South African Finance Chief’s ‘Squeaky Clean’ Image Tarnished

(Bloomberg) -- Nhlanhla Nene took over as South Africa’s finance minister as a safe pair of hands to help restore confidence after years of scandal and alleged corruption under former President Jacob Zuma. On Wednesday, his reputation took a hit.

Nene, testifying before an anti-graft commission, revealed that he’d met repeatedly with members of the Gupta family, who are accused of being in a corrupt relationship with Zuma known as “state capture” -- including at their home in the Johannesburg suburb of Saxonwold. That marked a notable shift from previous statements to a local broadcaster that he only encountered the Guptas in passing at public gatherings.

“You begin to doubt his testimony because he’s changing his tune on something that is very material, bumping into people and now having been to their residence,” said Ralph Mathekga, a Johannesburg-based independent political analyst. “I don’t think it is enough to remove him, but I do think it is important to allow for an investigation.”

President Cyril Ramaphosa, Zuma’s successor, reappointed Nene as finance minister in February as part of drive to rid South Africa of corruption that’s brought changes at the top management of state-owned companies and attract $100 billion in investment to stoke an economy in recession.

Mr. Clean

“He was brought in as Mr. Squeaky Clean; I’m afraid that picture of Mr. Squeaky Clean is no longer intact,” Mathekga said.

Nene, 59, has come under pressure to resign from the opposition Economic Freedom Fighters party because it said he refused to answer its questions in May about his relationship with the family, who are Zuma’s friends and have been in business with his son, Duduzane.

He first served as finance minister until December 2015, when Zuma fired him, causing a plunge in the rand and bonds. Nene told the inquiry that he was dismissed because he wouldn’t sign off on a Zuma pet project: a multibillion dollar Russian nuclear power deal.

“I stood my ground because I knew it was correct not to append my signature,” he said.

But prior to Wednesday’s testimony to the commission, which is headed by Deputy Chief Justice Raymond Zondo, he refrained from detailing any substantial meetings with the Guptas.

In a 2016 interview with Johannesburg-based broadcaster eNCA, he said: “I bumped into them at public gatherings once or twice, but I’ve never had any engagement and I’ve never been asked by them to do anything for them.”

Gupta Meetings

That changed when he came before the inquiry.

Nene said he visited the Gupta’s home in the Johannesburg suburb of Saxonwold four times as deputy minister, and regarded the meetings as one of his tasks to “engage with different stakeholders in the economy.”

The encounters were short, initially to discuss the economy and then to talk about a contribution to a Gupta-owned magazine, he said in a statement to the commission. Duduzane Zuma was at the home “most times,” but they didn’t speak.

He also visited the Guptas’ offices in 2013, before the start of the family’s ANN7 television channel.

“I think his responses were enough to create doubt on the narrative that he may have also been corrupt,” said Ongama Mtimka, a political science lecturer at Nelson Mandela University in Port Elizabeth. “He has done well to try and actually say, look there’s room to actually investigate further and not take things at face value.”

The Guptas, who have left the country, and Zuma deny any wrongdoing.

Mcebisi Jonas, who was Nene’s deputy at the time, told the commission the Guptas offered him a bribe to take over the finance minister post, which he declined, and threatened to kill him if he spoke of the proposal. Jonas informed Nene about the encounter and issued a public statement about it five months later.

Read more on Jonas’s testimony to the anti-graft inquiry

Other witnesses at the commission have implicated the Guptas in plundering billions of rand from South Africa’s coffers with the tacit assent of the president and law-enforcement agencies.

“The whole saga is unfortunate because one question that he has not really answered is why he kept quiet when the revelations were coming out around state capture,” Mtimka said. “I felt that he failed to say ‘me too’.”

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