In the end, the money is said to have reached the recipient in bundles of 200-rand bills – transported in travel bags, backpacks and sports bags. This is what the report of an official commission of inquiry in South Africa says, which completed its work in June.
It is about corruption under President Jacob Zuma, who left in 2018, and about processes in a number of state-owned companies, such as the railway company Transnet or the energy supplier Eskom.
A German company is also mentioned on dozens of pages that is now being targeted by the public prosecutor’s office in Frankfurt am Main: T-Systems, a Frankfurt-based subsidiary of the partly state-owned Deutsche Telekom. A procedure is pending in the matter, the public prosecutor’s office has now confirmed at the request of WELT AM SONNTAG and the “Correctiv” research network. Paul Holden, co-head of the Shadow World Investigations organization in London, which specializes in corruption investigations, had triggered the process with a criminal complaint.
Specifically, the allegations against T-Systems relate to their business with the South African railway company Transnet. According to figures evaluated by Holden, the Telekom subsidiary received IT orders totaling almost 300 million euros by 2019 – for services and the delivery of computers. In addition, T-Systems is said to have landed orders for a similar amount at Eskom. At the same time, the South African branch of the German company is said to have made dubious payments in the millions by the end of 2017 to an intermediary company that is attributed to the network of the notorious Gupta brothers.
These businessmen, who emigrated from India, are accused of being able to secure large-scale South African government contracts thanks to their contacts with President Zuma. Because of their oversized influence on the government’s procurement decisions, the term “state capture” was used in South Africa.
As recently as June 2022, two of the Gupta brothers were arrested in Dubai. When Transnet managers visited their property in the Saxonwold villa district of Johannesburg, the bundles of 200-rand notes are said to have changed hands. However, the investigation report does not say whether the money that was distributed there came from T-Systems.
The Transnet managers at the time, the Gupta brothers and Zuma deny allegations of corruption. But an internal report by T-Systems’ compliance department dated June 24, 2015, which is available to WELT AM SONNTAG and “Correctiv”, puts a strain on the management of the German company. Two auditors complained about “significant violations” of prescribed approval procedures for consultancy contracts. Purely informal agreements on payments have been concluded with companies from the Gupta network. Such business relationships are “not acceptable”.
However, the compliance report also sounded dismissive at times. The auditors wrote that they found “no evidence of corruption or other illegal conduct”. Perhaps this contributed to the fact that, according to a report by the South African commission of inquiry, T-Systems continued to make payments to one of the Gupta network companies until December 2017 despite the warnings.
According to the calculations of corruption critic Holden, T-Systems was the Western company that benefited most from the controversial practices. A manager who held a key position at T-Systems in South Africa from 2010 to 2014 was promoted to a managerial position for the company’s global operations in April 2021. How had the company previously explored your role in South Africa?
A spokesman for the T-Systems parent Telekom has now assured on request that no violations of the law are tolerated, that “where necessary” immediate “remedial measures” have been taken, that certain business relationships have been terminated and reversed and that the subsidiary in South Africa will finally be sold in 2020. The company has “no knowledge” of an investigation in Frankfurt. The South African investigation report also contained “no recommendation” to prosecute employees of T-Systems or the company.
The South African Commission’s report contains bizarre details about the T-Systems deals. Inspectors at Transnet are said to have found out in 2015 that the railway company paid the German company for 2,200 computers, although only 1,100 arrived. Another 450 computers were delivered, but then disappeared again.
The report also describes what happened to a courageous manager at Transnet who resisted further orders from T-Systems because a competitor had done better in a tender in 2016. The manager is said to have been threatened by her boss at some point: Procurement issues could be “a life-threatening matter” – if you “ruin a party”.
The fact that T-Systems was connected to the Gupta brothers, who were already notorious at the time, had long been publicly discussed in South Africa. The head of the candidate company that was defeated at Transnet, Maphum Nxumalo, had already demanded criminal investigations in 2017: “We are dismayed and disillusioned that large German companies are involved in state appropriation and corruption with impunity, while local companies are cheated out of orders,” said the manager in November 2017.