius whether or not the legal team
and or the investigators of the Commission have sought to obtain a statement of some
sort from the whistleblower.
Chair, we can confirm now that indeed the investigators have in the light of the
crucial information volunteered by the whistleblower. We present that statement to you
together with its annexures as EXHIBIT R. To the extent possible, Chair I will canvas
elements of EXHIBIT T with Mr Fuzile to establish firstly whether or not National Treasury
for as long as he was there had become aware of the information volunteered by the
whistleblower?
If so what did they do about that information?

Did they conduct any

investigation and if so what is the result of that investigation? Chair, Minister Gordhan
also referenced other matters in relation to the possible abuse of the South African
currency market by individuals who may have gained prior confidential information about
the possible dismissal of Minister Nene and there is some reference in the bundle that
was presented SN2 of one individual who may have made money as a result of being
armed confidentially with that information.
In the financial markets, Chair you would recall that that type of secret
information will be identified and regarded as insider trading open to prosecution. The
evidence of Mr Gordhan in that regard was that the Commission must begin about the
process of recovering those illicit gains.
I will refer to part and parcel of EXHIBIT N to test with Mr Fuzile whether or

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not there is any semblance of truth insofar as he is concerned about those allegations.
Again it is a matter that Minister Gordhan left for him to educate us to the extent possible.
Against the background of that data set, Chair may I ask your Registrar to
administer the oath for Mr Fuzile?
CHAIRPERSON: Thank you.
REGISTRAR: Please state your full names for the record.
MR LUNGISA FUZILE: I am Lungisa Fuzile.
REGISTRAR: Do you have any objection with taking the prescribed oath?
MR LUNGISA FUZILE: No.
REGISTRAR: Do you consider the oath to be binding on your conscience?
MR LUNGISA FUZILE: Yes.
REGISTRAR: Do you swear that the evidence you will give will be the truth, the whole
truth and nothing but the truth if so please raise your right hand and say so help me God.
MR LUNGISA FUZILE: So help me God.
MR LUNGISA FUZILE (duly sworn, states)
CHAIRPERSON: Thank you.
ADV VINCENT MALEKA SC: Chair, now is the time to ask you to admit the bundle which
has been marked as EXHIBIT R as an exhibit before you. Sorry, EXHIBIT P.
CHAIRPERSON: The bundle – well before we do that should this bundle not be starting
with Mr Fuzile's statement? Why do we need the condonation application to be there as
well? Is it not just going to be increasing a lot of paper unnecessary because the
condonation application something we deal with now and we put aside and we may never
have to go back to it but the witness's statements and annexures to those statements will
need to be read from time to time but...[intervenes]
ADV VINCENT MALEKA SC: Chair, if I may...[intervenes]

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CHAIRPERSON: I think condonation applications should really be separated because
after they have been dealt with they will hardly need to be looked at after this.
ADV VINCENT MALEKA SC: Yes. Chair, if I may provide some explanation on behalf
of those who packaged this bundle and suggest a middle ground. The condonation
application was put up front and indexed from page one because it relates to the witness
statements which follow thereafter and then you will see that at the end of the bundle
there is reference to the notices that have been served on several implicated parties.
It has been packaged in this perhaps complex form to ensure that it will be the
only bundle that relates to the witnesses from National Treasury, the implicated persons
from their statements as well as their applications for condonation.
That is why it has been sequentially paginated from one to the end and you
will see that each of the statements is accompanied by an index of its own. So for
instance if you are at page one of the bundle you will see that there is an index of the
application for condonation from page one to the end.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And then the next you will see that is the statement of Ms
Phumza Macanda.
CHAIRPERSON: Yes?
ADV VINCENT MALEKA SC: Which begins at page 20.
CHAIRPERSON: Probably what I said or I should have said should the bundle not have
started with that statement of Ms Macanda because I see it is there and there is
the...[intervenes]
ADV VINCENT MALEKA SC: Index.
CHAIRPERSON: There is the other statement of...[intervenes]
ADV VINCENT MALEKA SC: Yes.

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CHAIRPERSON: Mogajane as well.
ADV VINCENT MALEKA SC: It starts at page 44.
CHAIRPERSON: Excuse me. So I guess that I expected, excuse me, I expected Mr
Fuzile's statement him being the first of the three to give evidence to be at the top.
ADV VINCENT MALEKA SC: Indeed.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: Indeed and you will find in the bundle as we have it the
statement of Mr Fuzile from page 54.
CHAIRPERSON: Yes. Yes.
ADV VINCENT MALEKA SC: So that those who packaged it worked in reverse.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: And let me apologise for them.
CHAIRPERSON: Yes.
ADV VINCENT MALEKA SC: But may I proceed on the basis of the bundle as prepared,
Chair?
CHAIRPERSON: No, no that is fine. You may proceed. So it is only about what 19
pages or so that relate to the condonation application.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: Yes okay. All right. You may proceed.
ADV VINCENT MALEKA SC: Thank you, Chair. Mr Fuzile I hope that you followed
some of the introductory remarks that I have made. I have made them not in terrorum
but simply to try and place context to a number of questions that I am going to put to you
and let me place on record that although you may have consulted of course through your
legal representatives with some of my colleagues I certainly have not consulted with you,
is that correct?

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MR LUNGISA FUZILE: That is true.
ADV VINCENT MALEKA SC: So that the first time you are going to hear questions from
me about your testimony will be today, am I right?
MR LUNGISA FUZILE: Yes. That is true.
ADV VINCENT MALEKA SC: You have several bundles before you. Can I ask you to
place the bundle before you especially on your right because it will be the bundle that I
will refer to from time to time, the one which is marked EXHIBIT P.
It contains your statement together with those of your ex colleagues. Can I
ask you to turn to page 55 of the bundle?
CHAIRPERSON: While Mr Fuzile is doing that Mr Maleka we did not complete what we
needed to do or I needed to do because of the query about the inclusion of the
condonation application here.
ADV VINCENT MALEKA SC: Yes.
CHAIRPERSON: So the bundle that contains among others the statement of Mr Lungisa
Fuzile and Ms Phumza Macanda will be marked EXHIBIT P.
ADV VINCENT MALEKA SC: Thank you, Chair.
CHAIRPERSON: Thank you.
ADV VINCENT MALEKA SC: Mr Fuzile, I had asked you to go to your statement which
begins at page 55. Are you there?
MR LUNGISA FUZILE: Yes, sir.
ADV VINCENT MALEKA SC: That is the table of your statement which begins at page
56 and runs up to page 75. Can I ask you to immediately turn to page 75?
MR LUNGISA FUZILE: I am there.
ADV VINCENT MALEKA SC: You will see that there is almost in the end of the top half
of that page your name and above it there is some signature. Whose signature is that?

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MR LUNGISA FUZILE: It is my signature.
ADV VINCENT MALEKA SC: And there is a date below. Can I ask you to identify that
date?
MR LUNGISA FUZILE: The date is 16 November this year.
ADV VINCENT MALEKA SC: Do you confirm that that is the date on which you signed
that statement?
MR LUNGISA FUZILE: Yes.
ADV VINCENT MALEKA SC: In reverse can you go back to page 56?
MR LUNGISA FUZILE: I am there.
ADV VINCENT MALEKA SC: Can I clear some few elementary issues about your
statement beginning from page 56. You have had an occasion to read this statement
before you took the witness box this afternoon, correct?
MR LUNGISA FUZILE: Yes.
CHAIRPERSON: Do you confirm that the contents of the statement which you have read
before are correct or is there any aspect of it that you would wish to correct before we
get to the contents of it?
MR LUNGISA FUZILE: Chair, there is only one thing on the next page.
CHAIRPERSON: Is that page 57?
MR LUNGISA FUZILE: Page 57.
CHAIRPERSON: Yes?
MR LUNGISA FUZILE: Paragraph 11 should be deleted.
CHAIRPERSON: Paragraph 11?
MR LUNGISA FUZILE: 11.
CHAIRPERSON: The whole of it?
MR LUNGISA FUZILE: The whole of it. It is a very short one line paragraph.

