The article said the ANC became \u201cboth player and referee\u201d when Chancellor House tendered for state opportunities, and highlighted its 25% shareholding in Hitachi Power Africa, a local Hitachi subsidiary.<\/p>\n
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- Read: Hitachi fine won’t lighten the darkness<\/a><\/strong><\/li>\n<\/ul>\n
A year later, the M&G<\/em> revealed that Chancellor House would benefit from Eskom\u2019s R20-billion contract for boilers at Medupi power station awarded to a Hitachi consortium. A follow-up exposed how Valli Moosa, then chair of Eskom, had presided over the Medupi tender award and its subsequent doubling up to Kusile power station while also serving on the ANC\u2019s national executive and its finance committee.<\/p>\n
Lawrence Mushwana, then the public protector, confirmed Moosa\u2019s conflict of interests, but reported he could find no improper influence in the tender process. This insistence was undermined by Monday\u2019s SEC charges, which Hitachi agreed to settle by paying a $19-million fine.<\/p>\n
Although Hitachi did not admit guilt when it instantly settled the SEC charge by paying a $19-million (R263-million) fine, the evidence\u00a0is damning.<\/p>\n
‘Success fees’
\n<\/strong>
\nApart from $5-million in dividend payments, the SEC showed Hitachi paid Chancellor House disguised \u201csuccess fees\u201d of $1.1-million in 2008 for helping land the Medupi and Kusile contracts.<\/p>\nThe SEC said its investigation was done with the AfDB, which loaned Eskom $2.6-billion to fund contracts, such as Hitachi\u2019s at Medupi.<\/p>\n
An AfDB official, who asked not to be named, told amaBhungane that the bank was \u201cpursuing proceedings separate from the SEC\u201d against Hitachi, but did not say when an outcome may be expected.<\/p>\n
The bank is contractually empowered to investigate and sanction contractors in the projects it finances. It can impose fines and bar offenders from further tenders it finances. It also has a \u201ccross-debarment\u201d agreement with the World Bank and other development financiers, which may lead them to bar Hitachi too.<\/p>\n
The official said the joint investigation with the SEC signalled \u201chopefully a growing trend of co-operation\u201d between national enforcement agencies and development financiers, because it increased chances of success. With Hitachi, the SEC did not have jurisdiction to investigate in South Africa, but the AfDB did.<\/p>\n
The SEC fine and AfDB\u2019s potential sanctions against Hitachi are likely to send a strong signal to international contractors that giving stakes to party funding vehicles when they seek state tenders will be regarded as corrupt under increasingly tough international anti-bribery laws.<\/p>\n
‘Balance of political power’
\n<\/strong>
\nLast month, amaBhungane unveiled Chancellor House\u2019s stake in Colenso Power, a private power producer mounting an R18-billion bid to supply electricity to Eskom.<\/p>\nThe SEC said Hitachi was aware that Chancellor House was a funding vehicle for the ANC during the bidding process. \u201cHitachi nevertheless continued to partner with Chancellor and encourage Chancellor\u2019s use of its political influence to help obtain the government contracts.\u201d<\/p>\n
The SEC alleged Chancellor House \u201cnetworked to help schedule meetings with government officials and lobbied on behalf of\u201d Hitachi during the bid. A Hitachi memorandum weeks before Eskom awarded the Medupi boiler contract to it in October 2007 was optimistic because the \u201cbalance of political power\u201d in the Eskom board was \u201cANC driven\u201d and \u201ccurrently in our favour\u201d.<\/p>\n
ANC treasurer general Zweli Mkhize said in a statement this week that the ANC was \u201cnot involved in the transaction between Hitachi and Chancellor House, nor do we have any information on any impropriety relating to the award of the Medupi or Kusile contracts to Hitachi\u201d.<\/p>\n
This week Moosa said he\u2019d \u201cleft no stone unturned\u201d to ensure fair tenders for the power stations by commissioning Deloitte to review procurement processes. \u201cAt that time I was chairman of Eskom but at the same time in the leadership of the ANC and I had to be absolutely certain there was no political influence.\u201d<\/p>\n
Deloitte\u2019s remit included whether Eskom officials were conflicted. Although its reports have never been made public, it appears the consulting firm failed to see the elephant in the room \u2013 that Moosa did not recuse himself despite his conflict.<\/p>\n
Moosa said the \u201creal question\u201d was lack of transparency in political funding \u2013 \u201can unfinished part \u2026 of our otherwise great Constitution\u201d.<\/p>\n
* Got a tip-off for us about this story? Click here<\/a>.<\/em><\/p>\n
![](\"https:\/\/amabhungane.org\/wp-content\/uploads\/2018\/03\/94x94.jpg\")
<\/a>The M&G<\/em> Centre for Investigative Journalism (amaBhungane) produced this story. All views are ours. See www.amabhungane.co.za <\/a> for our stories, activities and funding sources.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"The company has already coughed up R260m after US SEC charged it over payments to ANC funding front Chancellor House.<\/p>\n","protected":false},"author":2,"featured_media":22780,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-4100","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stories"],"acf":[],"_links":{"self":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4100","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/comments?post=4100"}],"version-history":[{"count":1,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4100\/revisions"}],"predecessor-version":[{"id":30785,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/posts\/4100\/revisions\/30785"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media\/22780"}],"wp:attachment":[{"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/media?parent=4100"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/categories?post=4100"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/further.co.za\/amabwp\/wp-json\/wp\/v2\/tags?post=4100"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}