The second state capture whistleblower in a week to have been hit by a ‘suspicious’ break-in. From Moneyweb.
Former South African Revenue Service (Sars) whistleblower Johann van Loggerenberg’s house was burgled in the early hours of Tuesday (January 18), just days after Themba Maseko, former CEO of the Government Communications and Information Systems (GCIS), was burgled while he and his wife were sleeping.
The burglary at Van Loggerenberg’s house was confirmed on Tuesday afternoon by his attorneys, Werksmans.
In a statement released by Werksmans, Van Loggerenberg says the break-in at his house on Tuesday morning may be a crime of a general nature, given the poor state of SA’s criminal justice system and the country’s high crime levels.
“However, entry was attempted with some sophistication via various entry points at my home in a very suspicious manner. I have reason to suspect that there is a possibility that it was no ordinary crime,” he points out.
“Four very distinct indicators of the house robbery suggest that it may not have been ordinary criminal conduct. I am deliberately not explaining these as it may be of value to the police that are investigating the matter,” he adds.
Van Loggerenberg becoming the second state capture whistleblower within a week to be hit by a house break-in raises red flags as it comes just weeks after the release of the Judicial Commission of Enquiry into State Capture Report (aka the Zondo Report).
In Maseko’s case, there was no evidence of forced entry and the burglars – who scattered when he fired warning shots into the air – appear not to have triggered any alarms, creating suspicion that this was a highly organised break-in. Maseko was a whistleblower removed by former president Jacob Zuma from GCIS in 2011 for obstructing the Gupta family’s capture of the state.
Van Loggerenberg became a key whistleblower when Sars was targeted as part of state capture.
“I record that I am a whistleblower of State Capture events at the Sars and the Criminal Justice System and State Intelligence Agencies as from 2014 onwards. I was a witness at the so-called Zondo Commission on matters pertaining to the South African Revenue Service and our State Intelligence Services,” his statement on Tuesday notes.
“I am also a complainant and state witness in matters under investigation by the Inspector-General of Intelligence and the Independent Directorate of the National Prosecuting Authority. This is public knowledge.
“Those I have implicated are aware of the nature of the evidence against them. I have had to live with receiving various threats and warnings against my safety for many years, from as far as 2014 and onwards,” Van Loggerenberg adds.
“I have always reported these to the relevant authorities. At no stage has the Sars, State Intelligence Agencies, police [or] any other relevant authority responded to my requests for assistance in dealing with the threats against me to date in any manner or form.
“I have always had to address these risks at my own cost,” he says.
Van Loggerenberg’s statement laments the lack of concern shown by authorities for whistleblower safety.
“We only have to refer to well publicised cases where whistleblowers and state witnesses had been assaulted, threatened, surveilled, murdered, or had to leave the country for their own safety.
“Many of us have been victims of suspicious house invasions, theft and threats. I am not the only State Capture witness who has been a victim of a break-in in the last week.”
He goes on to call on government to take decisive action to protect whistleblowers.
To those who perpetrated the break-in at his house, Van Loggerenberg says they are sadly mistaken if they believe they deprived him of evidence. What they managed to steal were mere copies of the actual evidence [of state capture and criminal activity] and the proper records are kept elsewhere.
“I call upon all South Africans to join all efforts to ensure that the government takes the safety of whistle-blowers and state witnesses seriously. We can no longer afford the existing lip-service and no action,” he says.
Maseko wrote a book about his ordeal at GCIS, entitled ‘For My Country: Why I Blew The Whistle on Zuma and the Guptas’.
Van Loggerenberg is likewise the author of several books detailing his investigatory work at Sars, including Tobacco Wars, and Death and Taxes.
Energy transition, companies that ignore environmental and social impacts, and revenue collection. From Moneyweb.
One of the great ironies of the energy transition away from coal is that it relies massively on mining companies producing metals such as iron, copper and lithium.
The problem is that these mining operations are shunned by financiers, which in turn is likely to slow down the energy transition, according to Chris Holdsworth, chief investment strategist at Investec Wealth and Investment.
Energy transition winners and losers
“One of the big themes we see over the course of the next year is the energy transition and who benefits from that,” says Holdsworth.
“There is a push for the electrification of everything, which is ironically good for mining companies involved in the production of metals used in electrification, such as copper, lithium and others. This is reflected in the prices of these commodities. For example, the price of lithium in China is up six-fold over the last year.
“Companies are facing additional costs that were scarcely recognised just a few years ago – what are generally called externalities. We’re seeing an increase in carbon taxes and the pricing of carbon through the carbon trading mechanism. That’s just one externality, one of many that needs to be properly accounted for in any ESG [environmental, social, and governance] analysis.”
The energy transition requires massive construction over the coming years which in turn will drive the demand for materials, particularly metals.
The rise of ESG-focused investment
Therein lies the irony. Mining companies are in the crosshairs of environmentalists pushing for clean energy.
That’s put a chokehold on financing for new projects aimed at bringing about the very transition the environmentalists demand.
“This is likely to slow down investment into the companies needed for the energy transition,” says Holdsworth.
“This may have a positive effect on mining companies and force them to accelerate their compliance with more stringent ESG standards. The pressure is coming from two sides: environmental pressure groups and regulators.”
Mining companies that embrace clean energy and tighter ESG standards are likely to attract a premium, adds Holdsworth.
“We expect to see inflows into funds that focus on ESG. This will encourage regulators to push through regulations to reinforce this trend.”
Among active fund managers, only those focused on ESG received net inflows over the last two years, part of a trend that is likely to intensify over the next decade, as passive funds continue their dominance of the investment landscape.
Pessimism about SA appears misplaced
Given the recent report by the Zondo Commission into Allegations of State Capture and a slew of negative press reports, it is easy to allow this to influence investment decisions where SA companies are involved.
SA stocks are priced on a forward price-earnings (PE) ratio of 12, relative to 24 in the US.
“SA equities are at a 50% discount to the US,” says Holdsworth. “The expectations for SA growth in 2022 are very modest, which is somewhat surprising given a rather robust global environment.
“We have very low interest rates in SA, but the market is saying that interest rates will go up nine times, based on forward rate agreement market, which is anticipating nine increases in rates of 0.25% each.
“We don’t quite see it this way, for a number of reasons,” says Holdsworth.
“In addition, government revenue continues to be extraordinarily strong. Government has already revised up revenue expectations in the medium-term budget, but there could be R50 billion more revenue than was expected in November 2021, in large part because of strong commodity exports.
“Commodity exporters are required to render unto Caesar, and that has pushed up tax collections.”
Formal sector incomes are 7% higher than they were in 2019, and this has further pushed up tax collections.
