Dear Reader: Time for reckoning

As this issue of Noseweek went to press, the final steps were being taken to oust Jacob Zuma from the presidency. Cyril Ramaphosa was poised to be installed as our new president, determined, so he has declared, to crack down on the corrupt in government whose thefts and frauds have demoralised the nation and left the state bankrupt.

Other developments in Parliament suggest he might not be long enough in power to do much about it.

There’s no denying it: South Africa is drowning in a sea of corruption. It’s never been as bad as this.

Corruption is driven less by poverty, more by greed, a sense, or culture, of entitlement, and opportunity. The trend is set by those on top of the social and economic pile.

The powerful in politics and business not only inspire corruption by example; they actively condone it, if only because they themselves are so compromised.

Zuma is, on an overwhelming balance of probabilities, guilty of having solicited bribes paid in relation to the Arms Deal in 1999. The entire ANC leadership structure is compromised by the Arms Deal. The arms deal commission report, a whitewash produced by Judge Willie Seriti simply added insult to injury.  Zuma’s criminal prosecution on the long-ready Arms Deal charges should proceed as a matter of priority – for sanity’s sake.

Since then, the Nkandla scandal and many more involving his sons and other relatives have blighted his time in office. Under his protection, the Gupta brothers seized effective control of a large portion of the state’s finances. Perhaps more serious is what he has condoned: the myriad of bribes taken and frauds committed by his party colleagues.

In this issue we report on an outrageous case involving a member of the KZN party elite that could just herald the new anti-corruption drive.

But what of the corrupt in big (mainly white) business? What about the Vodacom directors and executives who sit back and enjoy the massive profits they quietly gather by partnering with criminal “content providers”, so-called WASPs, in unlawfully pocketing airtime fees? (Vodacom takes an up to 50% cut.) The loot over recent years could total billions, putting them in a league with the Guptas.

And what about the JSE’s favourite clients, the Resilient Group?

Recent events call to mind an extraordinary judgment by acting Judge N A Cassim in the South Gauteng High Court in February 2015 in an application by various bankers and brokers involved with the Resilient property group against Magistrate Theresa Swart and officers of the East Rand Organised Crime Unit. (nose191.)

Three years earlier the police began an investigation not unrelated to various Noseweek reports about insider trading and serial frauds allegedly committed by some of the directors of the Resilient companies (See noses136; 137) in a scheme to ramp and churn their shares. On the application of the police, magistrate Swart issued subpoenas requiring various banks and brokers to make their records available for inspection, to track the dealings of the suspects. But over the following three years the suspects and their bankers launched several applications to suspend or set aside the subpoenas, stalling the investigation for all that time.

The Resilient directors, bankers and brokers wanted the subpoenas set aside on the grounds that the police officer who had applied for them was known for using such warrants for corrupt purposes. Their own attorneys, Werksmans, and private investigators SSG, employed by that illustrious law firm, had previously used him for such corrupt purposes, they brazenly stated in a supporting affidavit.

Acting Judge Cassim prefaced his ruling with an assessment of the current state of law enforcement in South Africa: “It is necessary …to put an element of realism in what is sought in this application …in the context of the state of law and order in our country. …the administration of criminal law is in tatters… The leadership within the current NDPP is in turmoil and this does not inspire prosecutors to dedicate themselves to the arduous task of properly prosecuting crime in a crime-ridden country… nor is there a civil service with the ethos [necessary] to do civic duty. It is no secret that the government of the day considers it necessary to staff public positions with its supporters under the guise of transformation when what the country needs is good and able people to manage the organs of state to realise the greatest good for the greatest number of people.

“Recently, the Supreme Court of Appeal observed that there may be merit in the perception of ordinary people that we have two systems of law, one for the wealthy and the other for the poor. In particular that wealthy people… are better placed in dealing with criminal charges and avoiding conviction and… incarceration.

“It is a regrettable but true feature of criminal practice that criminal lawyers … utilise private investigators who in turn have a network of policemen to do their bidding. So rampant is the practice that Werksmans, a major Johannesburg law firm, do not query or find it distasteful to hire private investigators SSG, who they know have an untoward relationship with senior policemen...

“It is no secret …that …to obtain a successful prosecution it is useful, if not necessary, to obtain the services of private criminal investigators to, literally, prepare the docket on behalf of the police… A country that has as its functional officers… people who cannot do the job, does not serve the interests of its people… The starting point: not only the state, but the legal profession itself, have to be imbued with a value system in terms of which wrongful conduct is frowned upon.”

