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#StateCaptureInquiry Former Head of Department of Agriculture and Rural Development in the Free State, Peter Thabethe, resumes his evidence @StateCaptureCom today. Advocate Leah Gcabashe SC begins asking about the memorandum on Thabethe's 2012 travel to India.
@StateCaptureCom #StateCaptureInquiry Gcabashe confirms Narayan on 28 February 2012 was not yet appointed to the advisory council of then Premier Ace Magashule. "That is correct," says Thabethe.
@StateCaptureCom #StateCaptureInquiry Gcabashe notes the the motivation sent out in Thabethe's letter to Magashule is that he liked the business model of Indian dairy company Paras because it collected milk from community members, and then processed it. Thabethe agrees.
@StateCaptureCom #StateCaptureInquiry Chairperson Deputy Chief Justice Raymond Zondo looks at a 2018 affidavit from Thabethe, which includes description of the goal regarding establishing a milk processing plant, among other things.
@StateCaptureCom #StateCaptureInquiry Gcabashe asks if Thabethe intended all three dairies would involved three elements cited in an affidavit, namely the production of milk, the establishment of a procurement centre, and the processing of dairy.
@StateCaptureCom #StateCaptureInquiry Gcabashe asks if on 24 February 2012, as at the time of the letter, Thabethe had three dairy projects in mind. She asks, if he had you intended to establish not just a procurement centre and processing centre but also to obtain milk for all three dairies.
@StateCaptureCom #StateCaptureInquiry "The plan was not to do the same thing at all three," says Thabethe. "The budget that existed was for three." Thabethe says, good, because she wants to establish if the R17-million was for three dairy plans.
@StateCaptureCom #StateCaptureInquiry Thabethe: My understanding was what we were discussing yesterday was the issue of spending the money before the feasibility study. My argument was to do the feasibility study you need the money.
@StateCaptureCom #StateCaptureInquiry Gcabashe says Thabethe signed the letter to Magashule on 24 February 2012. "That's correct," says Thabethe. She asks if at that stage Thabethe had been in contact with Paras. "Yes, Chair," replies Thabethe. Gcabashe asks when Thabethe first contacted Paras.
@StateCaptureCom #StateCaptureInquiry He says around December 2011 he started interacting with Paras. "Who suggested you contact Paras at that time?" asks Gcabashe. Thabethe says he did so of his own initiative, he contacted Paras by phone and he first spoke to someone in their New Delhi office.
@StateCaptureCom [PARAPHRASED AND SUMMARISED]
Gcabashe: You're a man of protocol. You didn't try to use the South African High Commission?
Thabethe: You use them when you know what you want to do.
Gcabashe: When you contacted Paras what did you want to do?
Thabethe: Clearly, I wanted to visit.
@StateCaptureCom #StateCaptureInquiry Thabethe says he was referred to Gajinder Kumar at Paras, who responded positively to Thabethe's enquiry and Kumar reported others came to visit Paras to observe the company's work.
@StateCaptureCom #StateCaptureInquiry Thabethe says he spoke to Kumar again in late January 2012 in order to tell Kumar "we wanted to come" to India. Gcabashe asks if in Thabethe's mind was he wanting to conduct a due diligence exercise and he confirms. "That is correct," he says.
@StateCaptureCom "How did you manage to arrange the trip in such short time?" asks Gcabashe on securing tickets to India departing 29 February, when Magashule approved the trip the day before, on 28 February 2012. Thabethe says you make preparations in advance, including reserving flight seats.
@StateCaptureCom Gcabashe says by 3 March 2012 at 10:50 he left New Delhi. She asks, "What were you able to achieve in the more or less 24 hours you were in New Delhi, Mr Thabethe?" He says he confirmed the company actually existed, he met with them, he visited the site and confirmed the product.
@StateCaptureCom #StateCaptureInquiry "We went there in the morning, we started in the office," says Thabethe of the visit to Paras. Gcabashe asks if Kumar took them on the tour of the facility. "That is correct [...] he had a team of people that we sat with in the office," says Thabethe.
@StateCaptureCom "Chair, our understanding was that the person we were dealing with was the Head of the Office, as in the CEO," says Thabethe. "So, you were able to get the attention of the CEO?" asks Gcabashe.