This poses the interesting possibility of a tax cut, adds Holdsworth. “Very few people consider this as a real possibility, but we believe it cannot be discounted.”
SA is also blessed with relatively low inflation and low interest rates. Inflation in SA is slightly below 6%, and for the first time since 2004, SA’s interest rates are below the median for emerging markets.
The economic conditions are not unlike those the country enjoyed in 2004 at the start of the economic boom that ended in the late 2000s. The only problem this time is that Eskom lacks sufficient capacity to sustain economic growth rates of 5%, such as experienced in the late 2000s.
Holdsworth says sectors that are likely to benefit are commodities, banks, and retail.
But residents association spokesperson says it’s too early to declare victory as the municipality may appeal the judgment. From Moneyweb.
Residents of Govan Mbeki Local Municipality are celebrating a judgment handed down by the Mpumalanga High Court last week which orders the municipality to report regularly to the court on progress made in settling its R1.18 billion Eskom arrears bill.
“It’s an important victory for residents in that it makes the municipality accountable to the court and to residents,” says Waseem Gani, an attorney at MacRoberts Inc, who is representing the residents in the case.
The municipality had fallen so far behind in paying its Eskom arrears that it was forced to introduce rotational load shedding that resulted in power outages lasting 10 to 14 hours a day.
The residents association that brought the case was the Bethal and eMzinoni Community for Services Association. Seven respondents were cited in the case, including Govan Mbeki Municipality, Gert Sibande District Municipality, Eskom and the Mpumalanga provincial minister of Co-operative Governance and Traditional Affairs.
‘Maximum demand’ agreement
Eskom and Govan Mbeki Municipality agreed on a Notified Maximum Demand (NMD) for certain areas within the municipality, including Bethal, eMzinoni and Milan Park.
This placed limits on the amount of power Eskom would provide to the municipality. Once the allotted power allocation had been used, the municipality was forced to introduce localised load shedding.
The municipality approached Eskom in 2020 with a view to obtaining an increase in the NMD, but this was refused by Eskom, apparently on the grounds that several previous payment plans agreed by the municipality had been broken.
Residents complained that the municipality had allowed the electrical infrastructure to deteriorate while failing to resolve its arrears bill with Eskom.
Residents still wary
Spokesperson for the residents association, Ziady Dangor, says it’s too early to declare victory in the matter as the municipality may well appeal the judgment, using ratepayers money to fight a hopeless legal battle.
“If they appeal the matter, we see another tough winter ahead of us, with daily power cuts,” adds Dangor.
“They will use the appeal to continue the same old behaviour that brought us to court in the first place.
“It has been 20 months since we started this legal process, and not once did anyone from the municipality approach us to sit down and talk.
“Only 2% of municipal officials in our town actually live here, so they do not bear the brunt of their mismanagement. We, the ratepayers and residents have to bear that brunt,” he points out.
Dangor says some residents are now talking of a rates boycott, which would mean withholding a portion of the rates owed and using that to fix potholes and other infrastructure that is the responsibility of the municipality in terms of the constitution.
The only potholes that have been repaired in the area are those funded by residents and AfriForum, he adds.
‘Hopeless’ at service delivery
“The municipality has two mandates – one to provide basic services to residents, the other to charge for these services,” says Dangor.
“They [the municipality] have been ruthlessly efficient at charging and collecting rates, but hopeless at delivering services.”
Gani says residents are hopeful that the judgment handed down on Friday (January 14) in favour of the community will be the start of a process to resolve the electricity crises in the area.
“The judgment places the municipalities under a court order compelling them to provide continuous reports to the court regarding the electricity crises and the progress made in resolving their issues with Eskom.
“Should they fail to do so, the community will be entitled to apply to hold executive members of the municipality in contempt of court,” he adds.
Gani notes that the high court will now play a supervisory role to ensure that the municipalities are carrying out their constitutional mandate to the community “as they were not doing so on their own”.
An aspect of the judgment that has given cheer to residents is that the community has been given leave to approach the court again for relief on the same set of papers should it be found that the municipalities and Eskom are failing to make the necessary progress in resolving the electricity crises.
“We are hopeful that this is the start to better and brighter days for the residents of Bethal, Emzinoni and Milan Park,” says Gani.
This is a huge leap in returning the towns of Bethal and eMzinoni to their former glory, according to Dangor.
“The infrastructure is very neglected. Govan Mbeki Municipality runs many towns under its administration and Bethal and eMzinoni [have] been neglected for years.”
Since the court process was launched 20 months ago, the arrears amount owed to Eskom by the municipality has grown from R1.18 billion to R1.9 billion.
“We do not expect the problems to go away immediately but we are hopeful for a better future for the residents and businesses going forward,” adds Dangor.
“The communities of Bethal and eMzinoni have realised that there literally is no other sustainable option but to go the legal route to get a totally mismanaged and incompetent municipality accountable for service delivery and specifically the supply of electricity,” he says.
“Govan Mbeki Municipality is accountable for the towns of Secunda, eMbahlenhle, Evander, Kinross and Trichardt.
“It is a failed state organ with no signs of service delivery improvement,” says Dangor.
“The state of neglect is so severe that it is to be expected that the problems will not go away immediately. The court ruling imposing a structural interdict on Govan Mbeki Municipality is a first, significant step to bring this state organ to accountability.”
Luno sees regulation as a long-awaited and positive move for the industry. From Moneyweb.
Two trends you can count on for 2022: crypto regulation and the arrival of central bank digital currencies (CBDCs).
Also expect to see more formal links between crypto players and financial services companies, according to crypto exchange Luno.
“Globally, we have seen moves to regulate crypto and we anticipate the introduction of a clear South African regulatory regime likely by the end of 2022. Regulatory certainty will have a host of positive spin offs for the crypto sector,” says Marius Reitz, Luno’s general manager for Africa.
Local asset managers are working behind the scenes to design crypto products and solutions in anticipation of regulation.
Previous attempts to list a Bitcoin ETF (exchange-traded fund) on the local stock exchange have not been successful, but the listing of crypto instruments on the JSE will be a watershed moment that will allow asset managers to enter crypto.
Financial Sector Conduct Authority (FSCA) head of enforcement Brandon Topham tells Moneyweb that regulation is imminent, and somewhat overdue.
Luno says in the US, where some degree of regulation is in place for crypto companies, firms like Fidelity, Goldman Sachs and JP Morgan are entering the crypto market and the ProShares Bitcoin ETF (the world’s first Bitcoin ETF) saw record inflows into the fund.
Regulation will also boost the number of formal partnerships between banks and crypto companies, which will facilitate greater crypto adoption.
