Joburg prisoners claim officials are violating court order to feed them properly

Written by Ciaran Ryan. Posted in Journalism

This article first appeared at GroundUp.

Inmates at Johannesburg “Sun City” Medium B prison say prison authorities are violating a court order issued by Acting Judge SM Wentzel in June 2018 that ordered the Department of Correctional Services (DCS) to serve three meals properly spaced throughout the day.

In January 2018 inmates complained to Acting Judge Wentzel in the South Gauteng High Court that they were going 20 hours between meals because of lack of staff. They were being served lunch and supper (consisting of bread and jam for the most part) at 1pm each day. This was expected to last until breakfast the following morning.

In a damning judgment Wentzel ordered DCS to ensure prisoners were served three meals a day, properly spaced throughout the day. She also stated that “it is high time” that inmates were served a hot meal of meat and vegetables in the evening “to sustain them”.

While the inmates are now receiving three evenly-spaced meals a day, they say that instead of a hot meal of meat and vegetables they are served bread and a sachet of juice powder.

Inmates say the refusal of prison authorities to honour Wentzel’s court order violates their human rights and the Correctional Services Act. The Act requires food to “be well prepared” and to be “served at intervals of not less than four and a half hours and not more than 14 hours between the evening meal and breakfast during each 24-hour period.”

The DCS has a completely different interpretation of Wentzel’s judgment. “The department was never ordered to serve a specific kind of meal for dinner. In terms of the court order, the department was ordered to serve three meals and also comply with the Correctional Services Act in terms of intervals between meals. The order has since been implemented effective from 6 September 2018. Inmates are served three meals which are spaced accordingly as per the court order,” says the DCS.

While Wentzel does make specific reference to a hot meal of meat and vegetables in her judgment, she did not include it within the order.

The Participative Management Committee (PMC), representing the inmates, last week attempted to bring an urgent application before the South Gauteng High Court to force prison authorities to honour Wentzel’s court order.

However, they say their efforts were sabotaged when the prison failed to arrange transport to the court. Judge President Dunstan Mlambo saw no urgency in the matter, which has now been set down on the normal roll.

Lucas Mokholo, head of the PMC, says inmates have been victimised for daring to take prison authorities to court. They have been subjected to indiscriminate cell raids that tried to humiliate them and “physically molest them in the cruellest way possible.”

The prisoners also claim to have been uprooted in the middle of the night and transferred to other prisons, without following due process or the requirements of the Correctional Services Act.

The PMC’s court application states that prison officials “proudly informed all and sundry that no judge will come and tell them how to run and/or execute laws” within the prison.

When PMC members attempted to bring the matter to court in November 2018, they arrived too late to argue their case. In papers filed before the court, they argue that one of the paroled PMC members managed to make it to court in time, only to hear that the other PMC members would not be in court as they had been transferred to other prisons. This was a lie, they argue.

Furthermore, the PMC’s court file had inexplicably disappeared from the court. Inmates say this was orchestrated by prison officials to frustrate its attempt to seek justice.

Responding to the claim that prisoners were prevented from travelling to court to have their matter heard, the DCS says according to its records, no requisition was made for the inmates to travel to court.

“In terms of departmental policies, whenever inmates intend to approach the courts on their own initiative, they are required to do so through their lawyers or family members. It is only when the courts request their appearance in court that the department has a duty to transport them. The department prides itself with its efforts towards ensuring that the rights of inmates are respected and upheld at all times. The allegation that the department is deliberately sabotaging the case and their rights is untrue.”

In response to questions from GroundUp, the DCS in Gauteng says it notes with great concern the allegations of harassment of inmates involved in litigation against the prison. “So far, we have no knowledge of any harassment in that regard because no complaint has been lodged regarding the allegation. However, we will look into the matter.

“General and surprise searches are part of the Correctional Services routine which is done to enhance security and to minimise criminal activities which may take place within correctional centres. It is done to ensure a safe and secure environment for officials, offenders and the public at large.”

Ironically, facilities company Bosasa (now called African Global) – which has been the subject of damning corruption allegations at the Zondo commission of inquiry into state capture – is the company responsible for providing meals at the prison. Mokholo says the PMC will apply to the Zondo Commission to provide testimony on behalf of prisoners relating to African Global.

