DA lays charges against Chancellor House, requests investigation by World Bank
30 September 2015
I have today laid charges on behalf of the Democratic Alliance (DA) against the ANC’s investment company, Chancellor House, in terms of the Prevention of Corrupt Activities Act (POCA). This follows their alleged unlawful activity in influencing the awarding of contracts by Eskom to Hitachi Ltd to provide boilers for the Medupi and Kusile power stations.
We have further lodged a complaint with the World Bank who provided a loan to Eskom to fund the construction of Medupi and Kusile, effectively bankrolling the ANC through their share in Hitachi via Chancellor House.
In the light of recent developments we believe the World Bank should invoke their power to demand financial restitution, in this case from the ANC, in cases where loans where employed to fund fraudulent, corrupt, collusive, coercive or obstructive practices.
The complaint to the World Bank is in addition to the complaint we submitted to the Public Protector yesterday. We have urged the Public Protector to conduct a full investigation into the circumstances surrounding the awarding of the contract to Hitachi.
The latest corruption scandal to hit the ruling party only serves to underscore the moral bankruptcy of the ANC which continues to profit at the expense of South African citizens.
Like the recent revelations of corruption at the Passenger Rail Agency of South Africa (PRASA), the allegations against Chancellor House are indicative of the pervasive corruption at all levels of ANC government. This continues to devastate our economy and divert resources away from the provision of much needed basic services.
The Hitachi tender has cost South Africa dearly. The failure by Hitachi to deliver on their contractual obligations has been one of the underlying reasons for the length delay in brining Medupi online, resulting in countless job losses and cost the economy billions in lost revenue due to prolonged load shedding.
Hitachi initially allied with Chancellor House in 2005 in order to boost their BEE profile in a deal that saw the ANC investment company purchase a 25 % stake in the mega-company for only R1 million. Under the arrangement, Chancellor House – and by extension the ANC – would share in the profits of power station contracts awarded to Hitachi.
Hitachi was subsequently awarded a R38.5 billion contract by Eskom in 2007 to construct boilers at Medupi and Kusile in a move that was later found to be a conflict of interest by the Public Protector given that Valli Moosa, then Eskom chairperson, was also a member of the National Executive Committee (NEC) of the ANC.
In a de facto admission of guilt, Hitachi paid US$19[million] to the settle the charges brought against it by the U.S. Securities and Exchange Commission (SEC) in terms of the Foreign Corrupt Practices Act (FCPA).
There can be no doubt that Chancellor House served as vehicle to effectively launder funds for the ANC who unlawfully exerted political influence over tender processes that benefitted Hitachi, and as a result, ultimately themselves.
The ANC has unduly benefitted in excess of R100 million through their eight-year association with Hitachi. After receiving R50 million in dividends over the course of the relationship, Chancellor House sold its 25% stake back to Hitachi just before the 2014 election for R50 million. This is in addition to the “success fees” paid to Chancellor House by Hitachi after being awarded the Eskom contracts.
The DA will not allow the ANC to use their power to enrich themselves at the expense of ordinary South Africans. It is imperative to the effective functioning of our democracy that we eradicate the cancer of corruption that is devastating our economy and the lives of millions of South Africans.
Issued by Graham Charters, Acting spokesperson to the DA Leader, 30 September 2015
