Public protector Busisiwe Mkhwebane has red-carded the Free State department of agriculture for its handling of the Vrede integrated dairy project, concluding that the department failed to manage and monitor implementation of the terms of agreement with Estina.
In a press statement on Friday, a day after the report was released, Mkhwebane directed Free State premier Ace Magashule to initiate and institute disciplinary proceedings against all implicated officials who were involved in the project and submit a report on the action taken against them.
The investigation followed several complaints lodged by the DA's Free State leader, Roy Jankielsohn, in 2013.
Mkhwebane found that the department could not provide documents, policies or measures to demonstrate that proper financial control and risk management of the project had been in place. She also could find no evidence that the accounting officer invoked the provisions of the agreement in respect of the control over the project.
"This concern was supported by the report of the accountant-general...The lack of effective, efficient and transparent systems of financial and risk management as well as internal controls amounted to gross negligence and maladministration," she said.
Mkhwebane found that this evidence pointed to gross irregularities in ensuring the effective and efficient performance of the agreement and resulted in maladministration.
"This amounted to gross negligence and constituted improper conduct," she said.
AmaBhungane previously reported that a "loosely drafted" contract skewed in Estina's favour was drawn up by Ace Magashule's legal adviser, who allegedly has ties to the Gupta family.
It was revealed that the dairy project appeared to be conceived during a visit to India by senior department officials and the then-agriculture MEC, Mosebenzi Zwane. The trip was signed off by Magashule. Magashule's legislature approved the deal soon after the trip.
According to a report by City Press that quoted a preservation order granted to the National Prosecuting Authority's Asset Forfeiture Unit against Gupta-linked companies, of the R220.2-million the Free State government transferred to the Estina dairy project in Vrede, only 1 percent was spent on actual farming.
Most of the remaining money went to individuals and entities associated with the Guptas.