@StateCaptureCom #StateCaptureInquiry "So, he was of very big assistance even when we were in the meeting," says Thabethe of Ashok Narayan, who as of 1 March 2012 was an advisor to Magashule. "He then assisted in translating from the local language into English."
@StateCaptureCom #StateCaptureInquiry "We were in a fact finding mission so we went to expose ourselves to what they had," says Thabethe. Gcabashe asks if the documents were in English and Thabethe says so, she asks how long it took to go through the company structure and other relevant topics.
@StateCaptureCom #StateCaptureInquiry Gcabashe refers to Thabethe's 2018 affidavit. "You say that you brought back your presentation. I just want to understand what you mean by that," Gcabashe says to Thabethe. "It was a document that they gave you?" asks Zondo. "Yes," replies Thabethe.
@StateCaptureCom Gcabashe asks Thabethe if he did not do any further work on the matter before preparing a submission for the Executive Committee of the Free State. Thabethe says he could not do any further work at that stage because it did not have "blessing" and needed approval.
@StateCaptureCom #StateCaptureInquiry Gcabashe asks if Thabethe, as the accounting officer, had decided that Paras was the candidate for strategic partner without conducting further assessment following the trip to India.
@StateCaptureCom #StateCaptureInquiry "Did you not apply your mind afresh?" asks Gcabashe. "Chair, that would not assist me when I did not have the blessing," begins Thabethe. He says that was done after the proposal was approved by the Executive Council.
@StateCaptureCom #StateCaptureInquiry "Why was an ExCo approval necessary for this proposal?" asks Zondo, repeating Gcabashe's question. Thabethe says all projects get approval from ExCo. Gcabashe asks when Thabethe submitted the project proposal to ExCo.
@StateCaptureCom #StateCaptureInquiry "Soon after I returned from India I made a presentation," says Thabethe. He adds he later made another presentation to ExCo and indicated that he needed more money for the project.
@StateCaptureCom #StateCaptureInquiry Gcabashe asks if ExCo took a resolution of any kind when it approved his proposal. "I had, Chair, a number of these resolutions. There was a number of them, if I am not mistaken," he says.
@StateCaptureCom "This project had been discussed quite a number of times and a number of resolutions had been taken," says Thabethe. Zondo returns to Thabethe's visit to India to inspect Paras. Zondo recalls Thabethe's evidence on Paras collecting milk from small producers, it was a key feature.
@StateCaptureCom #StateCaptureInquiry Thabethe responds to a question from Zondo on what made Paras "special" when it came to collecting milk from small producers,. he says "what was very interesting was the support system" including helping farmers with services, such as those of a veterinarian.
@StateCaptureCom #StateCaptureInquiry Thabethe says that you need the hygiene systems to be very high, the support system demonstrated by Paras ensured high quality milk, and this impressed him. "Ja, but I still don't see why you need to go to India for that," says Zondo.
@StateCaptureCom [SUMMARISED] #StateCaptureInquiry Zondo: It seems to me that all you need really is people who know what advice needs to be given to assist small producers and it did not require travel to India.
@StateCaptureCom #StateCaptureInquiry Thabethe begins his reply saying what Zondo describes is exactly what they did. They began locally, and looked at small producers locally. "We come in and we say we want to assist them," says Thabethe.
@StateCaptureCom #StateCaptureInquiry Thabethe indicates that if you call for help locally and don't obtain, then it you have to look further afield. "And you say nobody was interested?" asks Zondo. "That is correct," says Thabethe. "Who are the entities that you approached?" asks Zondo.
@StateCaptureCom #StateCaptureInquiry Thabethe names a number of companies with which he says they interacted and consulted, including Parmalat, Dairybelle and Clover. He says the companies did not indicate an interest in helping small producers. "And what reasons did they give?" asks Zondo.
@StateCaptureCom #StateCaptureInquiry "Their main interest was to collect the milk, that's what we picked up, and the development part was a problem," says Thabethe of dairy companies he's listed as being approached to help small producers in the Free State.