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CHAIRPERSON: Oh, okay. Thank you. I am sorry so 11 is one sentence actually.
MR LUNGISA FUZILE: Yes.
CHAIRPERSON: Yes okay.
MR LUNGISA FUZILE: Now subject to that deletion do you confirm that the statement
as read is correct to the best of your knowledge and belief?
MR LUNGISA FUZILE: Yes, Chairman.
ADV VINCENT MALEKA SC: The next elementary thing that I would like to raise with
you although you deal with it in the first three paragraphs of your statement is your
background. I understand from your statement that you have been invited by the
commission to prepare this statement and that you have a long story to tell about your
involvement in National Treasury and allegations of state capture that are presently being
investigated by the Chairperson, correct?
MR LUNGISA FUZILE: That is correct.
CHAIRPERSON: But for now and for the purposes of your present statement and
testimony you have elected to confine yourself to paragraph 1.8 of the terms of reference
at the request of the Commission's legal team, correct?
MR LUNGISA FUZILE: That is true. I have confined myself to 1.8.
CHAIRPERSON: Before you proceed Mr Maleka maybe I should just say Mr Fuzile that
thank you for coming forward. As you would definitely know we have been asking more
people particularly the executive past and present and former DG's and current DG's who
have information about what we are investigating to come forward and such matters as
you might which to tell the Commissioner about which you might not be able to tell the
Commission about.
At this stage we certainly are interested in those if they fall within the terms of
reference of the Commission and in due course we will be very happy to have your

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evidence in regard to all those other matters.
ADV VINCENT MALEKA SC:

And Mr Fuzile you heard a number of times the

Commission making an appeal to a number of witnesses who have testified that they
should make themselves available even though they may have completed the current
phase of their testimony and I know now that you are now in the private sector
employment.
That it would not be too inconvenient for you when the Commission request
you to come back to complete your story about your involvement in National Treasury
and allegations of state capture to the extent that you will be able to contribute. Is that
fair?
MR LUNGISA FUZILE: Chair, it might be inconvenient but if it has to be done I will do it.
I say this on the presumption that there would be reasonableness in terms of time allowed
to prepare a proper detailed statement on whatever matters that I would like to ventilate
with the Commission and of course – of course allowing me also reasonable time in terms
of the date that is set bearing in mind that the Commission does not have a century to do
its work.
ADV VINCENT MALEKA SC: Indeed and we keep on learning as we march along and
we will avoid previous inconveniences that it may have caused you for which I frankly
would apologise to you.
MR LUNGISA FUZILE: I accept your apology an may I say on three – paragraph three
of the statement I do signal the willingness to avail myself should the Commission invite
me to come and tell the story on other aspects beyond paragraph 1.8 of the terms of
reference.
ADV VINCENT MALEKA SC: Thank you, Mr Fuzile. The next elementary matter of
background that you deal with and by the way let me interrupt myself. I am not going to

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ask you to read each and every paragraph of your statement.
I will identify various paragraphs simply as a signal to tell you where I am but
if you choose to read either as a matter of emphasise or as a matter of public record any
aspect or paragraph of your statement please do so. Feel free to do so.
The next elementary matter of background that you deal with begin from
paragraph four of your statement at page 56 and you start by indicating your employment
in Treasury but before we get there can I ask you your formal qualifications? What formal
qualifications if any do you have?
MR LUNGISA FUZILE: I studied Commerce. I majored in economics and industrial
psychology, proceeded to study a qualification in education as a teacher before I went
on to study economics at a post graduate level graduating with a Master of Commerce
degree in economics at the University of Natal. I think it was 1997 and of course beyond
that I have done courses in management, in finance, some with certificates, others
without certificates. I also consider myself to be qualified in farming actually.
ADV VINCENT MALEKA SC: In farming?
MR LUNGISA FUZILE: Yes.
ADV VINCENT MALEKA SC: Are you a farmer at the moment?
MR LUNGISA FUZILE: I am learning and I am getting better every day.
ADV VINCENT MALEKA SC: Yes.
ADV VINCENT MALEKA SC: Chair you and I have a hard road to follow.
CHAIRPERSON: Well just for the sake of completeness Mr Fuzile what you have said
suggest maybe that your first degree was BCom?
MR LUNGISA FUZILE: Yes Chair
CHAIRPERSON: Yes and after the BCom you did M.Com.
MR LUNGISA FUZILE: Higher diploma in education to be precise Chairman.

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CHAIRPERSON: Yes, yes.
MR LUNGISA FUZILE: And then I did honours in economics and then Masters in
economics.
CHAIRPERSON: Okay, thank you and do you intends getting any formal qualification
farming?
MR LUNGISA FUZILE: I have paid my tuition fees in the practical work that I have been
doing since I was a little boy.
CHAIRPERSON: Okay.
MR LUNGISA FUZILE: At my father's feet.
CHAIRPERSON: Okay. Hopefully that will make you relax and you can give your
evidence properly. Thank you.
MR LUNGISA FUZILE: Thank you Chair.
CHAIRPERSON: Mr Maleka?
ADV VINCENT MALEKA SC: Thank you Chair and then you indicate in paragraph nine
of your statement at page 57 that you left National Treasury in 2017. Do you recall which
month of 2017 did you leave National Treasury?
MR LUNGISA FUZILE: Yes Chairman my last day was the 17 th of May if I remember
correctly a Monday. In March this year. Last year pardon me.
ADV VINCENT MALEKA SC: Yes and you say before you left in May 2017 you had been
in National Treasury for a full 19 years.
MR LUNGISA FUZILE: That is correct.
ADV VINCENT MALEKA SC: On my elementary mathematical calculation it means that
you ought to have joined National Treasury about 1998.
MR LUNGISA FUZILE: That is correct Chairman.
ADV VINCENT MALEKA SC: You have been there for almost a generation and some

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people would define you as part and parcel of the furniture of National Treasury before
you left.
MR LUNGISA FUZILE: I would hope good quality furniture Mr Chairman.
ADV VINCENT MALEKA SC: Mr Fuzile it is up to you and I know that you have deleted
paragraph 11 of your statement. Are you able and do you feel comfortable in disclosing
reasons to the Chairperson why you left National Treasury having been there as part and
parcel of the good furniture?
MR LUNGISA FUZILE: Certainly.
ADV VINCENT MALEKA SC: Could you please tell us why you left?
MR LUNGISA FUZILE: Perhaps the place to start Mr Chairman would be just the period
before May 2011 I had been a Deputy Director General in a division of the Treasury
called Assets and Liability Management. That is a division whose responsibility in
summary is or entails raising money. In other words borrowing which had been described
very eloquently here by my former boss Mr Gordhan which entails short-term borrowing
for just cash management purposes to breach cash flow shortfalls that might occur
between the inflows and revenues that people and businesses pay and of course the
outflows insofar as the expenditure of government relating to for an example salaries
transfers to provinces and local government in terms of their grants and so on and so
forth. We borrow for the purpose or we would borrow for that purpose in that division,
but also of course borrow just to finance the long-term, the annual shortfall between
revenue and expenditure which is to finance the deficit so to speak in technical terms.
That is the one leg of what that division was responsible for the other leg was the asset
management which is oversight over state owned entities, but at the same time taking
care of government's assets such as the cash that would be in the bank at any given
time. Being in that role my predecessor getting promoted in Mr Lesetja Kganyago who

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is the governor now, but he was promoted to become the Deputy Governor. So someone
had to take over the role of DG. I start here because I was very reluctant actually to take
the job. It is important for context to say this. So I, because I knew what the job entailed
that it is a very heavy job, difficult job and takes a lot of travelling, but at the same time
because it is a job that entails telling people stuff that they do not quite like to hear, which
is that there is no money to do sometimes good things that they would like to do. Of
course other times not so good things that people would want to do. So I was reluctant
and then I actually did not apply for the job and the due date for the submission of the
applications came and passed and I suppose when the people were looking through the
applications they were hoping to find mine there as well so that I would contest or
compete for the job like others, but I had not applied. So there was an extension of
reopening of this and some persuasion that was done by several people. I need not
mention their names and ultimately I yielded, took the job. Five years on my contract
was close to expiration. In fact it was not even five years on. 2015 December happened
which is the removal of Mr Nene and my contract was supposed to expire in May of the
following year and then one of the things that happened, I want to cut the long story short,
was that when Minister Gordhan was returned to Treasury one of the first things he said
I suspect he did not even greet me was that my return has got implications for your career
plans and I said to him...[intervenes]
CHAIRPERSON: I am sorry just repeat that?
MR LUNGISA FUZILE: He said my returning to Treasury as Finance Minister, as Minister
Gordhan has got implications for your career plans and I knew what that meant. Of
course we did not talk about that at the time. We joked and I said look we will talk about
it. Again to cut a long story short he then persuaded me to extend my contract and I said
look, I can only do two years at most, but I can guarantee giving you one year of my time.

