African National Congress (ANC) treasurer general Zweli Mkhize on Tuesday sought to distance the ruling party from the charges by the US Securities and Exchange Commission (SEC) that have seen Japanese conglomerate Hitachi pay a $19-million settlement fee.
“The ANC categorically states that the organisation was not involved, implicated nor approached to answer on anything relating to the charges brought against Hitachi. The ANC was further not involved in the transaction between Hitachi and Chancellor House nor do we have any information on any impropriety relating to the award of the Medupi or Kusile contracts to Hitachi,” Mkhize said.
The US authority charged that Hitachi paid Chancellor House a “success fee” – a term often used as a euphemism for a bribe – of $1-million plus $5-million in connection with contracts to build the Medupi and Kusile power stations.
It said Hitachi had paid the settlement fee without admitting or denying the charges. Chancellor House was until last year the local empowerment partner of Hitachi’s subsidiary Hitachi Power Africa, which won contracts worth some R38-billion from Eskom.
The deals caused considerable political controversy but senior ANC figures long insisted it was above board. Last year the ruling party finally divested from Chancellor House but by that time millions in dividends had already been paid to the company.
The SEC in its statement described Chancellor House as “a politically connected front company” and said the deal with Hitachi held significant benefits for the ANC. It faulted Hitachi for lax internal controls, charging that it allowed it to pay millions of dollars to the ANC’s funding vehicle.
Mkhize dismissed the arrangment between Hitachi and Chancellor House as “internal”.
He said the party remained committed to clean governance and had therefore at its Mangaung conference in 2012 instructed its National Executive Committee to avoide any potential conflict of interest in the course of party fund raising.
“We will study the outcome of the SEC matter and from that process identify appropriate lessons or actions, if any, to be taken,” he said.