Once regulation is finalised, financial advisors will be able to propose crypto products and services to clients. Luno is partnering with such businesses to ensure that customers can enter crypto investments through their trusted financial advisors.
Louis van Staden, global head of payments at Luno, expects to see the launch of more central bank digital currencies (CBDCs) in 2022. “Nigeria has launched the e-Naira and South Africa is investigating a digital currency. CBDCs are significant because they represent a meeting point between how the technology can be leveraged and a comfortable space for regulators,” he says.
Crypto players will be investigating ways to incorporate familiar tools like cards and mobile money in the crypto ecosystem.
“Open banking, where financial institutions share information about customers, is already quite prominent in the UK and Europe. It is quick, and information can easily be shared across multiple institutions.
“Ultimately, systems that make transacting simpler are sure to gain traction,” says Van Staden.
Eva Crouwel, global head of financial crime at Luno, says while customers are quicker to report financial irregularities than in the past, incidents such as ransomware and email interceptions have been on the rise since the advent of Covid.
“The shift away from being purely office-bound has its perks, but we are seeing significant vulnerability in corporations, which leads to users being tricked into sharing corporate account information or money,” she says.
Europe is becoming more of a financial crime hotspot, with criminals targeting vulnerable and high-net-worth people in France, Italy, Germany and those living in the larger cities in the UK.
“During 2021, the crypto market experienced new all-time highs and also took some brutal hits,” says Luno in a statement.
“Cryptocurrencies are still a new alternative asset class and ongoing volatility is expected. A longer-term view shows crypto keeps its upward trajectory even with occasional massive price drops.”
The metal has historically performed well in periods of high inflation. From Moneyweb.
For gold bulls, these are frustrating times. In rand terms, gold bumped up a mere 4.1% in 2021, but dropped 4.3% in US dollars.
Investors lavished with triple digit returns in cryptos may find this rather unappealing, but gold tends to do well in times of higher inflation, such as is expected in 2022.
The Gold Outlook 2022 report from the World Gold Council gives a glimmer of hope to those holding, or planning to acquire, gold in their portfolios.
“Gold has historically performed well amid high inflation. In years when inflation was higher than 3%, gold’s price increased 14% on average. Further, in the long run, gold has outpaced US inflation and moved closer in pace to money supply, which has significantly increased in recent years,” says the report.
The US Federal Reserve has indicated that it may hike interest rates three times this year while reducing the size of its balance sheet, but the World Gold Council cautions that previous cycles where interest rates were hiked ended up being less aggressive than originally expected.
“Financial market expectations of future monetary policy actions – expressed through bond yields – have historically been a key influence on gold price performance. Consequently, gold has historically underperformed in the months leading up to a Fed tightening cycle, only to significantly outperform in the months following the first rate hike,” adds the Council.
Gold price graph
Other central banks are less enthusiastic about raising interest rates, which could support a stronger US dollar. Steady or decreasing interest rates may underpin gold demand across the world.
The council warns that inflation may linger a while longer than expected due to Covid-related supply chain disruptions, tight labour markets resulting in more people leaving their jobs for better paid opportunities, high commodity prices and higher average savings which have contributed to lofty valuations in various financial markets.
Stock market pullbacks remain a risk as new Covid variants manifest in an environment of rising geopolitical risks and frothy equity valuations incubated in an ultra-low interest rate environment.
Gold is likely to face headwinds from higher nominal interest rates and a potentially stronger US dollar in 2022. Offsetting these headwinds are high, persistent inflation, market volatility linked to Covid and geopolitical events, and robust demand from sectors such as central banks and jewellers.
Six years after going into business rescue, the future of the mine must now be decided by the Supreme Court of Appeal. From Moneyweb.
It has been nearly three years since the families of Solomon Nyirenda, Yvonne Mnisi and Pretty Nkambule set up camp outside the gates of Lily gold mine in Mpumalanga, awaiting the revival of a mine that was shut down and placed in business rescue after a key support pillar collapsed and sent the container in which they were dispensing safety equipment crashing into the bowels of the earth.
The container, and their bodies, remain there to this day.
“We moved here on the 30th of April 2019, just before Workers Day [May 1], to draw attention to our predicament,” says Harry Mazibuko, spokesperson for the families and a former Association of Mineworkers and Construction Union (Amcu) official working in the mine.
On Tuesday (January 25), the families will have been camped outside Lily mine for 1 000 days. It’s an extraordinary and solemn vigil that the families say will not end until they get closure on the fate of their loved ones.
Given the remoteness of the mine in rural Mpumalanga, the families realise they are far from the public eye and their vigil goes largely unnoticed.
In the hope of highlighting their plight, they invited Moneyweb to hear their stories.
When the pillar collapsed on February 5, 2016, 76 miners were trapped underground. Thembi Nkosi Makhabela, a former drill rig operator at Lily, was one of them.
“The accident happened at about 8am, and I was on seven level underground. We were able to get to a safe place where we knew rescue operators would find us.”
The mine and all its working infrastructure ground to a halt, leaving the trapped miners to make their way through the dust and the confusion to prearranged assembly points. As part of their safety training, miners are prepared for events such as this.
By the end of the day, rescue workers managed to locate the missing miners and bring them to the surface. All but Solomon Nyirenda, Yvonne Mnisi and Pretty Nkambule.
Elmon Mnisi, father of Yvonne and also an underground mine worker, trembles with emotion when reflecting on that terrible day that his daughter disappeared into the depths of the mine.
His anger is directed at the Vantage Goldfields mine management whose neglect, he says, allowed this to happen.
The exact causes of the pillar collapse are the subject of an ongoing magisterial inquest which resumes later this month and will hear testimony from rock engineers as to how the so-called crown pillar came crumbling down, and whether it was through neglect or accident.
Family members say they have had little contact with mine management since the accident happened, but this is disputed by Vantage Goldfields CEO Mike McChesney.
“I’ve engaged with the families many times since the accident and always had good relations with them until Fred Arendse [Arqomanzi’s BEE partner] came along and started throwing largesse their way,” he claims.
“Since 2019, my relationship with the family soured and I was chased away from the encampment. The camp exists as long as it has because it is a sponsored event and is an attempt to embarrass Vantage, but most of the surrounding community sees through this,” adds McChesney.
Arendse told Moneyweb that his company Siyakhula Sonke Empowerment Corporation (SSC), part of the Arqomanzi consortium bidding for control of the Barbrook and Lily mines, has spent R1.13 million on food for the families over a period of five years, and a further R61 000 on schooling for the six orphaned children of Yvonne Mnisi and Pretty Nkambule (Solomon Nyirenda had no children).
“Originally, the families set up camp within the mine where they could pray for their missing family members, but they were very brutally thrown out of the mine when Vantage and the business rescue practitioners got an interdict against them,” says Arendse.