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I said of course given the high turnover of Ministers of Finance I suspect that you will
most likely be my last Minister. So when we then returned from that road show to London
end of March in 2017 the writing was on the wall for me that Minister Gordhan's time as
Minister of Finance was up and I decided of course as I had indicated to him and the
team at Treasury, my colleagues, who had also been part of persuading me to stay a little
longer that my time at Treasury was up.
ADV VINCENT MALEKA SC: Yes. Mr Fuzile I can assure you that we will deal with the
ministerial revolving door of Treasury through which a number of Ministers came in and
out in detail because you expressed some strong views around it, but let me just clear
the record in relation to the evidence you have given relating to your appointment as the
Director General of National Treasury. You have now confirmed that you were recruited
to apply. Can I ask you when precisely were you appointed as the Director General of
National Treasury?
MR LUNGISA FUZILE: My career as DG commenced I think on the 16 th of May 2011. I
might be off by a day or just hours.
ADV VINCENT MALEKA SC: Yes. Let us work with the period of May 2011. Who was
the Minister of Finance at the time?
MR LUNGISA FUZILE: The Minister of Finance at the time was Minister Gordhan.
ADV VINCENT MALEKA SC: And his Deputy?
MR LUNGISA FUZILE: His Deputy at the time was Mr Nene.
ADV VINCENT MALEKA SC: All right and then Minister Gordhan has explained to us
the complex structure of National Treasury and the number of state institutions which are
subject to the oversight of National Treasury and monitoring of and the progress that is
being made of that strategy, down to the point of performance management insofar as
ensuring that my direct reports as the DG are up to speed and are appeased with the

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targets that we have promised to parliament and the nation for that matter through the
state plan, making sure that, that is in place.
So the issues for instance directing the department issuing instructions in the
department disciplining people, dealing with appeals to the extent that elements of that
disciplining may be delegated to lower levels, but the DG would still be one level of
appealing in the department and then of course it would be the Minister.
Financial management in the department making sure that at all times the
departments, the department, excuse me has got the resources that it needs to operate,
pay salaries, pay rent and all things relating to the operation to the department and of
course making sure that whenever there is a commitment that the department makes
there are resources to pay for that commitment.
And of course of relevance to today's conversation I do not know if I will be
jumping the gun…[intervenes]
ADV MALEKA SC: Yes, you will be jumping the gun, we will get there. Then pause
there, you deal with that specifically in your statement that I will canvas in some
reasonable detail, but for now I have a picture of what the main responsibility of the
Director General of National Treasury uniquely is.
Now can I ask you to go to paragraph 12 of your statement and I do so in the
context of the fact that like any Director General of the National Department you will be
supported by Deputy Directors who will be part and parcel of your executive
management. Now in paragraph 12 you mention some names and I would like to canvas
some of them with you for this simple reason, towards the concluding part of your
statement you talk about the conversation with the then Deputy Minister Jonas relating
to the conversation about who was targeted for exclusion from National Treasury, around
which you make some observation to state capture.

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It is in that context that I would like to canvas some of the names that you
reference in paragraph 12. Are you at paragraph 12?
MR LUNGISA FUZILE: Yes, I am, I am.
ADV MALEKA SC: Let us start with the name of Mr Ndondo Andrew Magayane. Can I
show you that we are going to call him tomorrow and he has agreed to testify. When you
were the Director General, at the point when the controversy around Mr Nene took place
what was his position at the time?
MR LUNGISA FUZILE: At that time, Chairman, Mr Magayana was the DDG for Public
Finance.
ADV MALEKA SC: Alright, and you mentioned the name of Mr Michael Sacks, who is
he and what was he at the time of National Treasury?
MR LUNGISA FUZILE: Mr Michael Sacks was the head of a division that deals with the
budget and it is called the budget office and I remember walking past the television at
work and I saw Mr Gordhan explaining the role of this office as you were saying Mr
Maleka, he did it quite well and I might just add at this point by the way that I think it will
be correct to say that one of the important jobs of the Treasury is to prepare a budget for
the country.
ADV MALEKA SC: Yes, you know we talk about this budget as some sophisticated
animal and I would like you to decode it for us in elementary terms that I and the
Chairperson, as lawyers, and maybe ordinary South Africans can understand. What is a
budget?
CHAIRPERSON: Before Mr Fuzile responds, can I confirm at the back that everybody
can hear Mr Maleka? Yes, okay thank you.
ADV MALEKA SC: Chair I will speak up.

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CHAIRPERSON: Sometimes I am struggling to hear you, and I am very close to you,
okay.
ADV MALEKA SC: I will speak louder and I hope that next time they put a speaker next
to you.
CHAIRPERSON: Thank you, you may proceed.
ADV MALEKA SC: This is the recommendation of improvement around the sitting that
we will make to you ahead of the many other important recommendations we will make
on the work of the Commission. But, I invited you to explain to us in lay terms so that we
too can understand the importance and significance of this complex animal called the
budget.
MR LUNGISA FUZILE: At the very highest level what a budget is, is an expression in
numbers of the aspirations and wishes of a nation as processed by the political leadership
that has been elected. What do I mean by this? When parties run to be elected by make
promises. We will do this in education, we will do this withheld, we will do this for security
and so on and so forth until that gets expressed through the allocation of resources that
the nation is able to mobilise and I will come back to what is involved in that mobilisation.
The promises are just up in the air.
They are statements of intent. It is only when there is then appropriation and
then of course the other laws that will go with it the division of revenue for example
between the threshold of government and that appropriation that I am referring to would
then say to give effect to the promise of security we will allocate these resources so that
more police men and women can be hired so that cars can be bought, petrol can be filled
in them, guns can be bought and of course the rest of the stuff that goes with law
enforcement can be done.

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That is what a budget does in the simplest terms. Of course if you start at the
highest level it is clear then that there must be policy priorities that a government sets for
itself and it is those policy priorities that must then guide the resource allocation process
that must be used to weigh one priority against the other, because if everything is a
priority then there is no priority in very simple terms.
Of course as it happens within a household, every household would wish to
have the best of everything, but most households can only afford so much, so again even
the national budget, once you have come from the highest level of policy intents and
priorities that a governing party wishes to deliver on then it must assess how much
resources it will be able to mobilise and there are in the main two resources of revenue
for government, in fact it is only one, but we confuse each other by saying two. It is taxes
and of course other revenues.
When you finance spending today through debt it is taxes of tomorrow,
because you have to pay back the tax. So budgeting then is about balancing, finding the
right balance between the wishes and aspirations and what you can actually afford. Of
course the ability to raise revenue in taxes is a function of the size of your economy, your
GDP and every component of it.
So the budgeting exercise is about that. If there is a specific think that you
wish to hold me on, I can do so quickly.
ADV MALEKA SC: Yes, I mean I understand now that a budget is an executive
authority's promise to the nation about the expected expenditure given policy priorities
as against the expected income and of course it is debated publicly, there is no secrecy
about it and we follow now, and then the debates in parliament, but ultimately it is
adopted, but the point in that exercise is this and I want you to reflect on it and help us
understand why that is the case?

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The product of a budget exercise and adoption involves National Treasury and
ultimately it is debated with the office of the President, correct?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: And therefore there cannot be any debate or confusion in any budget
cycle about what the nation can afford given the budget, is that correct?
MR LUNGISA FUZILE: That is correct.
ADV MALEKA SC: I assume from your answer that every…[intervenes]
MR LUNGISA FUZILE: Pardon me, pardon me, Chair. There ought not to be any debate
about what the nation can afford.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: But…[intervenes]
ADV MALEKA SC: Yes, thank you.
CHAIRPERSON: Sometimes there is you mean?
MR LUNGISA FUZILE: Precisely.
ADV MALEKA SC: Yes, can I explore that with you that, and I accept your qualification
there ought not to be, but where the executive is part and parcel of the debate and it has
taken, it has participated in national, in that national debate, in at least the national
assembly why should there be a debate on its part about what the nation can or cannot
afford?
MR LUNGISA FUZILE: A number of things account for that. Perhaps, let me just make
this broad point first, the South African budgeting process is one of the most advanced
in the world. I say it with humility, because it could sound like I am gloating here, because
I was part of it, but it has been assessed independently by people who have not been
paid money to come to that conclusion.

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And several times they have made that conclusion after testing it a few times,
comparing how we run the process to other nations and I am not talking by the way other
emerging market economies or developing nations, including many advanced nations.
So we run one of the most transparent well developed processes, with very serious and
deep political involvement in that process.
Very rigorous technical analysis that goes with it.

It will not bore this

Commission with that, but I could if I am asked to, but, however, the nature of budgeting,
especially at a time like the reference period that we are talking about when the economy
is not growing fast enough, in fact if anything when the rate at which GDP expands is
decelerating year after year where there is disappointment year after year in terms of
revenue collection, in other words revenue falls short of target every year, then budgeting
becomes a very difficult exercise in terms of trade-offs.
It means to do more of one thing for an example give zero increase, which is
something that we had to grapple with at one point in time in fees for higher edu cation.
It means that you must give up something. And it is usually in the giving up on something
that the difficulty arises.
Most people are used to joke about it to my bosses. I have had many over the
recent past in that role that most of them prefer that the budget must only have plusses.
So they would prefer to say we have given higher education for free, we have given grant
increases that are higher than inflation, we have given this. Once you say to them let us
then talk about how we are going to pay for it, they wish they could just disappear,
because it is an inconvenient part, whichever way you think about it, because you either
have to explain why you are borrowing a lot, and if you are borrowing for consumption it
is hard to justify.