Zimbabwe inflation hits 50% as Zanu-PF big-wigs milk crisis

Written by Ciaran Ryan. Posted in Uncategorized

This article first appeared in Moneyweb.

South Africans tuning into the Zondo Commission of Inquiry into State Capture may be horrified at the depth and extent of corruption alleged to have infested our government – but Zimbabwe is at a whole different level.

To take just one example: those with access to foreign currency allowances approved by the Reserve Bank of Zimbabwe, mostly those with top level Zanu-PF connections, were able purchase fuel at US$0.45 a litre in Zimbabwe and sell it in South Africa at US$1.20/l and in Zambia at US$1.10/l.

It doesn’t take long to become a dollar millionaire with that kind of arbitrage opportunity. It is the same story with maize meal, bread, flour, cooking oil and other basics. Connected Zimbabweans are making millions while ordinary people – or at least those with fixed salaried jobs – are paying 50-100% more for basic goods. They can barely feed their families.

This explains the recent rioting and violence in the country, says Bulawayo-based economist Eddie Cross. The country is a cesspool of infighting and intrigue, with President Emmerson Mnangagwa fighting rearguard action against his enemies who see an opportunity to unseat him.

“One of the problems we have here is open conflict between the ministry of finance and the Reserve Bank of Zimbabwe,” says Cross. “The Reserve Bank recently announced it is taking 50% of export proceeds from companies like Zimplats and offering them artificial exchange rates which are less than a third of their real value.

Export industries’ hands tied

“As a result, all export industries are effectively going bust. The biggest ferrochrome producer in the country, owned by Chinese investors, says it will have to suspend operations because a large part of its revenues are effectively confiscated by the Reserve Bank.”

Gold sales are down nearly 50% as a result of the Reserve Bank’s confiscation, so gold is now being marketed informally on the black market.

These dollars confiscated by the Reserve Bank are then allocated to the politically connected, who use them to arbitrage fuel, food and other commodities. Most Zimbabweans are forced to use so-called ‘real-time gross settlement’ (RTGS) dollars, which are worth less than a third of the value of US dollars.

Zimbabwe’s finance minister Mthuli Ncube is taking heat for the current economic crisis as inflation soars to 50%, raising fears of a return to the country’s hyper-inflationary past when consumer goods prices were doubling every few hours. That was a decade ago. The crisis was brought under control by introducing US dollars and South African rands as the accepted payment method. Almost instantly, inflation reduced to less than 3% a year.

Ncube’s economic reforms seemed sound enough. Public sector wages swallowed more than 90% of revenues, and the fiscal deficit was running at 40% of the budget. Something had to be done to fix this. In August last year he announced a roadmap of reforms, including lowering government expenditure and additional sources of revenues.

One of the new sources of revenue was a 2% tax of all money transfers. This is expected to generate US$2 billion on the roughly US$120 billion from electronic money transfers each year. Announcing these reforms in August 2018, Ncube also allocated hard currency accounts to all Zimbabweans, allowing them to receive payments in dollars, rands or other hard currencies.

It’s do or die time for one of SA’s oldest gold mines

Written by Ciaran Ryan. Posted in Uncategorized

This article first appeared in Moneyweb.

Every mining accident is a tragedy, but few compare to the horror of the collapse of a supporting pillar at Lily gold mine in Mpumalanga in 2016 which claimed the lives of three workers operating the lamp room in a shipping container on the surface.

The collapse of the pillar buried the container under 60 meters of rock and debris. The bodies of Solomon Nyirenda, Yvonne Mnisi and Pretty Nkambule remain buried there.

This tragedy brought an abrupt end to mining operations at Lily and its sister mine, Barbrook, one of the oldest gold mines in the country. The mines are owned by Vantage Goldfields, which has been in business rescue for three years. The nearby town of Louisville was devastated by the loss of nearly 1 000 jobs when the mines were shuttered.

Earlier this month a glimmer of hope returned to Louisville when Vantage Goldfields cleared a major hurdle in its path to recommence mining operations after Siyakhula Sonke Empowerment Corporation (SSC) and its subsidiary Flaming Silver were granted approval for the transfer of control of mining rights by the department of mineral resources (DMR).

Last week Flaming Silver announced that its offer to purchase Vantage Gold had become unconditional.

