At the centre of the early proceedings at the Commission of Inquiry into Allegations of State Capture on Wednesday was the Financial Intelligence Centre Amendment (Fica) bill and how its proposed amendments were allegedly delayed so the Gupta family could launder money.
Former public enterprises minister Malusi Gigaba, who is implicated in dodgy dealings with Gupta brothers Ajay, Atul and Rajesh, continued with his testimony at the commission once again on Wednesday, after appearing two days ago.
During proceedings, evidence leader advocate Anton Myburgh questioned Gigaba about his role as a member of both Cabinet and the Justice, Crime Prevention and Security (JSCP) cluster of ministers in the process of passing the Fica amendments.
Money laundering claims
The matter stemmed from former Treasury deputy director-general Ismail Momoniat’s affidavit which raised a number of issues about the Fica bill – including how former president Jacob Zuma’s Cabinet allegedly failed to question its constitutionality.
Myburgh said that in his affidavit Momoniat alleges that the JCSP cluster minsters made attempts to change, delay and stop the Fica bill, further stating this was in order for the Gupta brothers and their associates to launder money and open a bank.
“The conclusion is that the failure to pass this bill would have been convenient for the Guptas and their associates’ attempts to launder money and in fact to buy a bank if it had been delayed, so that’s the conclusion, so I’m going ask Mr Gigaba to comment on this,” Myburgh told commission chairperson Deputy Chief Justice Raymond Zondo.
This is after Zondo asked why Gigaba, who gazetted the commencement dates of the bill when he was the minister of finance from March 2017 to February 2018, was being questioned on the matter.
The commission also heard how JSCP cluster chairperson Nosiviwe Mapisa-Nqakula informed the Cabinet in a letter sent through Parliament that Section 45(B) 1C of the bill, which deals with warrantless searches and seizures, was unconstitutional.
However, Gigaba told the commission he had no recollection of the letter.
The former minister also argued the delays, saying “there was nothing peculiar” as the Cabinet had every right to scrutinise legislation before passing it.
“What Minister Mapisa-Nqakula is suggesting here or was suggesting as the chairperson of the cluster in this letter was not that the Fica legislation be scrapped alltogether. She was saying there are issues we are concerned about… some of which were considered unconstitutional.
“South Africa has a Constitution and that Constitution is sovereign and overrides any other letter of law that exists in this country. The Cabinet has to ensure compliance with the Constitution when they adopt any legislation.
“In the South African instance, in most instances legislation originates from the Cabinet and therefore the Cabinet would exercise its mind with regards to any legislation and even reserves the right to repeal any existing legislation. Now if Mr Momoniat says he is not aware of an instance where the Cabinet decided to repeal existing legislation… he is lying,” Gigaba said.
Gigaba pointed out that “what was necessary was the engagements on the issues being raised”.
“That is why in 2017 we facilitated discussions which then resolved concerns of those issues and then the [Fica] legislation was passed,” he said.
The former minister added that Parliament and the Cabinet was satisfied that the bill addressed the constitutional concerns.
He further dismissed Momoniat’s claim that he delayed passing amendments to the Fica bill to assist the Gupta brothers.
The Fica amendment bill was passed by Parliament in May 2016 and submitted for Zuma to sign on 13 June.
It was then signed into law in April 2017 following pressure from the Financial Action Task Force (FATF) – a France-based intergovernmental organisation that monitors compliance with anti money-laundering regulations and anti-terrorism.
The bill was intended to bolster the fight against global financial crime and improving the integrity of South Africa’s banking system.
It makes it harder for people involved in illegitimate activities or tax evasion to hide behind legal entities like shell companies and trusts.