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But all – or you got to tax more and again taxation is not a thing that is very
popular with people who apply the trade of politics. So that is then what raises the
contention, because it is about coming out, Chairman, in saying, I wish I could give you
this thing, but our country cannot afford it.
ADV MALEKA SC: Yes, Chair, I have got two more questions on the question on the
budget and with your leave I suggest that they are important, because they provide a
context to this revolving door that we will canvas with Mr Fuzile.
Minister Gordhan presented some of the numbers in relation to our historic
budgets over the years, and one of the indicators he presented was that at some point in
our budget cycle South Africa enjoyed a budget surplus and I think he mentioned it was
during the course of then President Mbeki. Are you able to help us with regards to
additional information in that regard?
Do you recall when was it that South Africa enjoyed the last budget surplus?
MR LUNGISA FUZILE: It was the years around 2007/2008. The first of those were not
really planned, in fact we did characterised it as such. What had happened is that in the
years of President Mbeki the economy used to grow faster than the year that the
projection at the time of tabling the budget.
So when we table a budget in February we would project for a year and two
ahead what the GDP growth rate is likely to be, because that is the base that you tax and
what often happened was that the economy would then, the actual growth would be
higher than what would be projected.
That was the first reason we had the surplus, but the second reason we were
embarrassed by SARS, because it was getting to efficient in bringing all those who were
supposed to pay taxes into the net and making most people pay their fair share of the
taxes.

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So we would project that the taxes would be X and the actual tax take at the
end would be X plus one.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: Some bigger number. So as a consequence of those it did not
matter that in fact expenditure was growing in double digits in real terms. By that I mean
that it would grow in excess of 10% in real terms, but the growth in revenue driven by
these two factors that I have talked about was of such a nature that every year then there
would be more money available than the money that was planned to be spent.
Of course we would bank it and it happened year after year and until in
2007/2008 we realised or around that time first an unplanned surplus. But of course
there was a deep realisation that the good years were not going to obtain forever. I was
not DG at the time, the procedure was Mr Manuel was the Minister and Minister Gordhan
was a Commissioner at SARS, but essentially the coming together of all of these thin gs,
then it was obvious that it was not going to be there forever, because part of the growth
in GDP was aided by a commodity boom, prices of gold and other minerals rising and
staying high for a protected period of time which then meant that the revenues that came
from mining. But not only mining was the driver of the growth during that time.
So that then meant that our country was in a very, very good position. So then
there was a plan to make sure that when the cycle turns we must have planned surpluses
for a series of years, keep that money so that when bad years come we would be able to
set the budget in a counter significant way meaning that when the economy would be
slowing down we would draw on those savings and spend them, so that we do not have
to cut spending on social programs, investment and so on and so forth.
ADV MALEKA SC: Yes. Well just to decode some of the complex micro economic
terminology you used. You explain two indicators as the drivers of the budget surplus

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around 2007. The first was the economic growth given what you call the GDP, Gross
Domestic Product.
In my limited understanding that is one of the indicators of economic growth,
is that correct?
MR LUNGISA FUZILE: That is correct.
ADV MALEKA SC: And as against the economic indicator of the growth that South Africa
enjoyed, of course many other countries in 2007 you are able to make conservative
budget estimates? I take it in terms of ensuring that you are not going to go into an over
estimation of expenditure, is that correct?
MR LUNGISA FUZILE: That is correct, safe for just one word which were used, we used
to call it a swear word "conservative".
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: They were prudent.
ADV MALEKA SC: Prudent.
MR LUNGISA FUZILE: We tended to prefer that word, because the one carries a little
bit, in fact not a little bit, carries – conservative carries negative connotations.
ADV MALEKA SC: Okay, let us work with the word prudent. Is it prudent enough? And
as we know the good economic times were not there to last forever and we know that
various analysts mark the year 2008 as the beginning of the global economic meltdown
and there were no longer tailwinds of economic growth and that many economies had to
face the headwinds and ours were not an exception.
Can I ask you to take that mark of 2008 and explain to us quite quickly what
happened to our budget insofar as surplus or deficit is concerned?
MR LUNGISA FUZILE: We started the year, if we completed 2009, I think it was 2008
with the global financial crises beginning for instance Lumin Brothers, all those kind of

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banks folding. What that then did was just to send negative signals, you can call it
sentiment across the globe, which eroded confidence in the financial systems or sectors
of many countries, which then meant that most economies essentially had to not only
downgrade their focus for growth, but many countries including our own in 2009 got into
recession.
The first budget that Minister Gordhan inherited from his predecessor Mr
Manuel was projecting, now on the back of that – against the backdrop of that global
development a deficit, and I am using memory here, if it can get me into trouble, but
maybe I should not talk numbers, but if you will allow me to just talk ball park figures, it
will be fine.
ADV MALEKA SC: Yes, I would like to get to 2015.
MR LUNGISA FUZILE: 2015, okay. So we started there, we were looking at a growth,
at a deficit of around 3% in 2009. That was in February. By July when Minister Gordhan
had to table the budget vote for the Treasury we had to announce that revenues were
going to fall short by no less than 60 billion that year.
That was just four months or so on. Which meant that the deficit had
to…[indistinct 23:50] up to about 6% projected at the time. Of course if you just talk debt
numbers by 2008/9 our debt was sitting at around 426 or so billion or about 24% of GDP,
which is the kind of measure that economies use to just get a relative sense of how big
and affordable is your debt.
Fast forward to 2015 we had had to borrow overtime and of course sensibly
so if I may say, it was an appropriate approach to physical policy, in other words to act
counter cyclically avoid the bloodbath in terms of jobs, although one occurred it could
have been worse if this was not done.

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So there was investment and other things and the spending that went with
that, so as to accumulating debt at quite a fast pace so that by 2015 our debt was just
slightly under 2 trillion if it had not reached that. Of course there were several things that
were done to make sure that we stay on track for an example we introduced under
Minister Gordhan something we call an expenditure selling, which I will not bore you
about it, but it was just a measure of discipline, in fiscal management.
ADV MALEKA SC: I can assure you that Minister Gordhan did talk about…[intervenes]
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: About the expenditure ceiling and gave us some percentages on
that.
MR LUNGISA FUZILE: Exactly so most of it was responsible stuff. Let me just
characterise it this way, a lot of the time I would explain and I would do this even to rating
agencies and investors and say look we have the propensity as a country to take the
right decisions, but more often than not it seemed to me towards the end of my tenor that
people would take the right decision, but angry with it afterwards, because it restrains
them.
I do not know if I am making sense.
ADV MALEKA SC: Yes. You do, as far as I understand your evidence and I would like
to conclude on the budgets, because that takes us to paragraph 14 of your statement
where you referenced the last cabinet meeting, you and Minister Nene attended on the I
think it was 9 December 2015, but just to conclude on the budget, as at 2015 we were
running at a budget deficit of some sort, correct?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: I would like you to indicate to the Chairperson precisely for that
budget cycle year what was the indicated revenue side of the budget as against the

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expenditure side of the budget? So as to bring some figure to the extent of the deficit of
the time and finally tell the Chairperson how you fund that deficit and what will be the
cost of funding with reference to any micro economic financial ratio that you can put up?
MR LUNGISA FUZILE: I know that I have been ringing these numbers as though I am
reading them from somewhere. I remember the ballpark figures, but not the exact
numbers.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: Our budget at that time were running into a trillion plus, 1,2 or
1,4 trillion.
ADV MALEKA SC: My recollection it was 1,4 trillion.
MR LUNGISA FUZILE: 1.3, 1.4 trillion, so I am close.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: And of course the revenues were marginally les than that with
1.2 something, so we would end up with a deficit of about 170, 160/170 billion or so. That
translates to somewhere around 3.5 to about 4% deficit as a percentage of GDP.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: We would then fund that deficit of about 160/170 billion through
short term debt, your Treasury bills. They used to run about 20 billion or so and of course
long term debt which is your bonds which is – they are of two kinds, inflation linked bonds
and of course what we called fixed interest or fixed income bonds.
The ones on which a fixed coupon is paid in a year at two points normally and
of course the importance of this point of running a deficit for purposes of micro economic
policy, both from the point of view of what the Central Bank does with inflation, what
Treasury does, the Minister of Finance, in terms of fiscal policy, is in relation to the fact
that if a government and of course the Central Bank act in ways that can suggest that