“They then started camping outside the mine and they asked for help. I purchased a tent for them when I was asked and every week I provide money for some food. How can you not support people in these desperate circumstances?”
In the battle for the future of Lily and Barbrook, there are multiple competing viewpoints about what went wrong, at whose hands, and why.
Says Mazibuko: “We are camped here because we want closure. This mine didn’t come from a tree. It has owners and managers. Those responsible must be held to account – if they are found responsible. What we know is that rock engineers warned of the potential for this pillar to collapse years before it happened.”
The incident has scarred the community, not least for the tragedy of the three missing mine workers. The shutdown of the Lily mine and its sister Barbrook mine, a short distance away, robbed the nearby town of Louisville of its soul and its oxygen.
More than 700 mine workers lost their jobs and many of them remain unemployed.
Sifiso Mavuso, the brother of Pretty, was an accounting student at the University of Johannesburg when the accident happened. He abandoned his studies to care for the family and join the vigil outside the Lily mine gate.
A glimmer of hope returned to the community last year when mining company Arqomanzi, which has put in a proposal to rescue the mines (and wrest control from Australian-owned Vantage Goldfields), paid R15 000 to each of 567 miners as an initial payment of their full claims for wages, and then took cession of their claims against the mine.
The fact that the mine has been shuttered for six years, and remains trapped in the court system, is a source of bitterness among the family members holding vigil outside Lily.
Every day the mine remains shut is an affront to the memory of their loved ones. “Pretty was a good person. She was a pillar to the family, and was the main breadwinner,” says her mother, Lomvimbi Mavuso, fighting back tears.
“All I want is for her to be retrieved.” Pretty’s four children are now raised by Lomvimbi.
None of the families of the missing mine workers are prepared to concede that their loved ones have died – not until presented with the evidence, and that will only happen when the mine reopens and the container in which they were working is recovered.
The timing of that depends in large part on the outcome of two cases before the Supreme Court of Appeal (SCA).
“We have so many questions,” says Rose Mkabi, mother to Yvonne Mnisi.
“Yvonne’s two boys [now aged seven and 16] keep asking ‘When is Mom coming back?’ So I am living here now. I have not gone back home since I moved here in 2019.” The two boys are now raised by their grandmother.
“Solomon [Nyirenda] was a colleague of mine in Amcu and was a health and safety representative for the mine,” says Mazibuko.
“He really cared for people and was a strict and principled man. We had many fights with management over health and safety issues.”
Mazibuko hesitates as a bakkie approaches.
“These are zama-zamas [illegal miners] … they are still working the mine,” he claims.
A few minutes later an SUV whizzes past the assembly.
“That’s the leader of the zama-zamas,” says one of the family members.
(Lily mine’s business rescue practitioner Rob Devereux disputes the claims of family members that illegal mining is happening on site.)
A community under attack
There’s nervousness in the air, and for good reason. Those encamped outside the gates of Lily have been subjected to repeated attacks, some of them by known criminals in the area.
The first attack involved the detonation of an explosive device just meters away from where the families were sleeping. The bomb squad was called out to investigate, though nothing ever came of this.
In the next attack, a few months later, the perpetrators poured petrol over the tent where several women sleep. As the tent dissolved in a fiery blaze above their heads, the criminals told them to stay where they were or be shot when they exited. The young men nearby heard the commotion and rushed to put out the fire, scaring the criminals away in the process.
On another occasion gunshots were fired at the settlement.
On April 8 last year, while community members were meeting with the area chief at his residence, a gang rampaged through the makeshift settlement and torched most of it.
The alleged gang leader, a known armed robber released from prison on parole, will answer for the case in the coming weeks. Community members want to find out who put the criminals up to these attacks, and why.
“I’m amazed at the restraint of the families, given the provocations they’ve endured,” says Neil Herrick, CEO of Arqomanzi.
Mine failures of this kind are seldom without incident, but this one is particularly ugly.
McChesney says accusations have been levelled at Vantage for these attacks, but believes the source of the conflict is inter-community rivalries.
“It’s ridiculous to try to pin the blame on these attacks on us. The perpetrators and their motives are well known in the community.”
Heated accusations from both sides
The two parties fighting for control of the assets are Arqomanzi and Vantage Goldfields SA (VGSA, under whose watch the accident occurred).
Arqomanzi became the largest creditor in Vantage when it acquired, from Standard Bank, loan claims of R391 million and R189 million in Vantage Goldfields and Barbrook respectively. Mimco is the company that controls Lily mine. All three companies (VGSA, Barbrook and Mimco) are under business rescue.
Arqomanzi acquired these claims from Standard Bank for a song (R15.5 million), a strategy deemed ”innovative manoeuvring” by Acting Judge Roelofse in the Mpumalanga High Court in 2019 when Vantage challenged its standing as a creditor.
The court found that Arqomanzi was indeed a valid creditor and ordered that the business rescue practitioners may not unilaterally amend a business rescue process without creditor approval, specifically the approval of the largest creditor Arqomanzi.
Two further court cases were won by Arqomanzi and these are currently being appealed by Vantage at the SCA.
Both sides lay criminal charges against each other
Late last year Arqomanzi, in a note to creditors, accused Vantage of using a forged letter from HSBC as proof of funding – something Vantage has denied.
Herrick has since laid criminal charges against Vantage for trying to pass off a forged letter to creditors, and recently pressed charges against the business rescue practitioners for failing to report the matter to the relevant authorities.
McChesney last week sent out a note to creditors advising that he had laid charges of his own against Arqomanzi, Herrick and Mazibuko, among others.
He further claims Arqomanzi’s allegations against Vantage’s funding proposals are a “false and complete fabrication” and says the company does not have the funding required, nor a valid rescue plan, to reopen the mines – echoing Arqomanzi’s claims against Vantage.
Last week Arqomanzi held an informal meeting with creditors and showed what appeared to be valid proof of funding from its Hong Kong-based backer.
It has taken cession of the majority claims in the companies in rescue, but says the business rescue practitioners are giving it the cold shoulder. Both sides accuse each other of not having valid funding in place to rescue the mines.
“What are we supposed to do?” asks Devereux, one of the business rescue practitioners.
“There are a number of matters still to be decided by the Supreme Court, so we have to let the court process run its course. If the court decides in favour of Arqomanzi, then so be it. Until then we have to let the court decide.”
That’s cold comfort for the family members who wonder whether they will spend the next year camped outside the Lily mine gate, waiting for someone to retrieve the container in which the bodies of their loved ones remain entombed.
South Africans hoping to see their missing Bitcoin may be disappointed: attorney and crypto specialist Darren Hanekom. From Moneyweb.
