South Africa’s ruling ANC party yesterday denied US charges that it took improper payments from Hitachi in connection with the construction of multi-billion-dollar power plants.
The charges stem from a deal in the late 2000’s in which Tokyo-based construction company Hitachi sold a 25% stake in a South African subsidiary to an alleged front company of the African National Congress (ANC).
The ANC, which led South Africa’s fight against the apartheid regime, has ruled the country since Nelson Mandela won presidential elections in 1994 but the party has become increasingly enmeshed in corruption scandals.
Hitachi has agreed to pay $19mn to settle the case, but the ANC dismissed all allegations of improper payment involving Chancellor House, an ANC investment company.
The US Securities and Exchange Commission (SEC) said Monday that the deal “gave the front company and the ANC the ability to share in the profits from any power station contracts that Hitachi secured”.
Hitachi did not admit wrongdoing in agreeing to the settlement.
The SEC said the accord resolves civil charges that Tokyo-based Hitachi violated the US Foreign Corrupt Practices Act by booking about $6mn of improper payments it made as “consulting fees” and other legitimate payments.
“The ANC categorically states that the organisation was not involved, implicated nor approached to answer on anything relating to the charges brought against Hitachi,” Zweli Mkhize, treasurer general of the ANC, said in a statement.
“The ANC was further not involved in the transaction between Hitachi and Chancellor House.”
Mamatho Netsianda, chancellor house managing director, told AFP he was “surprised” by the charge levelled by the SEC.
“(Hitachi) are the ones who have been indicted, not us,” he added.
Facing mounting public pressure, in 2014 Hitachi bought back the 25% stake in its subsidiary from the ANC.
Delays and errors by contractors including Hitachi have held up the launch of power plants in South Africa, exacerbating dire electricity cuts.
Mass protests against government graft are planned in Pretoria and Cape Town today. Public anger over alleged corruption has focused on $24mn state-funded upgrades to president Jacob Zuma’s private residence.
South Africa’s main opposition party said yesterday it wants police to investigate the investment arm of the ruling party.
“The Hitachi settlement is clearly an admission of de facto corruption that implicates the ANC - a party that has infected government at every level with corruption,” the Democratic Alliance’s leader Mmusi Maimane said in a statement.
“The DA will therefore be laying criminal charges against chancellor house for this unlawful activity,” it added.
The Hitachi case is the latest corruption scandal to hit the ANC, which is still reeling from accusations it paid a $10mn bribe to win hosting rights for the 2010 World Cup. The DA called last week for a criminal investigation to be opened into the World Cup bribe allegations, which the ANC deny.
Julius Malema, a former ANC youth leader and now the combative head of the left-wing Economic Freedom Fighters, tore into the ANC’s record on corruption and pledged to end the ruling party’s dominance at next year’s vote.
“Corruption in the ANC is not punishable, in fact it’s rewarded. That’s how the ANC are running our country,” Malema said at an event held by the US Chamber of Commerce in Johannesburg.
South Africa’s murder rate jumped 4.6% in the last year, official data showed yesterday, with almost 49 people killed every day in a country battling a reputation as one of the crime capitals of the world.
A total of 17,805 murders were committed from April 2014 to March 2015, an increase of 782 deaths from the year before.
The government admitted that authorities were struggling to tackle the problem, but said the 10-year trend showed a decline in overall crime.
Opposition parties and analysts slammed the numbers and said there was a lack of clear strategy to bring crime under control.
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