Minister of Social Development Bathabile Dlamini has stressed the importance of "radical economic transformation" despite the company she insists on using to disburse grants being white-owned and US-based.
Cash Paymaster Services (CPS) is owned by Net1 UEPS, a United States-listed parent company. Its chairperson and chief executive office is Serge Belamant who owns 2.3 percent of Net1. The rest of the board consists of Herman G. Kotzé, Christopher S. Seabrooke, Alasdair J. K. Pein and Paul Edwards, according to the company website.
The issue was raised during Dlamini's appearance before Parliament's standing committee on public accounts (Scopa) on Tuesday.
It was a charged meeting, as Dlamini missed a previous meeting with the committee and has consistently failed to account to Parliament and the Constitutional Court which declared the CPS contract invalid.
Dlamini's department is in crisis. The delivery of roughly 17 million grants to the most vulnerable South Africans is imperilled thanks to the near-farcical bungling of a distribution contract.
Following a long-winded account of how the department found itself in the present crisis, Dlamini asked to be excused from the committee before members could put questions to her, causing an uproar particularly from opposition members of Parliament (MPs).
Economic Freedom Fighter MP Mbuyiseni Ndlozi said: "This is not a church, you must sit here and account."
Scopa chair Themba Godi, who kept a tight and calm rein on events, managed to get the minister to remain and answer questions.
Inkatha Freedom Party MP Mkhuleko Hlengwa voiced a question troubling many of those following the saga. "The minister refers to radical economic transformation. CPS is white-owned. How does that fit in? Are they BEE-compliant?"
Ndlozi was more emphatic, noting that President Jacob Zuma, who has been speaking more frequently about radical economic transformation, had promised that government would use more black-owned companies.
"The president spoke about radical economic transformation, this contract, is it not perpetuating white domination, it is not helping transformation?" asked Ndlozi.
Dlamini's answer focused on the urgency. "We are negotiating for new terms, which will favour us ... but because of pressure, we did not look at issues of economic transformation, but because we are in the middle of negotiations, we can look at that now."
Dlamini failed to mention however CPS's terrible track record when it came to black economic empowerment (BEE).
In December investigative unit amaBhungane reported that Belamant used a thinly veiled black front to win the R10 billion South African Social Security Agency (Sassa) contracts. The report said:
Then he quietly dumped these black partners and used irregularly derived Sassa funds to sign on and pay off a businessman who regularly consorts with a close friend of social development minister Bathabile Dlamini – she oversees Sassa.
The lucky man, Brian Mosehla, pocketed a quick R83 million cash in the process.
The evidence suggests top Sassa officials turned a blind eye to Belamant's fronting – and together they misled South African courts.
The history makes a mockery of the minister's stated commitment to "radical economic transformation", a new catchphrase for Zuma himself and his allies — and one that borrows heavily from the opposition EFF.
The campaign dovetails with a comprehensive, well-planned paid Twitter and fake news campaign also taking aim at "white monopoly capital" and particularly aimed at attacking the South African banks who have made it difficult for the notorious Gupta family, linked to the president, from doing business in South Africa.
Dlamini has refused alternative suggestions to disburse the grants, as suggested by Finance Minister Pravin Gordhan, intimating they did not fit in with the state's transformation agenda. She was scathing about the option of using banks to disburse the grants, intimating they did not have the interests of the poor at heart. The other option of the Post Office was likewise disregards with Dlamini noting they operated in "former apartheid towns", during Tuesday's appearance to Scopa.
Gordhan has been pitted against the Guptas, resorting to court action over the matter. The minister approached the High Court in Pretoria last year to make an order which confirms Treasury's position that it may not intervene in matters between banks and its clients. South Africa's commercial banks severed ties with the Guptas' Oakbay because of a series of questionable financial transactions.
Ministers allied to Zuma like Nomvula Mokonyane have led the charge against Gordhan, calling for Treasury's wings to be clipped. Dlamini has also butted heads with Gordhan over the grants issue though she has insisted there is no enmity between her and Gordhan.
The Constitutional Court has previously declared the contract was invalid, though it allowed it to continue until the end of this month so that the payment of social grants would not be affected.