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inflation can run away or debt can rise exponentially is that people get scared of a country
like that, because an investment you make today is worth nothing a year later, because
it is valued as eroded by inflation and also of course if you are a foreign investor gets
eroded by the impact of the bad policies on your currency, because if the Rand gets weak
every day the Rand depreciates the value of an investment that a person who comes
from aboard has put here falls.
And we can go through the simple arithmetic if it is necessary, but I do not
know.
ADV MALEKA SC: It is not necessary, but the point is this Mr Fuzile, where I would like
you to help us, is if you do not have income of your own to fund your budget expenditure,
you will have to go out to the market and then raise that for which you will pay interest,
correct?
MR LUNGISA FUZILE: That is correct.
ADV MALEKA SC: And the extent of the interest you will pay varies according to the
ratings that you as a country would enjoy, is that correct?
MR LUNGISA FUZILE: Most definitely.
ADV MALEKA SC: Yes, Chair, where I come from people who borrow you money they
are called "mashunasa" and they determine the extent of interest. You will have to pay,
given the risk you pose.
CHAIRPERSON: And they demand other items from you as well.
ADV MALEKA SC: Indeed.
CHAIRPERSON: Yes, okay.
ADV MALEKA SC: So in that context, I begin to go to matters of fact now and they begin
from paragraph 14 of your statement at page 57. You talk about a cabinet meeting
following the removal of Minister Nene or relating to the removal of Minister Nene. Can

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I stop you there and ask you this about then Minister Nene, that from what I read of your
statement when you refer to him it suggest that you must have had some close fond
relationship with him? Is that a fair perspective?
MR LUNGISA FUZILE: That is correct.
ADV MALEKA SC: Of the relationship that you had?
MR LUNGISA FUZILE: That is correct.
ADV MALEKA SC: Because at some point you talk about how you were moved, touched
and disaffected when he went to his office in his final days to collect his belongings.
MR LUNGISA FUZILE: Yes, he is a very personable character. I have been lucky,
because perhaps the most elegant way to say this I have had a good relationship with
most of the Ministers I have worked with or for.
ADV MALEKA SC: Yes, now from paragraph 15 of your statement you talk about how
you gained knowledge of his dismissal from cabinet. I take it that you are at paragraph
15?
MR LUNGISA FUZILE: Yes, I am.
ADV MALEKA SC: Because I would like to ask you about certain things. You recall at
that point in time you have been to cabinet with him and you had made some presentation
around budget typical matters at that point in time including the so called nuclear deal,
remember that?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: And in paragraph 16 you say that…[intervenes]
CHAIRPERSON: Sorry, sorry, you might wish to articulate your answer yes or no so that
it will be recorded.
MR LUNGISA FUZILE: Oh, okay.
CHAIRPERSON: When you nod it does not record it.

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MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: I am not going to ask you repeat that detail, because it is now before
the Chairperson, Minister Nene testified about it.
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: Minister Gordhan testified about it and there have been some
tangential reference by Minister or Deputy Minister Jonas then.
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: Unless you want to canvas that detail, but I for my purposes would
not want to canvas that detail.
MR LUNGISA FUZILE: No, not now.
ADV MALEKA SC: What I want to reflect on though is what you say in paragraph 15.
You say around 18:30 on that day he sent you a message, telephonic data message SMS
and he said in that message:
"The axe has fallen."
Do you confirm that, that was the text nature of the message?
MR LUNGISA FUZILE: Yes, that is true, Chairman, that is the text message I received
from Mr Nene around that time that evening.
ADV MALEKA SC: Yes, we will talk about what you did thereafter, but let me ask you
this. What did you understand him to mean when he said the axe has fallen?
MR LUNGISA FUZILE: I understood it to mean only one thing, Chairman, that he had
been fired.
ADV MALEKA SC: That phrase suggest that there must have been some contemplation
or anxiety on his part about the prospects that he could be fired at some point. What was
your knowledge of the speculation around his office at the time?

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MR LUNGISA FUZILE: A day earlier Minister Nene and I and the same colleagues I
mentioned, Mr Ndondo Mgasha and Mr Michael Sacks had gone to a meeting that
discussed nuclear, but as I said it is not something that I want to canvas today, and the
meeting was not pleasant.
Things that happened around it even before the meeting had suggested a
treatment of the Treasury, the Minister of Finance as not being fully part of the rest of
government. That is the one marker that I could curtail, the conversation had not gone
well.
Prior to that in a very informal and I would even say an even awkward way a
while back Minister Nene had walked into my office, without saying much, and said these
are tough times, if I leave this place I would rather leave it with my integrity in tact.
So, and I did not ask him, when people normally talk along those terms with
me, although I am generally talkative with stuff like that I leave them to say as much as
they feel comfortable to say, but he did not elaborate. So when he said this I was not
surprised. Needless to add as the last point that if not on that day it may have been the
day before, one of the daily newspapers carried an article that was predicting a cabinet
reshuffle and I thin k that it got most of the facts on what happened in relation to Mr Nene
and the Treasury spot on.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: About him going to be removed, going to be replaced. I am not
sure if it mentioned Mr van Rooyen by name, but it did make reference to a back bencher,
it may have been him, I am not sure if they were correct about back bencher, because
he was a chief weep, but in any way, it did make a reference about him being replaced
by someone of less…[intervenes]
ADV MALEKA SC: Calibre?

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MR LUNGISA FUZILE: Any word that is less offensive, along those lines, but at the
same time it also said quite instructively that he would be sent to one of the international
finance institutions. It may not have said the Brics Bank, it may have said such as the
IMF or such as the Brics Bank, but it was not definitive on that.
So when he said this there was no surprise to me at all.
ADV MALEKA SC: Alright.
CHAIRPERSON: Before you proceed Mr Maleka, we normally do not take any break
after lunch, but I would like to take about ten minutes break and then we will resume. We
will adjourn for ten minutes.
ADV MALEKA SC: Thank you.
CHAIRPERSON: Thank you.
MEETING ADJOURNS
MEETING RESUMES
CHAIRPERSON: Yes Mr Maleka?
ADV MALEKA SC: Thank you, Chairperson. Mr Fuzile we were talking about the news
that you have heard about the dismissal of Minister Nene from cabinet…[intervenes]
CHAIRPERSON: Well something has been done temporarily, I can hear you very well
now.
ADV MALEKA SC: Thank you, Chair.
CHAIRPERSON: Thank you.
ADV MALEKA SC: You then say immediately after you received his message that is the
text message you changed course and you went to his official residence in Tshwane,
correct?
MR LUNGISA FUZILE: That is correct, Chair.

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21 NOVEMBER 2018 – DAY 27
ADV MALEKA SC: And I suppose when you arrived there you found him and you talked
about the news, correct?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: What did he say to you?
MR LUNGISA FUZILE: The first line was "I do not have a job" and…[intervenes]
CHAIRPERSON: I am sorry the first was?
MR LUNGISA FUZILE: "I do not have a job" and the next one was about what had
transpired, which the Commission is aware of that he got called back and the rest of that
story and then he encouraged us to continue to do the work of the Treasury and make
sure that the institution remains strong in the face of the challenges that we were facing.
ADV MALEKA SC:

From paragraph 15 to paragraph 16 of your statement you

transitioned to a different topic, and before we get there can I ask you something about
this? Were you given any official notification by the office of the presidency about the
forthcoming dismissal of Minister Nene?
MR LUNGISA FUZILE: None whatsoever.
ADV MALEKA SC: Are you aware that some highly connected individuals are reported
to have had prior knowledge of Minister Nene's dismissal?
MR LUNGISA FUZILE: Yes, I have picked that up.
ADV MALEKA SC: Can you share with us your knowledge in that regard?
MR LUNGISA FUZILE: It is, I mean, Chair, yes, I can share this, but this is one bit I am
uncomfortable with, it is too much hearsay, but I will put it this way, I have since known
that – in fact let me go back. It was around November that at a breakfast gathering of
the bank CEO's, this was when I was DG, and on the occasion of a visit by the President
of the Brics Bank, Dr Kamaff I think, if I am remembering his name correctly that one of