“This is a historical and transformational event in the history of the 52 year old Vantage Goldfields Group, whereby control of the company will for the first time change to black ownership,” said SSC in a statement.

But the deal is far from in the bag, according to business rescue practitioner Rob Devereux.

Straight-out street fight

There’s no doubt the Vantage business rescue has been a straight-out street fight. Nor is there doubt that the relationship between SSC head Fred Arendse and Devereux has been anything but smooth. This is not uncommon in business rescue, where creditors continually weigh the pros and cons of liquidating rather than saving the company.

Read: One of SA’s oldest gold mines fights for its life

The chief bone of contention in the Vantage case is how SSC will come up with the R50 million equity capital needed to trigger R190 million in loan funding from the Industrial Development Corporation (IDC) which would allow the rescue to proceed.

Arendse says Devereux failed to timeously disclose additional mineral assets capable of generating revenue of about R550 million over three years, and accused him of “capturing” Vantage, effectively delaying its return to operations for three years. “Creditors’ businesses would have been saved and a lot of people’s livelihoods would have been saved by them continuing to be employed on the mines,” said Arendse, adding that Vantage had been subjected to “attacks, sabotage and interferences.”

Devereux was recently joined by fellow business rescue practitioner, Daniel Terblanche, who appears more to Arendse’s liking.

Auction for Gupta mining assets hots up

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Moneyweb.

Project Halo is the preferred bidder but two late entrants have thrown their hats in the ring.

The auction for the Gupta mining assets, including Optimum and Koornfontein coal mines in Mpumalanga and a stake in the Richards Bay Coal Terminal, just got a whole lot more interesting.

Eight Gupta companies, including the mining assets, were placed in business rescue a year ago after commercial banks distanced themselves from the Guptas and cut off transactional banking facilities. The business rescue practitioners have been racing to wrap up the sale of the key mining assets so that the mines can return to full production and pay their workers – who stopped receiving salaries in October last year.

In December last year, a group called Project Halo was announced as the preferred bidder with an offer of R3.6 billion for the assets, which includes R600 million of post-commencement funding that will be used to return the rapidly deteriorating mines to operational efficiency.

The other two bidders are the state-owned Central Energy Fund (CEF), which manages SA’s oil and gas assets, and the Phakamisa consortium, headed up by mining stalwart, Bernard Swanepoel.

Business rescue practitioner Louis Klopper says the bids are competitive in terms of price, and differ primarily in their funding structure. “We are hopeful that by February this year the creditors will decide which deal is the most attractive and vote on it. We don’t want to delay the process, and so we have engaged frantically with the key stakeholders in securing meaningful feedback on bids so that the revised business plans can be published with haste. Our priority is to get the workers paid and back on the job.”

Optimum, in particular, has been the victim of looting and sabotage, with electricity cables and equipment stolen and destroyed. The underground Koornfontein mine is in better shape, and will likely be in production before Optimum.

Project Halo is 40% owned by four directors, Mbongiseni Duma, Paul Buckley, Julian Kidd and Nkanyiso Buthelezi. A further 20% is held by an A-rated financial institution, which provided initial funding, and 12% by an established mining house. The names of these shareholders have been withheld until the creditors have voted on the proposed acquisition. A further 8% of the shareholding has been allocated to each of the workers, a women’s consortium and the community.

Some criticism

There has been some criticism that creditors will be asked to consider a bid without being privy to the identity of all Project Halo shareholders. Questions are also likely to be asked about the source of the CEF funds, and whether National Treasury is guaranteeing or fronting funds for its bid.

Are you suffering from corruption fatigue yet?

Written by Ciaran Ryan. Posted in Uncategorized

This article first appeared in Accounting Weekly.

Suffering from corruption fatigue yet? You better get used to it, because it looks like the Zondo Commission of inquiry into state capture is just getting started.

This week the commission heard from Angelo Agrizzi (pictured), a former executive with Bosasa and, boy, did he name names.

Bosasa (now called African Global Group) paid R50,000 a month to Communications Minister Nomvula Mokonyane, as well as truck loads of whiskey and liquor. The good people at Bosasa also paid money for funerals for Mokonyane’s family members. Mokonyane, now environment minister, has called the bribery claims “preposterous”.

