The Gupta-owned New Age newspaper orchestrated lavish business breakfasts, channeling hundreds of millions of rands from state entities and paving the way for widespread corruption in South Africa.
A decade ago, long before Thuli Madonsela’s groundbreaking State of Capture report or the inception of the State Capture Inquiry, the Gupta family’s influence began to seep into South Africa’s public sector. Central to this infiltration were the business breakfasts hosted by the Gupta-owned New Age newspaper (TNA) and broadcasted on the South African Broadcasting Corporation (SABC).
These 45-minute events, ostensibly designed for high-profile interviews with ministers and top government officials, were anything but impartial. The State Capture Inquiry later revealed that state departments funneled substantial sponsorship fees to TNA, amounting to at least R1 million per event. These gatherings became a cornerstone of the Gupta family’s strategy to entrench their influence within the government.
Financial Lavishness Behind the Scenes
The financial dealings associated with these breakfast briefings were both extensive and opaque. Between 2011 and 2017, major state-owned entities like Eskom and Transnet disbursed over R50 million and R122 million respectively in sponsorship fees. These sums were purportedly for advertising and exposure during the events. However, the returns on these investments were negligible at best.
Key Financial Insights:
| Entity | Sponsorship Amount (R) | Return on Investment |
|---|---|---|
| Eskom | 50,000,000 | Minimal branding exposure |
| Transnet | 122,000,000 | Negligible impact on public image |
| PetroSA | Undisclosed | Similar lack of tangible benefits |
| SAA | Undisclosed | Consistently poor ROI |
The Inquiry Chair, former Chief Justice Raymond Zondo, highlighted that the sponsorships yielded little more than the opportunity to display banners at the events. For instance, Eskom’s R1 million sponsorship secured them two tables seating ten people each, an arrangement that failed to deliver meaningful engagement or visibility, as even Eskom officials admitted struggling to fill these seats.
The Mechanism of Influence and Corruption
The business breakfasts were meticulously crafted to serve as early indicators of the Gupta family’s broader state capture ambitions. By hosting influential figures and fostering close relationships with key government officials, the Guptas created a network of loyalty and dependency. This network facilitated their takeover of lucrative contracts and strategic positions within critical state-owned enterprises.
Paul Holden, director of investigations at Shadow World Investigations, emphasized the dual-stream strategy employed by the Guptas. “There are basically two early ‘streams’ of state capture, which the Guptas then use as a springboard to capture bigger prey like Transnet and Eskom,” Holden explained. The first stream involved the business breakfasts and The New Age, while the second targeted the Free State province, further cementing their control.
Jacob Zuma’s Complicit Role
Former President Jacob Zuma played a pivotal role in this elaborate scheme. Testimonies during the Inquiry revealed that Zuma was not merely a passive beneficiary but an active participant in orchestrating the state capture. He attributed the inception of The New Age newspaper and the associated breakfast briefings to his influence and strategic vision.
Zuma, now leading the MK Party, has consistently denied allegations of corruption and state capture. In 2018, he dismissed the concept as a fabricated tool by his political adversaries. Nevertheless, his testimony before Zondo acknowledged his involvement in establishing the Gupta-controlled media outlets, underscoring the depth of his complicity.
The Aftermath: Economic and Social Ramifications
The financial misappropriations and corrupt practices associated with the business breakfasts have had profound implications for South Africa’s economy and governance. State-owned enterprises like Eskom and Transnet, already beleaguered by inefficiency and mismanagement, found themselves further crippled by the Gupta’s influence. The diversion of funds into these corrupt schemes exacerbated the operational challenges, leading to significant economic losses and public distrust.
Economic Impact Highlights:
- Over R173 million funneled into sponsorships by Eskom and Transnet alone.
- Minimal branding and exposure achieved through these high-cost events.
- Reputational damage to state-owned entities due to perceived complicity.
The loss of integrity within these institutions has eroded public confidence, making recovery and reform efforts even more challenging. The social fabric of South Africa has also been strained, with widespread public outrage and demands for accountability driving the narrative around state capture.
Government’s Response and Ongoing Investigations
In response to mounting evidence and public pressure, President Cyril Ramaphosa has taken decisive action. Earlier this month, he authorized the Special Investigating Unit (SIU) to probe the extensive maladministration linked to the breakfast briefings. This probe encompasses hundreds of millions of rands spent by entities like Transnet, Eskom, PetroSA, SAA, and the Department of Human Settlements.
Rajesh Sundaram, former editor of ANN7 and a key figure in the Gupta media operations, hailed the government’s decision to initiate the probe. “The announcement of a probe by the SIU was long overdue,” Sundaram commented, emphasizing the necessity of accountability in dismantling entrenched corruption networks.
The Broader Implications of State Capture
The Gupta family’s state capture efforts illustrate a sophisticated blend of media manipulation, political lobbying, and economic coercion. By leveraging their media outlets and forging strategic alliances with influential government officials, they effectively undermined the democratic institutions and governance structures of South Africa.
This case serves as a stark reminder of the vulnerabilities within public sector systems and the critical need for robust oversight mechanisms. The ongoing investigations aim to unravel the extent of the Gupta’s influence and restore integrity within the affected institutions.
Lessons Learned and the Path Forward
The revelations surrounding the Gupta TV breakfasts and the broader state capture agenda underscore the importance of transparency and accountability in governance. To prevent similar instances of corruption, several measures can be implemented:
- Enhanced Oversight: Strengthening the oversight functions of government departments and state-owned enterprises to detect and prevent undue influence.
- Media Independence: Ensuring the independence of media outlets from political and economic interests to uphold journalistic integrity.
- Whistleblower Protections: Providing robust protections for whistleblowers who expose corrupt practices within their organizations.
- Public Accountability: Increasing public participation and scrutiny in government dealings to foster a culture of accountability.
As South Africa continues to grapple with the fallout of state capture, the lessons learned from the Gupta family’s orchestrated influence campaigns will be crucial in rebuilding trust and establishing a more resilient and transparent governance framework.
