The Democratic Alliance, the largest opposition party, will ask the Public Protector, the nation’s graft ombudsman, to investigate the payments and would seek criminal charges against Chancellor House, spokesman Graham Charters said in an e-mailed statement on Tuesday.
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The Mail & Guardian reported on February 8, 2008, that then-Eskom board chair Valli Moosa presided over the parastatal giving contracts worth billions to the ANC’s funding company Chancellor House, while also serving on the ANC’s fundraising committee. Chancellor House is the investment arm of the ANC.
Hitachi was awarded the contracts for the Medupi and Kusile power stations and allegedly paid the ANC’s front company around $5m in “dividends” based on profits derived from the contracts.
The DA commented: “This is clearly an admission of de facto corruption that implicates the ANC – a party that has infected government at every level with corruption”.
HITACHI Ltd. has agreed to pay $19 million to settle the USA’s Securities and Exchange Commission charges that it made “improper payments” to South Africa’s ruling party to help it win contracts to take part in the construction of two power plants in the country. About 60% of the contract was set to be performed by the local subsidiary, Hitachi Power Africa, which is 25% owned by Chancellor House.
Hitachi did not admit wrongdoing in agreeing to the settlement.
Mkhize said the ANC was committed to clean and accountable governance and its national executive committee was directed to avoid all possible conflict of interest when raising party funds.
The settlement was subject to court approval.
The SEC, which has powers of subpoena and investigation, cites a 2005 Hitachi document that indicates Chancellor House was “politically preferred” when the foreign company was looking for an empowerment partner – with handwritten notes in the margin from an executive “recommendation by Escom (sic)” as well as “ANC treasury”.
In addition to this, “through a separate, undisclosed arrangement, Hitachi paid the front company an additional $1m in “success fees” that were inaccurately booked as consulting fees without appropriate documentation”.
It was Hitachi’s “lax” financial controls that enabled its South African subsidiary to make the improper payments and then disguise them in its books, SEC Enforcement Director Andrew Ceresney said in a statement. “It involves the parent company in Japan, which will need to be contacted”.
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The Hitachi case is the latest corruption scandal to hit the ANC, which is still reeling from accusations it paid a $10 million bribe to win hosting rights for the 2010 World Cup.