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the persons in attendance at that meeting pulled me apart, pulled me aside and said you
might have a new Minister soon.
And I asked the President, I said, but where do you get that from it is November
now, the budget is in February. Surely is your soon after February? He said "I thi nk it
will be sooner as that". I was a bit dismissive of it, but as we were walking to our cars at
the end of the meeting the person said I am actually serious, because I have heard from
friends that certain people has been asked about the possibility of replacing your Minister.
But to be honest with you, as I say I am reluctant to talk about that stuff.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: Because it is just…[intervenes]
ADV MALEKA SC: Hearsay.
MR LUNGISA FUZILE: If you hear all of that stuff you would run away from your own
shadow.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: So I dismissed it, but I had heard it and I remember it.
ADV MALEKA SC: Alright. Tomorrow I will refer to a Sunday Times publication on that
issue.
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: And ask you whether as the official of Treasury at that point in time
you picked up that news and if you did what you did about it, but it will be a subject matter
that we will debate tomorrow.
MR LUNGISA FUZILE: Okay.
ADV MALEKA SC: For now you have anticipated a topic that you raise in paragraph 17
perhaps in a different context, and there you say:

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"After there was an announcement of Minister Nene's dismissal
officially by the office of the presidency through a media
statement around 20:00…"
On the same evening you received a telephonic call from Mr Enoch
Godongwana. You confirm that you did?
MR LUNGISA FUZILE: That is correct, Chairman.
ADV MALEKA SC: And you say in the course of that conversation he said something
which is not only traumatic but worrisome and I quote in paragraph 17 of your statement.
You say he said the following:
"You are now going to get a Gupta Minister who will arrive with
his advisors."
Facts first. Was that what Mr Godongwana conveyed to you as far as you
recall on that evening after you spoke to Minister Nene?
MR LUNGISA FUZILE: That is correct, Chairman.
ADV MALEKA SC: Chair, you will no doubt receive the evidence of Mr Godongwana in
due course and we would like to test whether or not he corroborates or repudiate this
part of the evidence, but for now it is on record before you.
Second, what did you understand him to say when he said you will now receive
a Gupta Minister?
MR LUNGISA FUZILE: Bearing in mind, Chairman, that at that stage I did not know what
I know now and we will come back to it, which was the approach to Mr Jonas by a Gupta
person. I kind of did not kind of understand what he was saying and I asked him, I asked
Mr Godongwana what he meant exactly by this, and he said to me, you mean you guys
do not talk to one another as DG's?

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I asked what do you mean we do not talk? We do talk, but not about what you
are talking about. It is a bit strange to me. He said no I would suggest that you perhaps
have a conversation with your colleague Dr Tebedi Ramuntsha who at the time was a
Director General at Mineral Resources.
ADV MALEKA SC: In context by 2015 reference to the Gupta name or Gupta family had
already taken widespread public reporting by the media. What I want to establish from
you is that at that point in time what did you know about the Guptas or the Gupta family?
MR LUNGISA FUZILE: There had been stories about their proximity to President Zuma,
relationship that they had with – business relationship, friendship that they had with his
son. Their ability it would seem to interact with people in positions of authority, influence
and stuff like that. A lot of stuff was floating in the news.
Like I said some of it, it is to take it at face value, because you can connect
with it, but some of it you sometimes dismiss it partially, until of course a few other things
happen and then when you look back you start to connect that no, what you actually saw
and half believed or sometimes tried to dismiss in fact had a lot more to it than meets the
eye.
ADV MALEKA SC: Yes, I would like to test your knowledge on that topic, with reference
to credible evidence, which has now been placed before the Chairperson around the
Gupta family or components of its members. By this time it had become public knowledge
that there was the famous lending of an aircraft at Waterkloof Military Base, what was
your knowledge in that regard?
MR LUNGISA FUZILE: Sorry, I missed just the last part, I could not hear the last part?
ADV MALEKA SC: There was the republic widespread report of the famous lending or
infamous lending at the Waterkloof Military Base of an aircraft carrying guests of the

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Gupta family for a wedding in Sun City. What was your knowledge of that fact in that
regard?
MR LUNGISA FUZILE: Clearly, I mean in fact I will say, Chairman, I mean the statement
that Mr Godongwana made, I mean at the moment when he made it, if connected with
that, I suspect that part of why I registered it and almost forgot it quickly actually was the
fact that I was overwhelmed. Remember this was a short while after Minister Nene has
just said to me I have been removed.
So there was a sense of bewilderment I must say. But at the same time on
reflection, not even long afterwards it was clear to me that there is something big
happening around this removal of Mr Nene and the appointment of a new Minister and
of course some of the staff that I presume we will get to now.
ADV MALEKA SC: Indeed, and that is what I want to suggest to you, that this reference
to a Gupta Minister being conveyed to you in a context of a traumatic moment to you,
when a close Minister you have worked with had just been fired, summarily and without
any prior notification to you, must have meant something serious to you when you are
told that you are going to get a Gupta Minister?
MR LUNGISA FUZILE: It definitely did, but of course bearing in mind, of course as I say
it definitely did, without a doubt, but I qualify it as it becomes evident in the statement
that for an example, to illustrate, by the time I get to Mr Nene my preoccupation was with
how was to comfort him and deal with him rather than face up to this reality that in fact in
a matter of hours I am going to be meeting a new Minister and of course all that manned.
Of course after the conversation with Mr Nene a whole lot of these things then
came together to me and as I referred to this, to some of this in the statement, it was a
matter of hours that afterwards I started to borrow from my former bosses a phrase,
connect the dots, and I say in a matter of hours, because as I get to the statement, I do

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not want t run ahead of myself. When I then met one of these gentlemen as one of the
advisors, it immediately struck me like a big rock between my eyes that so there wa s
something that Mr Godongwana was saying.
Not that I dismissed it as an untruth when he said it, but I am saying in the
context of things, and of course I must say given if I am normally – it is, I almost used a
very inappropriate word, but – I almost want to ask for forgiveness, because when I
actually did not utter it, but if you just think about it…[intervenes]
CHAIRPERSON: Mr Fuzile, you have said two things that I have not heard and of all the
people here I must be the one to hear the evidence. Was it deliberate intended that I
should not hear that part of the evidence?
MR LUNGISA FUZILE: Yes, pardon me, Chair, but essentially if, just for purposes of
reflection think about this. And I will not be long with this. You start the week with trying
to make a budget for the country. There is an announcement that fees for higher
education are going to be frozen for a year. No one knew the amount before the decision
was taken and I did not know about it until it was on TV and I was the Director General
of Treasury, I was not that important, but at least I would have expected the Minister of
Finance to know about it, he did not actually.
So, if you have that context which is so complex then your Tuesday is about
this big thing, nuclear and it happened in a way that Mr Nene and Mr Gordhan have told
I will have my chance to tell about it, but it is not – it is inappropriate, it is inconsistent
with what I have known the civil service to be about, how government used to work.
And then in essence we had reached that day of Mr Nene's removal without
having national allocations approved. Essentially we did not have a division of revenue,
which is the basis on which all…[indistinct 25:38] of government plan, right?
ADV MALEKA SC: Yes.

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MR LUNGISA FUZILE: So in the evening when I am overwhelmed by this I hear that the
Minister has been fired, replaced by another person. And then someone sort of phones
me and say look by the way the person you will be getting has been sent to you by the
Guptas. I just could not – I was honestly, I can say I was bewildered, because appointing
a Minister is a very serious job regardless of which portfolio and what time of the year it
is.
But appointing a Minister of Finance at a time when the situation is as I have
characterised to be told that by the way the person is sent by the Guptas, just did not
make sense to me at all at the point it happened.
ADV MALEKA SC: Yes.
CHAIRPERSON: When Mr Godongwana called you was the issue of Minister Nene's
removal already in the public domain or was the situation that he had been told and he
had told a few people close to him, but it was not yet official in the public domain?
MR LUNGISA FUZILE: It had been in the public domain, Chairman.
CHAIRPERSON: Oh, okay.
MR LUNGISA FUZILE: So I really assumed, and I may be wrong on this, that – or let
me say this, there is no reason for me to think that it would be incorrect to think that he
had heard it from the media, because the story had broken in the media by that time,
just, just.
CHAIRPERSON: Well I am just asking you, because I know that there – I know from the
evidence of both former Minister Nene and Minister Gordhan that there are times or there
have been times when a Minister hears on TV for the first time that he is no longer
Minister, but I now from former Mr Nene's evidence that I think on that occasion he was
called and he was told. So that was why I was wondering whether by the time – and he
did say in his evidence after he had been told he kind of shared the information with

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people who were close to him, so I was wondering whether, when Mr Godongwana
phoned you it was already in the public domain or not?
MR LUNGISA FUZILE: I think it was already in the public domain, Chairman, but I would
not take it – I would not dismiss it totally that he might have known before the time, but I
am glad to know that he will be coming, because he can explain at what point he got to
know about it.
The times are so close in my case that it would be hard for me to discern,
especially given that every time things happen, which is a difficulty with these processes,
one does not always check what time is it when I get this call, because you never know
that you will be asked rather to specify the time, but it was close to the time.
I have got reason to believe that he knew from the media.
CHAIRPERSON:

Yes, but also I think it is common knowledge that usually the

announcement of the removal of one Minister and the appointment of another usually
happens at the same time, but sometimes it does there is some gap, but I think most of
the time it seems to happen at the same time, or sometimes an announcement happens
of who the new Ministers are and then you can just see who, which are no longer included
who was there before.
MR LUNGISA FUZILE: More often than not, when Ministers are announced this I can
say having been closer to the system, the process has been underway for some time
actually, because…[intervenes]
CHAIRPERSON: Yes.
MR LUNGISA FUZILE: Because people have to be called and told and once that
happens, leaks happen. You know by the time it is announced – but of course except for
this one incident that I know also that happened during that time of Mr Gordhan who land

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with all of us on television and Mr Jonas when the replacement was announced.
Generally it comes out in the media first.
But in my case I got to know about it before it was in the media, because
Minister Nene as he got out of the presidency sent me that SMS, that I know for sure,
because it must have been between 18:30 and around 19:00. Then the story – my
recollection is that broke in the media closer to 20:00.
And Mr Godongwana's call is somewhere around that time, so I am – I
presume that he had heard about it from the media, but he can confirm this.
CHAIRPERSON: Okay thank you.
ADV MALEKA SC: Chair, I see that it is just slightly past 16:00, but I would like to explore
a conclusion topic with your leave, but we are available to remain here for as long as you
want us, subject to the convenience of Mr Fuzile.
CHAIRPERSON: Well if it is convenient to everybody including Mr Fuzile, maybe we
could go on until 16:30, is that fine with you or will that inconvenience you in terms of
whatever you might have planned?
MR LUNGISA FUZILE: The honest truth the later for me the better.
CHAIRPERSON: Okay, thank you. Okay, alright, thank you.
ADV MALEKA SC: Alright, Mr Fuzile of course the content of your conversation with Mr
Godongwana extent far beyond what we have just covered. In your statement you also
indicate that he said additionally the following that when a Gupta Minister arrives, he/she
will arrive with advisors who are appointed by the Guptas?
MR LUNGISA FUZILE: That is true.
ADV MALEKA SC: You went even further from your statement, because you say that
he said:

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"Even that Gupta Minister who arrives with advisors appointed
by the Guptas or given to him by the Guptas he would not know
who those advisors are."
Is that correct?
MR LUNGISA FUZILE: That is correct.
ADV MALEKA SC: Alright. That is…[intervenes]
CHAIRPERSON: Mr Maleka is that part which you have mentioned to him now which
you say comes from – came from Mr Godongwana is that outside of his statement?
ADV MALEKA SC: No, it is in the statement, Chair.
CHAIRPERSON: Oh, I read it and I do not seem to remember that part.
ADV MALEKA SC: Can I take you through it? Just to be clear and to be factual, perhaps
I should read with you Mr Fuzile and Chair, from…[intervenes]
CHAIRPERSON: Even better, let him read it.
ADV MALEKA SC: I am grateful to you, Chair. Can I ask you to…[intervenes]
MR LUNGISA FUZILE: If you just, let me read 17 perhaps just for emphasis.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: Yes.
"That evening I received a call from Mr Godongwana who said
"you are now going to get a Gupta Minister who will arrive with
advisors."
18 goes on to say:
"I asked him to elaborate what he meant, he said I should watch
it, my new Minister is likely to come with advisors he does not
know, they would be given to him."

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I put given, because that is his word, and I think it is a powerful word in this
context, to him by the Guptas. And as I say, I have used the word here bewildered, I was
perplexed. It is – you hear it, you believe it, but you do not believe it.
ADV MALEKA SC: Of course we will test that with Mr Godongwana, but from what he
has conveyed to you, I mean this is a serious, serious violation of the constitution. It is
almost what I call a…[indistinct] cabinet.
MR LUNGISA FUZILE: Yes at the risk of getting into trouble…[intervenes]
CHAIRPERSON: Well Mr Fuzile…[intervenes]
MR LUNGISA FUZILE: I would use a stronger word to describe this situation.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: But it is as you characterise it.
ADV MALEKA SC: Yes, well, Chair, we will reserve that characterisation until Mr
Godongwana testifies, but this goes to the heart of paragraphs 1.1. to 1.3 of your terms
of reference that someone somewhere outside the provisions of Section 85 and 86 of the
Constitution would be known at this stage – so the allegation goes – to appoint a Minister
and to appoint for that Minister advisors for that Minister.
And appoint advisors which that Minister does not even know.
Anyway…[intervenes]
CHAIRPERSON: Well, before you proceed Mr Fuzile you did say earlier on that Minister
Nene told you what had happened, that is now when you met him after he had sent you
a SMS, told you what had happened.

Mr Jonas has given evidence before this

Commission and I cannot remember whether in your statement you deal with any meeting
you might have had with him in October 2015 after according to his evidence he had
been at the Gupta residence. But even if you do not deal with it, I find out whether you
did have a discussion with him when he may have told you what had happened?

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MR LUNGISA FUZILE: Mr…[intervenes]
ADV MALEKA SC: Mr Fuzile can I ask you in that regard to go to page 72?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: Just to give you context as you answer fully.
MR LUNGISA FUZILE: Thank you, yes.
ADV MALEKA SC: The question pointedly put to you by the, Chairperson.
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: Can you please go to page 72 of EXHIBIT P and reflect on what you
say from paragraph 77?
MR LUNGISA FUZILE: Yes, thank you for that.
ADV MALEKA SC: 71 I mean.
MR LUNGISA FUZILE: Chairman, thank you very much for that guidance Mr Maleka.
You are right, you are remembering the statement.
CHAIRPERSON: Yes, okay.
MR LUNGISA FUZILE: Yes.
CHAIRPERSON: You might not need to deal with it and Mr Maleka will indicate if he
would want you to deal with it at some length. The question that I want to ask you is
whether in that conversation that you had with Mr Jonas about the meeting that he said
that he had had at this Gupta residence, whether he – whether you remember whether
he mentioned that he apart from being offered the position of Minister of Finance, which
at the time was held by Mr Nene, whether you have any recollection whether he also said
he had been told that if he wanted advisors he would be given advisors?
MR LUNGISA FUZILE: I remember it, Chairman, vividly, that when I met Mr Jonas and
we will talk about it when we get to it Mr Maleka, he told me that one of the things that
the Gupta person he met said to him was that among the tasks, first tasks that they would

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expect of him in return for being given this senior position and of course the money that
went with it, the immediate amount and the huge sum to be paid later, he was asked that
he should remove four of us and we will get to the details of who those people were.
In addition to that he was then told that he would be given replacements for
us, so in other words for the four of us who were going to be removed, but he was also
be given advisors, which actually dovetails with this story of Mr Godongwana which I did
not solicit, just came from a call from someone who had got great familiarity with me, in
fact I call him a big brother friend who just said look this is going to happen now.
So when you connect then this story, one point and the other story from Mr
Jonas they just fit like a glove in a hand that it has been designed around.
CHAIRPERSON: I wanted to ask you about that, because of course there is a denial on
the part of the members of the Gupta family as well as Mr Duduzani Zuma, I think, Mr
Hlongwana as well, the latter two having been present at a meeting with Mr Jonas. There
is a denial that any offer was made to him at that meeting and that – or by any of the
Gupta brothers, so but I just wanted to check, because he certainly made, gave this
evidence that he was told that if you wanted advisors, I may be wrong about how I am
phrasing it, but he could get advisors or he would get advisors and then now you have
given evidence that Mr Godongwana said to you before you might not have known who
the new Minister was at that time, I do not know the time of Mr Godongwana's call, but
certainly you did not know any advisors that he might have been planning to bring.
So you get a call from Mr Godongwana who says you will get a Gupta Minister
who will come with advisors given to him by the Guptas and then of course we do know
that we understand from the documentation that when the new Minister came there were
certain people that came with it and I think the statements of some of the people from