CIARAN RYAN: Johann Steynberg was arrested by Brazilian military police on December 29, 2021, just before New Year, bringing to an end a year-long hunt for the fugitive behind Mirror Trading international, or MTI.
According to the Hawks, his arrest in Brazil is in relation to cases that were brought in Brazil by the FBI for suspected crimes against US citizens. The FBI is also known to take on cases where US dollars are involved. All of this poses a number of interesting questions.
Will Steynberg end up being extradited to the United States and, once the FBI has recovered Bitcoin belonging to US citizens, will it keep the rest?
To help us unravel this we are joined by attorney and crypto specialist Darren Hanekom. First of all, welcome Darren to our inaugural crypto podcast for 2022.
DARREN HANEKOM: Thank you, Ciaran. Thanks for having us.
CIARAN RYAN: Okay, let’s get into this. Johann Steynberg was arrested in Brazil on a warrant apparently issued by the FBI and executed by the Brazilian police. Can you walk us through the ramifications of this from a South African point of view? How does this come about, and where is South Africa featuring in this picture?
DARREN HANEKOM: Well, this is certainly an interesting start to the year, and it definitely means that the South African government also has some work to do to ensure that the investors who have allegedly been defrauded through the MTI company are made whole again.
So, from a South African perspective, one really needs to appreciate this is a sort of multifaceted, multi-jurisdictional matter that now involves quite a few role players.
The role players are the South African government, being the Department of International Relations and Cooperation who’d ordinarily work alongside the South African National Prosecuting Authority, who would then coordinate efforts through the diplomatic channels with the said state that the individual is in. Obviously the Brazilian authorities play a key role in this right now, more particularly the Brazilian government, as well as the Supreme Court, as it relates to extradition matters.
But, interestingly, there’s another role player, and that is the United States government. That also has a key role to play in this matter especially since, from what we’ve been told and from what we know, Johann Steynberg has been arrested under the auspices of a warrant of arrest originating from the United States and not South Africa.
What effectively needs to happen is a joint effort by all three countries in bringing Mr Steynberg to book.
CIARAN RYAN: Okay, there’s a saying in crypto, ‘not your keys, not your crypto’. In other words, you have to control the key to your crypto wallet or you can lose the lot. It’s rather like having your bank-account password. If you don’t have that, whoever’s in possession of that password can take all your money. In this case he who owns Steynberg may end up owning the Bitcoin under his control, and in this case it could be the United States. Am I correct?
DARREN HANEKOM: Yes. That’s a very well-known saying, at least in the crypto community: ‘Not your keys, not your coins.’
Right now at the onset that phase was largely on the back of some massive security breaches on other exchanges as far back as the exchange Mt Gox. I think that is where that term largely originated. It really goes along the lines of when you make use of a centralised exchange or an exchange with a custodial function, there are many benefits to that, because it also means that people who are new to the industry don’t have to worry about storing keys or mnemonic phrases, or losing their keys or having their keys compromised in some way or another. So it does fulfil a good function – at least from a centralised exchange point of view.
There are obviously decentralised exchanges which make use of various browser wallets and the like, but in cases similar to this one can see that, if the custodians are compromised, that really leaves the clients exposed. We don’t know how the Bitcoin was stored.
We don’t know where it was stored and whether it is currently even held in the form of Bitcoin.
But centralised exchanges do unfortunately have that sort of gap in the system where, if they are bad actors in control, that could result in a situation that many of the MTI investors currently find themselves.
CIARAN RYAN: It’s probably worth just summarising what Mirror Trading International actually was and is. It’s a company that is currently in final liquidation. Of course, it really came to public prominence in 2019/2020. It was offering investors returns of up to 10% month, but you had to send Bitcoin to addresses which were controlled by MTI, or by Johann Steynberg personally now it seems.
But if we can just pick up the process from here, Darren, we now know that he’s in custody in [Brazil]. It must have been a terrible new year for Johann Steynberg. He spent New Year’s Eve in a Brazilian prison, which I’m sure is no walk in the park. What is the process from here? How long will it take before Steynberg is extradited, and is he likely to end up in the US before he ends up in South Africa? How’s this likely to play out?
DARREN HANEKOM: Well, right now what needs to happen is, as I mentioned, the process of governments cooperating in executing the relevant legislation relating to extradition. So the first question then is: does South Africa have any mutual legal assistance treaties with Brazil?
As it stands, there is an agreement between South Africa and Brazil; however, that agreement is unsigned.
What we do know is that Brazil does have an agreement relating to mutual legal assistance with the United States. So ordinarily what happens is that the requesting state in the presence of a mutual legal assistance treaty would under two circumstances launch an extradition request.
If it’s urgent they could launch what’s called a provisional request for the arrest of the alleged fugitive. If that person is arrested there are timelines in play when there is an extradition agreement in place. The timelines really relate to the amount of time that the alleged fugitive can be held in custody.
So right now the formal request sets a timeline of 90 days – and that’s between the United States and Brazil – that he can be in Brazilian custody for a period of no longer than 90 days.
During that time a few things need to happen. One is a bail hearing together with an extradition hearing. The Brazilian Supreme Court would be the authority exercising its discretion as to whether this individual should be extradited to the requesting state. If the extradition process is successful, the alleged fugitive then needs to be returned or extradited to the requesting state within 60 days. Those are the prescribed timelines in play.
If a provisional request is actioned and a formal request does not follow it, that then means that the alleged fugitive needs to be released. But, from what we can discern from media releases is that he was arrested for planning and being in possession of falsified travel documents relating to passports. I think there’s also mention of credit cards. What we can also draw from that is that that could very well be an offence in Brazil as well, which in turn means that the Brazilian authorities could equally take a decision not to extradite him, and prosecute Mr Steynberg in Brazil.
There are a few factors that also relate to his time in Brazil – whether he could be released on bail, and be released into his own custody. Certain factors will most likely play against him. Especially if he was arrested for falsified travel documents he could very well be regarded as a flight risk, which makes the prospects of bail quite difficult.
CIARAN RYAN: There’s another case involving a South African who goes by the name of a Fluffy Pony, who was involved in the Monero privacy cryptocurrency.
Monero, for people who are not familiar with it, is a completely anonymous cryptocurrency. It has attracted a lot of negative interest from regulators and authorities around the world because of that. If you own Monero it’s very easy to hide the identity of the person who owns it.
Fluffy Pony was arrested in Tennessee. This was late last year or towards the late middle/end of last year, on a warrant relating to a claim that he had an unpaid bill in South Africa.
So far he’s successfully fought any attempt to extradite him back to South Africa, and you were involved in that case. Can you tell us a bit about that case?
