Politics

#StateCaptureInquiry hears of dodgy contract for Vrede diary beneficiaries

#StateCaptureInquiry hears of dodgy contract for Vrede diary beneficiaries

JOHANNESBURG - The state capture commission of inquiry on Tuesday heard how an illegal agreement was drafted by the Free State department of agriculture listing beneficiaries for the botched Vrede dairy farm project and contained clauses that did not fit with the nature of project.

Albertus Venter, a deputy director-general of corporate administration and co-ordination in the provincial premier's office, took the stand for the second day, detailing agreements and contracts on the dairy project that saw intended emerging black farmers ignored and more R200 million allegedly looted by officials and the fugitive Gupta family.

Venter said he was presented with the signed dodgy contract between the department and beneficiaries by the chief director for district services in 2013.

"Dr (Takisi) Masiteng was the chief director for district services and came to my office along with people I didn't know. He submitted to me drafted and signed agreements. My opinion was sought on beneficiary agreements. I was also presented with names of other beneficiaries not appearing in contract  I briefly looked at contract, and was quite annoyed about what I read," said Venter.

"I asked Dr Masiteng if he was delegated by the department to sign and he said no. I told him that the agreement is not valid because he was not properly delegated. They left my office and we had no further discussions on beneficiaries agreements."   

Dr Masiteng was one of the accused in the Vrede dairy court case that has since been provisionally withdrawn in the Bloemfontein Regional Court.

Venter said the agreement had problematic clauses that stipulated that beneficiaries could dispose of the assets, meaning they could sell their stake in the project anytime, although the project was a contract between the department and the Gupta-linked Estina company contracted to partner in the venture.

"I wasn't clear what was transferred to beneficiaries...it was just stated 'project transferred'. Also chairperson, this was not an agreement with a corporate but just individuals. Another clause said that beneficiaries could dispose of assets... I said to Masiteng, so this means beneficiaries can dispose of the whole project tomorrow, whereas the department spent a lot of money on it. I told him the agreement is totally inappropriate for what it was intended for."

Deputy Chief Justice Raymond Zondo asked who drafted the agreement.

"Even the description of the parties on the first page is just not on. I mean, a project can't be a party to an agreement...who drafts these kind of agreements?" Zondo queried.
 
Venter replied: "Chairperson, I have no idea...it was not right to allow beneficiaries to deal with a project in that way."

Zondo said the illegal agreement was an important indication that projects should not be finalised before they were sent to legal advisers.

Zondo asked Venter why the department paid Estina a R106 million cancellation fee when the company did not make financial contributions as per agreement with the department. 

DA member of the Free State legislature Roy Jankielsohn on Monday testified that Estina ended up pocketing R106 million, plus an additional R30 million by 2016. 

"The department didn't have to pay Estina if it was owed money for the project...the department made a contribution and Estina didn't, but it acknowledges owing Estina R106 million. Why?" Zondo asked Venter.

The Free State official said his understanding was that Estina constructed a milk processing shed on the farm.

"The R106m was for what was constructed on the farm from which department would benefit upon cancellation of contract. The project didn't proceed to logical conclusion and was terminated. My understanding is that Estina was to construct a processing plant on the farm."

Jankielsohn had testified that Estina continues to receive R20 million a year even today, despite the botched project having been cancelled in August 2014.

The commission will also hear testimony from Meshack Mpaleni Ncongwane and Ephraim Makhosino Dhlamini, two of the beneficiaries from Thembalihle township in Vrede who were supposed to be part of the project.