Agrizzi said no financial benefit was received by the company as a result of these bribes. When he raised this point with his boss Gavin Watson, he was told: “You are in Africa, do as in Africa.” The Watsons, for those too young to know, were treated as heroes in the apartheid years for refusing to play rugby in racially segregated teams. They clearly capitalised on their fame when the ANC got into power.

Who else is alleged to have received money?

R500,000 a month went to officials at the Department of Justice and Correctional Services. This increased to R750,000 a month when former SA Revenue Services (Sars) head Tom Moyane was head of correctional services. (Bosasa supplies food and other services to prisons).

Vincent Smith, ANC MP and co-chair of the constitutional review committee looking at the issue of land expropriation, was paid R100,000 a month.

The former CFO of the Department of Correctional Services, Patrick Gillingham, as also on the payroll.

Agrizzi testified that former President Jacob Zuma was paid R300,000; former SAA chair Dudu Myeni received a designer bag stuffed with money.

It was also claimed that former National Prosecuting Authority (NPA) bosses Nomgcobo Jiba and Lawrence Mrwebi were also apparently bribed.

Let’s bear in mind these are untested accusations at this point so the presumption of innocence must be respected. But what a list of names Agrizzi provided. This is starting to show how potentially rotten HMS South Africa has become.

Coal mining community shows the beautiful side of SA

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Groundup.

Shafted by the Guptas, the people of Blinkpan, Mpumalanga have transcended race and class barriers to help each other.

It was a dismal Christmas for thousands of coal miners in Mpumalanga when the formerly Gupta-owned coal mines of Optimum and Koornfontein, now under business rescue, stopped paying workers and contractors in October last year. It was the same story for workers at other nearby mines: Woestaleen, Boschmans, Klipbank, Setemba and Sandile.

In December a group of determined women, all of them employees of the nearby coal mines, decided to do something about it.

They set up a non-profit organisation called Feed the Miner and approached local businesses and farmers for donations. Six weeks later the organisation is providing food and grocery hampers to 650 families.

All of this is being run out of the Blinkpan home of Christo Mostert, a production foreman contractor at Koornfontein. Scores of miners and their families gather at his house twice a week to receive grocery hampers that should keep them going for a few days. Miners of every race join hands in prayer to give thanks for these modest blessings. They are surprisingly cheerful, given the miserable conditions they now find themselves in.

When the formerly Gupta-owned mines were placed under business rescue in February last year, staff never knew from one day to the next whether they would be paid. When the salaries stopped coming in October, so too did their pensions and medical aid. Many workers have had to borrow from family members to pay lights and water. There were no presents for the children at Christmas and no books or uniforms at the start of the 2019 school year.

There was jubilation in Blinkpan last week when a group called Project Halo was announced as the preferred buyer for the Optimum and Koornfontein mines, and the hope is that the R3.6 billion deal will be concluded within the next week or two.

“Project Halo was assessed as the best bid on the table, and of course we want to wrap things up as fast as possible so workers can get paid, but unfortunately there is a process that must be followed and certain legal steps must be taken first,” says Louis Klopper, business rescue practitioner for eight Gupta companies (including Optimum and Koornfontein) placed under administration when the major commercial banks distanced themselves from the Guptas.

In a statement issued this week, Project Halo said a priority is to “get the workers to keep their jobs, provide backpay and generally get their morale back again”.

Why do we keep on taking advice from the clueless?

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Moneyweb.

One of the great economic questions of our age is what caused the Great Depression and can we avoid a repeat?

Steve Keen, self-proclaimed ‘anti-economist’ professor of economics at Kingston University in London, has applied himself to the question for four decades and believes he has the answer. Debunking Economics (Zed Books, 2001; revised and updated 2011) is the product of that exploration. It is also a frontal assault on mainstream economics for lacking the rigour demanded of other scientific disciplines.

Whether a great depression can happen again – or indeed is already underway – is important because the last such period was accompanied by genocide and fascism. The stakes are high and the current prescription of bailing out failed banks, rather than over-indebted consumers, is merely prolonging the day of reckoning.

Keen is merciless in his attack on neoclassical economists. They are not up to the task of steering the world economy and their intellectual ministrations are not only misguided, they are fatal, he says. Our current economic system is held up by matchsticks that will likely lead to two outcomes: starvation or emigration. Either we reform the current economic system, including its money, or we risk ending up in a Hunger Games hell.