The judge suspected that the application to set the subpoenas aside had less to do with preserving respect for the law and was more likely intended to delay the investigation to the point where it would simply be abandoned. He ordered that the NDPP be given immediate access to the subpoenaed documents, in order to proceed with the criminal investigation without delay; a senior prosecutor was to be appointed to supervise the police investigation.

Judge Cassim added that Werksmans, their investigators SSG and their clients, have as much to explain as the policemen they corrupted.

Three years on, nose196 published a recap of the story, adding only one new sentence: “There is still no sign that the police investigation has resumed.”

Meanwhile, the criminal activity at the Resilient group has proceeded apace, now involving multiple billions. The four listed entities until recently made up as much as 40% of the South African listed property sector’s value and were widely held by pension fund managers such as the PIC, StanLib and Old Mutual.

Recently the share market has started contemplating a collapse of the ponzi-like pyramid constructed by the Resilient masterminds. Forensic analysts are having a closer look at what Noseweek revealed years ago. Resilient has lost 40% of its value.

Some rats are quietly leaving the sinking ship: the Guptas and friends to Dubai, the Bank of Baroda back to India in a hurry before they can collect a judgment for damages. Des de Beer, Resilient’s main man, moved his shareholding, worth billions, to Namibia in December. Why? A guess: it is the now recommended softly-softly route to Mauritius, out of reach of SARS, the Reserve Bank and the police. Family members have been sent on short holiday trips to the Caribbean.

Watch this space.

The Editor

content provider fraud
N A Cassim
Resilient Group
Des De Beer
Pyramid scheme
Old Mutual
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Submitted by : Clive Varejes of GALLO MANOR on 2018-04-08 09:13:03
I am somewhat mystified as to why it is only Vodacom that is being lambasted regarding the WASPS and their fraudulent charges.

I have the exact same problem with MTN.
I have been a client of MTN for over 20 years and had made it clear to MTN both verbally and in writing that under no circumstances would I permit or allow any charges from any "content providers" to be billed to my account.
But guess what?, and I must make it clear that this is only the second time in that period, I found that over the last 2 months I had been charged R7.00 a day for some mysterious service I had certainly never subscribed to, or knew anything about.
When I telephoned to 'discuss' the matter with them and instruct them to stop it immediately, I was told that their systems were down and I would have to do it myself.
I finally managed to get hold of the fraudulent company and had it stopped, however of course I would receive no refund.
However as MTN debited my account, as far as I am concerned it is their responsibility to refund me. They, of course, disputed this fact.
I have explained to them that, if they did not, I shall have no hesitation laying a charge of fraud and theft against them, along with a myriad others, with the SAPS.

Editor's Note
Noseweek has frequently referred to the fact that MTN, too, happily shares in the profits of crime, but we have chosen to focus our attention, for now, on Vodacom as the major miscreant in the hope of mobilising the police and prosecuting authorities who appear to be too cowardly to take on big business and their big-time lawyers. Please identify the fraudulent company and the "service" they allegedly provided, and explain how you managed to make contact with them, so that we can follow up on your case.
Submitted by : Vic De Valdorf of MUIZENBERG on 2018-03-09 15:03:50
Ed, you mean if i had kept up with Nose i shouldn't have bought them in the first place. I obviously missed the memo.

Editor's Note
No need to feel too bad about that – so, obviously did the JSE, and Old Mutual and Coronation (where, in any event, profit comes before principle).
Submitted by : Vic De Valdorf of MUIZENBERG on 2018-03-08 23:15:48
I've just read, belatedly it seems, issue 221. Seeing I have some Fortress A and B shares [Fortress is part of the Resilient group], I thought I might get rid of them before the shit hits the fan. Seems I've been too busy lately to look carefully at my small portfolio and also put the lower value down to the Steinhoff debacle. However, on closer inspection I see my B shares have gone down 60% over the past month. I'm going to sell both Fortress A and B shares on principle as these crooks (along with Steinhoff, etc) are making us poorer. I'd be better off at the casino. At least they offer free drinks.

Editor's Note
I would have thought that, as a matter of principle, you should have sold your Fortress shares a good long while ago: Noseweek revealed the fraudulent operations of the directors and their associates years ago - see noses 136 and 137. And again as recently as nose 191.
Submitted by : D R Gohl of HELDERKRUIN on 2018-02-24 10:16:34
When, if ever, will a bank be subpoenaed to show full details of where the money went?
No one here is being bribed with bribes paid in cattle or wheelbarrows of mielies.
Do the banks have something to hide?

Editor's Note
There is every indication here that the banks do have something – a lot – to hide. It is noteworthy that they only ran for cover when the Guptas became a hot public issue. Public exposure was the risk they were/are worried about. Prior to that they were happy to do the massive cash transfers to funny destinations.


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