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Treasury gives names of people and one said he was an advisor and another one was
Chief of Staff that the new Minister came with.
Okay thank you.
ADV MALEKA SC: Chair, can I, the question you raise is very, very important and with
your leave I would like to jump to it.
CHAIRPERSON: Okay, alright.
ADV MALEKA SC: And skip a lot of things that we will discuss tomorrow with Mr Fuzile.
CHAIRPERSON: Okay.
ADV MALEKA SC: Because it connects to use the famous phrase the dots and Mr Fuzile
if you do not mind I am going to jump at least 40 paragraphs of your statement and ask
you to go to paragraph 71 on page 72. In paragraph 71 you reference a meeting which
took place as a result of a telephonic call from Mr Jonas on 11 December 2015. That in
context is two days after you had received the call from Mr Godongwana, do you recall
that?
MR LUNGISA FUZILE: That is correct, I recall.
ADV MALEKA SC: And on 11 December he asked you to meet with him and ultimately
after some conversation you choose a hotel somewhere in Garsfontein and you meet
with him, correct?
MR LUNGISA FUZILE: Yes, that is true.
ADV MALEKA SC: And then over the page in paragraph 73 you talk about how the
conversation between you and him went. For now I would like to focus on his side of the
conversation which is what he conveyed to you. And the first is at paragraph 75. Can I
ask you to read for us your record of what he said to you at that point in time?
MR LUNGISA FUZILE: At paragraph 75 at page 73 of the bundle I said:

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"The Deputy Minister also said Mr Gupta said that he should
remove or dismiss four of us. Mr Ishmael Mamoniat who were
the DG responsible for tax policy and financial regulation…"
It is important to underline this financial regulation is the section that then
assist the Minister with the development of policies for anti-money laundering and stuff
like that, you can see the relevance of the importance of that role.
"…Mr Kenneth Brown who was the first Chief Procurement
Officer which is the section that helps with writing rules relating
to procurement and also oversees compliance with the
procurement rules…"
So when for instance people would ask for procurement in a way that is
irregular this is the section that would have to stop us.
ADV MALEKA SC: Can I interrupt you there?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: Chair, when we begin to deal with the SOEs hopefully beginning with
Eskom the name of Mr Brown as a Chief Procurement Officer within National Treasury
will feature quite a lot, because there was some staring and stress that he caused in that
regard. So that was the context that, I am sorry to interrupt you.
MR LUNGISA FUZILE: No, no that is fine.
ADV MALEKA SC: Go ahead.
MR LUNGISA FUZILE: I am perfectly fine with that. And then Mr Andrew Donaldson
who was running the Government Technical Advisory Centre and of course myself. So
those were the three people, ag sorry four people that he told me that he had been asked
to remove at that time.

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And of course it was in that context immediately that he said, which is
something I do not capture here, but I captured it earlier if you remember from that other
bundle, in the way which I reference what Mr Gordhan said, Minister Gordhan said,
pardon me.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: He said at that point that in fact this guy, he says he will give me
replacements for you guys and advisors.
ADV MALEKA SC: Yes, and then can you then read the conclusion you draw from what
Minister Jonas said to you in paragraph 77, you can skip paragraph 76 for now.
MR LUNGISA FUZILE: I say that:
"The conversation with Mr Jonas helped me form a good picture
about the modes operandi involving ministerial appointments
and advisors."
If I may elaborate then? When you see this and you connect it to the phone
call of Mr Godongwana and you connect it to his reference of Department of Mineral
Resources and we will talk about this later on, because the advisors that Mr van Rooyen
showed up with, one of them was an advisor at Mineral Resources.
So the comment that Mr Godongwana made was not an off the cuff illconsidered comment, actually. There was really something in it.
ADV MALEKA SC: Alright, then I ask you to read paragraph 80 to reinforce the very
conclusion you have expressed in paragraph 77?
MR LUNGISA FUZILE: I say there, Mr Chairman:
"I was starting to get a picture that there was a connection
between what the Guptas wanted and what the President of the
country wanted and was doing."

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And the part by was doing which is the removal of people and their
replacement with people who in this case it would seem the evidence suggest would have
either been suggested by the Guptas or connected to the Guptas and would come with
advisors given to them by the Guptas and would become evident as we talk about this,
that in fact Mr van Rooyen's familiarity with the people he brought as advisors were very
limited if at all.
ADV MALEKA SC: Yes. Chair, we will canvas that issue quite at length tomorrow, but
for now may I ask for your permission to deal with two more matters before 16:30, unless
you have some questions to put to Mr Fuzile.
CHAIRPERSON: Well I want to find out your estimate of how much time may be needed
to finish him evidence.
ADV MALEKA SC: Yes. Chair, I hope that…[intervenes]
CHAIRPERSON: Now that I know that from his part the later he leaves the better.
ADV MALEKA SC: Yes, Chair, what we have done is that we have arranged for the
Treasury witnesses on the time table to be here for two days and I can assure you without
any fear of contradictions from my colleagues that we will certainly finish the evidence of
those two witnesses tomorrow.
CHAIRPERSON: Oh, okay.
ADV MALEKA SC: Because one of them is going to be fairly short and that is Mr
Mahayana.
CHAIRPERSON: Oh, okay.
ADV MALEKA SC: And the other is going to corroborate without repeating aspects of
Mr Fuzile's evidence.
CHAIRPERSON: Oh, okay.
ADV MALEKA SC: Yes.

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CHAIRPERSON: So we do not need to necessarily take – delay the adjournment this
afternoon?
ADV MALEKA SC: Not at all, Chair.
CHAIRPERSON: There is enough time tomorrow?
ADV MALEKA SC: Not at all I feel comfortable in suggesting that we will finish all of
them tomorrow.
CHAIRPERSON: Yes, okay.
ADV MALEKA SC: Yes, but before we adjourn today…[intervenes]
CHAIRPERSON: So you can wrap up for today?
ADV MALEKA SC: Mr Fuzile I am going to take you back to where we were and that is
the conversation that you had with Mr Godongwana and I would want to ask you some
conclusive questions on that conversation. The first is this. Did he tell you who those
advisors would be that would be accompanying your new Minister?
MR LUNGISA FUZILE: No, he did not.
ADV MALEKA SC: Did you ask him?
MR LUNGISA FUZILE: No, I did not.
ADV MALEKA SC: Did he indicate the role of those advisors who would come with the
new Minister?
MR LUNGISA FUZILE: He said two other things, one of them were uncomfortable in
writing it down, because he said, and one can soften it, which…[intervenes]
ADV MALEKA SC: Let me just indicate this to you that in this Commission we would
prefer witnesses to tell the truth to the best of their recollection, without softening
anything, because the Chairperson is called upon to pursue the truth wherever it leads
him to.
MR LUNGISA FUZILE: For instance…[intervenes]

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CHAIRPERSON: So maybe just to add I want to see the full and true picture of whatever
was happening, whatever the attitudes may have been, whatever was being pursued.
MR LUNGISA FUZILE: In fact, let me just be upfront with this – he said something to
the effect that they would be of Indian descent.
CHAIRPERSON: They would?
MR LUNGISA FUZILE: They would be mostly likely be of Indian descent. And then he
also said something to the effect that they are likely to control the Minister.
ADV MALEKA SC: And that is the truth as best you recollect it?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: And then he suggested that you should call Dr Tebedi Ramuntsha
who at the time was the Director General for the Department of Mineral Resources. I
take it that you recall his name and office at the time?
MR LUNGISA FUZILE: Yes sir, I remember it, Chairman.
ADV MALEKA SC: Yes, I mean he was your counterpart in national government?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: I assume that you have had some prior discussions with him, you
are familiar with him and collegially you would have been very comfortable in talking to
him?
MR LUNGISA FUZILE: Yes.
ADV MALEKA SC: Did you ever manage to call Dr Ramuntsha?
MR LUNGISA FUZILE: No, I did not, but I did bump into him at some point.
ADV MALEKA SC: Why did you not call him?
MR LUNGISA FUZILE: I was a bit concerned, because it is a lot of inferences, in fact I
think that after what happened Friday I had my picture. I did not need anyone to help me

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form the picture as I say in my statement and I still hold that, that picture actually is
correct.
ADV MALEKA SC: And I assume that from that answer that you did not require any
further corroboration from anyone?
MR LUNGISA FUZILE: No, that is correct, Mr Chairperson.
ADV MALEKA SC: The picture was clear to you just as night follows day or visa versa?
MR LUNGISA FUZILE: It was clear to me that what essentially Mr Godongwana was
saying I could infer that what is about to happen or is happening in your department is
what has happened at DMR.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: And if you want to understand it with this beats that I have talked
about.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE: You will find them.
ADV MALEKA SC: Yes.
MR LUNGISA FUZILE:

And if you go through – as we go through this

evidence…[intervenes]
ADV MALEKA SC: Yes?
MR LUNGISA FUZILE: You will see the similarities.
ADV MALEKA SC: Yes. Chair, I wonder if this is an appropriate moment to adjourn for
tomorrow and if we could resume the normal time at 10:00.
CHAIRPERSON: No, that is fine, thank you. Mr Fuzile we are going to adjourn now and
resume tomorrow at 10:00 so if you could be back tomorrow at 10:00. We adjourn until
tomorrow at 10:00.
MEETING ADJOURNS

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