There is an element of apocalypse fatigue surrounding our economic trajectory with so many depressing books exploring aspects of the subject, but to turn away from the signals is criminally negligent. The markers of economic catastrophe are all around us: the debt-to-GDP levels hit 300% of GDP in 2008 when the world’s biggest banks ran to their respective governments looking for bailouts. That was 1.7 times the levels reached in the 1930s. The Great Depression was deepened by the massive deleveraging that took place in the 1930s, as people raced to pay down debt. The result was deflation, falling economic output and massive job losses. Followed by war.

Eskom is sinking the economy in the name of greening it

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Moneyweb.

Eskom’s renewable energy drive is a financial disaster for consumers and an economic disaster for the country, according to papers before the Pretoria High Court.

The Coal Transporters Forum is asking the court to have dozens of power purchase agreements (PPAs) signed with independent power producers (IPPs) set aside on the grounds that the National Energy Regulator of SA (Nersa) authorised them without proper public consultation.

Lack of public participation sank the proposed nuclear deal in 2017 when challenged in court by Earthlife and the South African Faith Communities Environment Institute. Coal transporters believe the Pretoria court should find in its favour on the same grounds.

The court papers provide a fascinating insight into the costs of alternative energy. Eskom is purchasing renewable energy for 214 cents per kilowatt hour (kWh) when coal can produce the same electricity for 32 cents.

Eskom is then on-selling this renewable energy to the consumer at 86 cents per kWh. This cost the economy R9 billion in 2016, a cost that will be repeated each year until 2021. It also reduces coal consumption by three million tons a year, rising to 10 million tons by 2021, the court documents state.

Massive risk

These IPP contracts expose Eskom to massive risk, says the Forum. Nersa’s 2.2% tariff increase for 2017/2018 effectively means Eskom is sinking deeper into liquidity problems, at the ultimate cost of consumers and taxpayers.

“This means government is providing guarantees to the IPPs to destroy jobs in the mining sector,” says the Forum, which tallies the economic cost of the renewable energy programme as follows: Eskom will be forced to shut down at least five coal-fired power stations, one million permanent jobs will be lost, and 17 towns in three provinces reliant on coal mining will become ghost towns. Many more thousands of workers involved in coal transportation will be retrenched.

In short, it threatens to sink swathes of the economy in the name of greening it.

How did we end up in this mess?

In its answering affidavit, Nersa concedes that it did not allow for a public participation process, but followed the then minister of energy’s decision to procure renewable energy. The type of energy to be produced by Eskom is the minister of energy’s decision, in consultation with the regulator. The then minister Tina Joemat-Pettersson pushed the renewable energy contracts even though Eskom had spare capacity of 23%, excluding imports, renewable energy and other power purchases, says the Forum.

Fight between energy minister and nuclear company board gets nasty

Written by Ciaran Ryan. Posted in Journalism

This article first appeared in Moneyweb.

The three suspended board members of the South African Nuclear Energy Company (Necsa) will get their day in the Pretoria High Court next week, but are having to fund it themselves – to the tune of R1.5 million. They are bringing an urgent case before the court to overturn the minister’s dismissal.

The trio believed their court costs would be paid by their employer as funds had been set aside for just such an eventuality. Instead, they are having to fund their court application with borrowed funds.

Energy minister Jeff Radebe suspended chairman Kelvin Kemm, CEO Phumzile Tshelane and audit and risk director Pamela Bosman in November last year on the grounds of “defiance and ineptitude”.

Read:

South Africa axes state nuclear firm Necsa’s board

Axed Necsa board blames resistance of ‘privatisation by stealth’ for dismissal

The removed board members say more sinister motives lie behind their dismissal; that the minister is party to plans to sell NTP Radioisotopes, a 100% Necsa subsidiary and one of the few profitable state-owned companies, to an American customer.

Radebe has specifically accused the suspended board members of unauthorised foreign travel, dissemination of false information to the media, unauthorised increases in remuneration, the months-long shutdown of the NTP medical isotope production facility, and the “unlawful” signing of a memorandum of understanding with Russian nuclear healthcare company Rusatom.