DARREN HANEKOM: Yes. We have been mandated by Mr Spagni [Riccardo Spagni, aka Fluffy Pony], and what we can say is that the case is still ongoing, so unfortunately we aren’t at liberty to divulge much more than that at this particular stage.
CIARAN RYAN: But the point is there is a request for extradition to South Africa. So far he’s been released from custody in Tennessee into his own – I don’t know exactly what the term is – into his own custody. And he’s definitely not in South Africa, correct?
DARREN HANEKOM: Yes. There are many different role players in that particular matter, being the South African government with the United States government. So yes, there are quite a few moving parts in that. But we are confident that we will reach a speedy resolution.
CIARAN RYAN: Right. You are representing Fluffy Pony. Is that correct?
DARREN HANEKOM: That’s right.
CIARAN RYAN: Okay. Just going back to the Steynberg case, what is rather strange about this is that he was put on a watch list as a potential flight risk in late 2020. This was after the FSCA, the Financial Sector Conduct Authority, had investigated MTI and found it was making bogus claims that you could earn up to 10% a month, as I mentioned earlier.
Despite that, Johann Steynberg still managed to flee the country. What lessons can we learn about this?
What’s the point of being on a flight-risk [watch list] if you can just walk out of the country and your passport doesn’t get flagged at Jan Smuts/Oliver Tambo [OR Tambo International Airport] or wherever, whatever border post you exit through?
DARREN HANEKOM: There are, I suppose, moving parts to what authorities could or should have done. One also needs to look at what the global sort of standard is for situations similar to that.
We know that the Financial Action Task Force, also known as FATF, has taken a rather mediocre approach to South Africa’s ability to enforce its available legislative provisions in accordance with its current risk profile.
One also needs to appreciate that it’s always difficult to retrospectively look at what could have been done. But we also need to understand that I don’t suspect that Mr Steynberg was a fugitive or he appeared as a fugitive at the time. I can’t imagine that he would have been able to leave the country had there been an authorised issued warrant for his arrest.
So in the absence of a warrant of arrest he was not a fugitive and therefore not barred from leaving the country.
CIARAN RYAN: You and I spoke a few months ago about Steynberg possibly fleeing – well, not possibly fleeing the country, but after he actually did flee the country – with so much Bitcoin under his control. It’s reckoned that roughly R20 billion worth of Bitcoin passed through MTI over a period of time. Now, whatever is left is certainly a substantial amount of money. We were talking about Steynberg. He should be able to buy himself a lot of privacy, a lot of anonymity for that money, but I guess he got careless. How do you imagine he slipped up?
DARREN HANEKOM: Right now what we can speculate – and this is all speculative – and appreciate that he will now or at least in time know what has transpired since he left the country; where he was, what happened with the Bitcoins, where he spent them, what he was spending them on, who he was with, who he was working alongside, and what institutions facilitated his sort of disappearance into the ether, because it’s unlikely that he did this by himself, that this was a one-man effort.
This was potentially a coordinated and well-thought-out plan where somewhere along the line, as you said, he got careless.
We also don’t know the facts surrounding his sort of movements and what international authorities already know. What we can speculate is that usually in matters similar to this we see that foreign governments most likely knew exactly where he was and could have been watching him for some time.
But what we do know is that when he was arrested, the warrant of arrest was definitely prompted based on the falsified documents.
So somewhere along the line he was able to obtain these falsified documents and there must have been a means by which he paid for these things. He was certainly going somewhere to do something, and we don’t know what his lifestyle was like, where he was going and what waited for him there.
I’m sure those facts and that sort of narrative will certainly unfold in time.
CIARAN RYAN: There was a video on Brazilian TV over the weekend – I think it was reposted by Cheri Marks who was MTI’s marketing executive.
The video itself is talking about Johann having a private jet and luxury cars, and a new girlfriend in Brazil – with a claim that he had abandoned his wife and daughter in South Africa. Now this of course is per the reports which are coming out of Brazil. It seems to be where he slipped up. He had this girlfriend and he was maybe trying to impress her, and she didn’t want to live this anonymous lifestyle. He put her up in a hotel.
If true, what does this tell us about Steynberg and his quest to find a new life for himself? There are plenty of videos on YouTube on how to disappear. One of the first things they tell you is don’t contact the people that you used to know because all of those communications, all those communication channels are going to be monitored. So where do you think he made his big mistake?
DARREN HANEKOM: Well, what I think is it’s possible that there was a certain amount of confidence that he might have had being out of the country for such an extended period of time. There’s no doubt that he was following the news, as well as following the movements and developments in South Africa.
Perhaps he got bored, perhaps he wanted to see, and perhaps laying low wasn’t a life that he wanted to live for the next 25 or so years.
The thing about matters of this nature is, when people do disappear they have to watch their backs and have to live a life which is substantially different from their last, especially if it was a really public life. That’s quite an adjustment and perhaps along the way not something that he wanted to pursue. He got confident and he got caught.
CIARAN RYAN: And Cheri Marks is saying that he skipped the country, all part of a pre-planned exit for himself, and that he was going to leave the people who were his loyal lieutenants, if you want to put it that way.
He was going to leave them in the lurch and leave them to carry the can – which I think is true. They have had to answer a lot of questions, they’ve had to appear before the Section 417 inquiries. These are inquiries in terms of the Companies Act when a company is liquidated, to find out what happened to the money.
Do you think there are some people who would be nervous now that he might be coming back to South Africa? He’s got nothing to lose. He’s going to spill the beans. Do you think there’s going to be some people running for cover?
DARREN HANEKOM: Most likely. He was definitely portrayed as this rogue CEO, this person who concocted this devious plan to basically exit, scam and pull down his staff and clients.
But the road ahead we suspect is a long one, especially given the international nature of this matter, in that – rightfully – we believe South African MTI investors should be confident; however they should also be cautiously optimistic when it comes to having him back in the country.
Invariably what could result is if the South African government sits as a passive bystander, it could very well see Mr Steynberg extradited to the United States, and then prosecuted in the United States.
South Africa will need, as a country, to trigger the mutual legal-assistance treaty provisions that it has with the United States in order to trigger restitution for South African investors.
That is also what’s required going forward. Whether the South African government does something now, or whether it does something later, action is required at least in order to assist the good work that the current liquidators are doing in South Africa.
CIARAN RYAN: Right. If South Africa doesn’t do that, then there is a chance that the FBI will recover whatever Bitcoin they can from Johann Steynberg’s control.
DARREN HANEKOM: Of course.
CIARAN RYAN: Once they’ve done that, then they can seize the rest, right? This is what they have done in the past. They’re not really concerned about anybody outside the United States. In other words, if South Africans want to get to see any Bitcoin, there is that possibility, right?
