Today's Big Stories

Hitachi scandal: Focus on transparency about political party funding

The Securities and Exchange Commission (SEC) has charged Tokyo-based conglomerate Hitachi, Ltd with violating the Foreign Corrupt Practices Act (FCPA).

Hitachi has been found guilty of inaccurately recording improper payments to the African National Congress (ANC) in connection with contracts to build two multi-billion dollar power plants, Medupi and Kusile.

Hitachi has agreed to pay $19 million to settle the SEC charges.

Calls for transparency with political party funding

702/Cape Talk's Stephen Grootes this afternoon explored matter of political party funding with former politician Valli Moosa (who was chairperson of Eskom at the time when the Hitachi contract first surfaced) and Corruption Watch's David Lewis.

Moosa said if these findings were indeed true, it would be disappointing. He added that these allegations raised questions of funding of political parties and transparency thereof.

This matter is an unfinished part of our constitution making. It is the only weakness of our otherwise great constitution.

Valli Moosa, Former politician

Listen to the conversation below:

What this allegation means

702's John Robbie spoke to Mail & Guardian journalist, Sam Sole about this report.

Listen to the conversation below:

Corruption dates back to 2006

Speaking to Cape Talk's Kieno Kammies, Hennie van Vuuren - a research associate at the Institute for Justice and Reconciliation (IJR) - said the ANC's association with corrupt activities to secure mineral tenders in South Africa dates back to 2006.

In ordinary language, we call this corruption. We've allowed all South African politicians to normalise corruption.

Hennie van Vuuren, Research Associate at the IJR

Listen to the full conversation from CapeTalk's Breakfast with Kieno Kammies:

Chancellor House a front

The SEC alleges that Hitachi sold a 25% stake in a South African subsidiary to a company serving as a front for the African National Congress (ANC).

According to van Vuuren, this arrangement gave the front company (Chancellor House) and the ANC the ability to share in the profits from any power station contracts and mineral tenders.

The Tokyo-based conglomerate was ultimately awarded two contracts to build power stations Medupi and Kusile.

It allegedly paid the ANC’s front company $5 million in “dividends” based on profits derived from the contracts.

It is also claimed that, through a separate undisclosed arrangement, Hitachi paid the front company another $1 million in “success fees” and inaccurately booked them as consulting fees without the proper records.

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