DARREN HANEKOM: That is a possibility – especially if South Africa is not party to proceedings in the United States and if the South African government is not regarded as a victim in these proceedings.
CIARAN RYAN: This is obviously going to be an evolving story and there’s going to be a lot of ground to cover in the coming weeks and months on this, so we’re going to leave it there for the moment. Darren Hanekom, thank you very much for joining us.
Worthless projects will fail, leaving only the most viable standing. From Moneyweb.
The big crypto trends to watch in 2022 include more volatility, the failure of worthless projects, and the emergence of a core of spectacular winners.
The winners are likely to come from those offering more efficient business processes using the blockchain, such as Ethereum (ETH) and Solana (SOL); gaming cryptos such as Decentraland (MANA), Axie Infinity (AXS) and The Sandbox (SAND); and coins focused on what is known as Web 3.0 (or Web3), a largely untested concept that hopes to bring greater privacy and autonomy to the internet experience, along with the decentralisation and security of blockchain technology (removing that power from the likes of Google and Facebook).
Web 3.0 coins to watch are Helium (HNT), Flux (FLUX) and more familiar names such as Filecoin (FIL), Polkadot (DOT) and BitTorrent (BTT).
Helium aims to improve the communication capabilities of wireless Internet of Things (IoT) devices. “Its core appeal will be to device owners and those interested in the IoT space, with financial incentives providing further outreach possibilities,” says CoinMarketCap.
The FLUX cryptocurrency is up six-fold over the last three months as some of its Web 3.0 use cases start to ignite investor interest: among them, the intention to provide a decentralised alternative to the Amazon Web Services (AWS) platform.
Moneyweb asked four experts for their views on the trends to watch in 2022.
Farzam Ehsani, CEO of VALR: “The interaction between the traditional financial system and crypto will be magnified in 2022. We’ll see many more regulators, banks, hedge funds and institutions getting into crypto and we’ll also see price movements in crypto that have just as much, if not more, to do with the challenges in traditional finance than they do about the merits of crypto.”
Don’t expect crypto’s legendary volatility to disappear any time soon, adds Ehsani.
“We should expect to see continued volatility in price movements, but we may well see another record year for crypto from metrics as wide as adoption to crypto becoming legal tender in more nations, to all-time high prices.
“We’ll continue to see much more building in this space, from infrastructure players like VALR who help customers enter the world of crypto to artists embracing the world of NFTs [non-fungible tokens] to new blockchains and ideas [that] come to life in the blockchain space. We will likely see much more growth in decentralised social networks, not just decentralised finance. Banks, governments, central banks will become much more involved too.”
Richard de Sousa, CEO of crypto exchange AltCoinTrader: “I see crypto turning a corner in 2022, and a lot of worthless projects will fall by the wayside, while a core of viable and commercially sustainable projects will survive and thrive. Decentralised Finance [DeFi] is just getting started, so I see huge upside for yield-earning cryptocurrencies such as ETH, SOL, Bitcoin [BTC] and others. It’s still unclear which coins will dominate the DeFi space, but the frontrunners are ETH, SOL, DOT and Cardano [ADA]. But the list is growing by the week.
“Bitcoin will remain the gateway drug for new entrants to the crypto space,” says De Sousa.
“It is by far the largest crypto in terms of market cap because it is seen as digital gold, and all the latest stats show that people who buy it are less inclined to sell than at any time in the past.
“I am paying close attention to gaming coins such as Decentraland, and I was in fact buying land in the metaverse a few years ago when it was considered highly risky. These gaming coins have done exceptionally well over the last year and I expect this trend to continue, though I do have some reservations that they might be peaking too soon. Ultimately, I see Zoom and others offer[ing] their clients gateways to Decentraland, but we might need to see an improvement in metaverse headsets and smart glasses.
“Another project I am very keen on is Binance Smart Chain and the Binance Coin [BNB], which allows you to do pretty much anything you can do on decentralised blockchain networks but much faster and at much lower cost. This explains why BNB has performed so spectacularly over the last year, even though it is down quite a bit from its recent peak.”
Brett Hope Robertson, investment analyst at crypto platform Revix, sees several keys trends to watch.
1. Fantom hype – will it continue? Fantom (FTM) is a super-fast open-source smart contract platform for digital assets that recently announced a partnership with 123swap. It uses a novel blockchain technology for logging transactions, and its price is up more than 10-fold over the last year.
2. Web 3.0 – keep your eyes on Web 3.0 coins such as Helium (HNT), Flux (FLUX), Filecoin (FIL), Polkadot (DOT) and BitTorrent (BTT).
3. Gaming – these are incredibly volatile and a lot of fun. Coins that currently dominate this space are MANA, AXS, SAND, Gala (GALA) and Enjin Coin (ENJ).
4. Algorithmic stablecoins, such as Luna which is algorithmically pegged to the US dollar (rather than collateralised). Stablecoins are backed by assets such as the US dollar, and are hugely popular among crypto traders since they allow them to park profits in stable assets and so avoid the type of volatility normally associated with cryptos such as BTC and ETH.
Dean Joffe, co-founder of crypto investment company BitFund, says 2022 “is going to be pivotal for cryptocurrencies, and we see these trends making headlines”.
1. Regulation: “The crypto industry has thrived thanks to the ability for innovators to innovate, without regulations stifling innovation. As the crypto market has grown (both from a market capitalisation and user adoption perspective), regulators have started paying close attention, with the aim of regulating various crypto asset trading platforms.
“In December 2021, the Financial Sector Conduct Authority indicated that they planned to unveil a regulatory framework covering cryptocurrencies early in the new year to help protect vulnerable members of society from highly risky assets. Thus, we are undoubtedly going to see some form of regulations in 2022, but whether these regulations will be appropriate for the industry remain to be seen.”
Crypto ETF approvals: “As regulators release crypto regulations, many more crypto ETFs [exchange-traded funds] may list on various stock exchanges, thus providing a regulated way to trade crypto assets. While there has been hesitation from the majority of the regulators and exchanges – and incorrectly so – as regulations become more clear, we believe crypto ETFs will be approved across numerous exchanges globally,” says Joffe.
DeFi: “2021 was a seminal year for the DeFi ecosystem, as it grew to $220 billion in total value locked in the system from $20 billion at the beginning of 2020. While many believe that DeFi will eventually replace the old financial system with its antiquated and costly layers of intermediaries, it is still a fraction of the trillions of assets locked in the traditional financial ecosystem. 2022 may be an explosive year for DeFi, due to the substantial investment pouring into this space. As various DeFi protocols continue to address key issues, such as minimising transaction costs and providing fair and easy access to finance to all people within the ecosystem, the large total addressable market to be unlocked with a better user experience, regulation and institutional adoption may lead to [an] explosion in this space.”
NFTs: “NFTs have launched an entire new economy, with a digital asset that can be bought and sold at will. NFTs’ programmability allows many industries to use tokens to create efficiencies, while eliminating [intermediaries]. It will come as no surprise that corporates may get involved in NFTs, while crypto industry players continue to develop metaverse and gaming-related tokens,” says Joffe.
“2022 may see NFTs grow even further as a subsector within crypto, as we expect to see further growth and maturation of the market with new and unique use cases of NFT technology. It would come as no surprise that gaming NFTs may be the most explosive, as they intersect with, or become complemented by, other kinds of NFTs. We will probably see utility- and purpose-driven NFTs this year, leading to even further adoption.”
A proposed tax on aircraft flying to and from SA over Zim is getting serious support in response to Home Affairs’ decision not to renew residence permits for Zimbabweans. From Moneyweb.
Relations between South Africa and Zimbabwe appear to be deteriorating at an alarming rate following the decision by the Department of Home Affairs not to renew exemption permits for hundreds of thousands of Zimbabweans residing in South Africa.
The so-called Zimbabwe Exemption Permits (ZEP) expired on December 31, leaving an estimated 250 000 Zimbabweans at risk of losing their jobs, their bank accounts and of being deported.
This decision is being challenged in court by the ZEP Holders Association and NGO Amity Africa, which argue that holders of the now expired ZEPs are entitled to be awarded permanent residence status in SA.
Moneyweb is in possession of a proposal circulated to several Zanu-PF branches advocating the introduction of a ‘Dr Motsoaledi Aviation Bill’ which would impose a pollution levy on all air traffic travelling over Zimbabwe either arriving or departing from SA. Dr Aaron Motsoaledi, the minister of Home Affairs, is accused of publicly insulting senior members of the Zimbabwean government, including President Emmerson Mnangagwa and several of his ministers. The public position of the Zimbabwean government is that it respects SA’s decision not to renew the permits, though privately, many Zanu-PF members are fuming, warning of a coming cold war between the two countries.
The funds from the proposed pollution levy would be used to assist the return of ZEP holders to Zimbabwe, as well as compensate truck drivers and Zimbabwean victims of xenophobic violence in SA. A portion of the funds raised from the levy would be used to plant flora and fauna in areas negatively impacted by air traffic over-flying Zimbabwe.
The proposed aviation bill also envisages providing tax holidays and various other incentives for foreign aviation companies arriving and departing from Zimbabwe. This would alleviate any financial burden imposed on them by the pollution levy. All levies on aviation companies arriving and departing from Zimbabwe would be reduced.
A blessing in disguise?
“SA was our closest ally for decades, as we – among the frontline countries – bore the brunt of the cost of the liberation struggle,” says one Zanu-PF member. “SA’s hostility to Zimbabweans comes at a time when nationalism is resurging, but this is a two-way street. Zimbabwe is not without means to respond peacefully to these provocations from SA. Many of us see this as an opportunity to rebuild the Zimbabwean economy, offer tax incentives to companies based in SA that are fearful of their future there, and start attracting companies to relocate here.
“This may be a blessing in disguise, as we now have to fix the country and create business opportunities and jobs in a way that was never possible under (late President) Robert Mugabe.”
One of the first steps in this direction was the launch of the Victoria Falls Stock Exchange, and a Special Economic Zone (SEZ), also based in Victoria Falls, offering tax incentives to companies. Several other SEZs are now under consideration.
The proposed pollution levy is not a punitive measure, says the proposal, which has received strong support from many Zanu-PF members alarmed at the hostility from Home Affairs to Zimbabweans.
The SABC reported over the weekend that scores of undocumented Zimbabwean nationals who arrived in SA by jumping the border fence are being deported. Roadblocks have been set up south of Musina in Limpopo to catch undocumented immigrants.
Advocate Simba Chitando, who is representing the ZEP Holders Association in its court challenge to overturn the decision by Home Affairs not to renew the ZEPs, says there is growing anger in Zimbabwe at the deteriorating relationship with SA.
“The decision by Home Affairs not to renew the ZEPs is part of a pattern, and there is call for retaliation. It’s time for cooler heads to prevail.
“We have previously raised concerns about groups like ‘Put South Africa First’ which has promised reprisals against ZEP holders, and some of whose members have openly advocated violence against Zimbabweans. We have documented the deaths of more than 200 foreign truck drivers, many of them Zimbabwean, who have been killed in acts of xenophobic violence. The government has been silent and even hostile towards the victims of this violence, so we have now raised the matter with the International Criminal Court in The Hague.”
The Gauteng High Court decided not to consider an application last week seeking to overturn Motsoaledi’s decision not to renew the ZEPs, on technical grounds. The court found that lawyers for the minister of Home Affairs had not been properly served with court papers, and that the application was brought at a time when offices were closed.
Various interest groups connected to ZEP holders “are trying every trick in the book”, according to statement issued last week by Home Affairs.
“At the heart of the dispute is the decision taken by the Minister of Home Affairs not to renew the ZEP and impose a condition giving a 12-month grace period during which time ZEP holders need to regularise their stay through normal immigration laws of the country. The minister took the decision as he is empowered to do so in terms of the relevant provisions of the Immigration Act, 2002.
“The relief sought by these two groups was basically to be granted permanent residency and that the court should instruct the department to issue ZEP holders with visas, pending the review of the minister’s decision by the courts.
“The so-called urgent applications of these two groups were heard in court yesterday, 28 December 2021.
“We are determined to defend any spurious court actions aimed at undermining the lawful and reasonable decision which I took in my capacity as the minister of the department. We are doing this while we acknowledge the rights of individuals and groups to approach the courts to seek remedies if they feel aggrieved,” said Motsoaledi.
“It is common cause that there are many other groupings who are poised to take on review the decision on ZEP in the courts of law in the New Year. And as a result, the department will defend the lawful, rational and reasonable decision taken in my capacity as the minister of the department.”
In a message sent to ZEP holders by Home Affairs in recent days, the decision not to renew the permits is explained in part by the fact that “some of the Zimbabwean exemptions’ holders were violating the conditions in that about 1 900 were somehow able to apply for waivers in terms of the Immigration Act. Their applications were rejected. It goes without saying that a combination of factors led to the lawful, rational and reasonable decision of the minister.”
Though the Zimbabwe government has said it recognises SA’s sovereign right not to renew the ZEPs, many Zanu-PF members are calling for tough action in response, and have signalled their support for the proposed pollution levy on overflying aircraft bound for or departing from SA.