@StateCaptureCom #StateCaptureInquiry "Your evidence is you tried, nobody showed interest?" asks Zondo. Thabethe says so, adding this is not only the case in the dairy industry. He says in other agricultural sectors transformation and development is very difficult.
@StateCaptureCom #StateCaptureInquiry Thabethe adds there are areas where you get white commercial farmers with the knowledge assisting neighbouring developing black farmers. "So, you get pockets like that," he says.
@StateCaptureCom #StateCaptureInquiry Proceedings resume after a tea adjournment. Gcabashe returns to the topic of how and why Thabethe approached Paras. "Can you just elaborate on what you were referring to here?" she asks of relations between South Africa and India that Thabethe cited.
@StateCaptureCom Gcabashe raises a 2011 memorandum of understanding between the governments of South Africa and India on agricultural development programmes. She asks why Thabethe speaks of an "bilateral agreement" between the countries. "It is important, Mr Thabethe, to clarify this," she says.
@StateCaptureCom #StateCaptureInquiry Are you aware that this document has no legal status in this country? Gcabashe asks Thabethe of the memorandum. He replies that this document offers protection, the establishment of the dairy does not rely on this document.
@StateCaptureCom #StateCaptureInquiry Gcabashe says, "A bilateral agreement [...] goes through various hoops." She speaks of "misrepresentation" in Thabethe's affidavit calling the memorandum of understanding a bilateral agreement. She takes issue with the department's reliance on the document.
@StateCaptureCom #StateCaptureInquiry "Our reference to this document was for protection," says Thabethe. However, Gcabashe refers to a provision on certain requirements being met between the two countries. She asks if Thabethe was aware of those requirements and that they had not been met.
@StateCaptureCom #StateCaptureInquiry Gcabashe says to Thabethe, "There is the protection which you are referring to now [...] you are misleading them with the information you are giving them, essentially." Thabethe says he attached the document with which people could either agree or disagree.
@StateCaptureCom Gcabashe expresses concern over the manner in which Thabethe used the 2010 document, a memorandum of understanding between South Africa and India, particularly because at the time Thabethe was working in the National Department of Agriculture, Forestry and Fisheries.
@StateCaptureCom #StateCaptureInquiry Thabethe replies, "Our reference to the document was to say, 'There is already an established relationship. The two countries are talking to each other.'"
@StateCaptureCom Gcabashe reads an email from the Department of Agriculture, Forestry and Fisheries stating the 2010 memorandum of understanding "never came to force" and says her difficulty lies in the fact that the Commission can elicit this plain explanation, yet Thabethe indicated otherwise.
@StateCaptureCom #StateCaptureInquiry Thabethe says the email indicates the "systems have been ongoing" and Zondo says he notes Thabethe's point that a group has been established.
@StateCaptureCom #StateCaptureInquiry Gcabashe says the manner in which Thabethe used the 2010 memorandum of understanding is the contentious point. Next, she moves on to the visit of Paras representative Kumar to South Africa.
@StateCaptureCom "Who suggested that Estina partner Paras?" asks Gcabashe. Thabethe says that Paras showed an interest in not only providing the model but investing in the project. He says it would be difficult for a foreign company to do so, and they had to register a company in South Africa.
@StateCaptureCom #StateCaptureInquiry Zondo asks Thabethe if when he travelled to India, Estina was not a prospective partner. Thabethe says not at that stage. "Is it something that only came up when they visited South Africa?" asks Zondo. "That is correct, Chair."
@StateCaptureCom #StateCaptureInquiry "We had discussion with them, we took them to the site," says Thabethe of the Paras visit. "So, when you were in India having discussions with Paras ofificials was your contemplation simply that you wanted to see how their model worked?" asks Zondo.
@StateCaptureCom Proceedings resume after lunch. Gcabashe reports that Thabethe's legal team, including attorney Hermann Fourie, raised an objection to her remark on the language in a document drafted by Thabethe was not in the most elegant English. She says she apologises unreservedly.
@StateCaptureCom #StateCaptureInquiry Gcabashe notes Thabethe's sons are in the hall @StateCaptureCom and she turns, hands together, to look at them and apologise. Zondo asks Thabethe if he has anything to say, and he replies that he accepts Gcabashe's apology.
@StateCaptureCom #StateCaptureInquiry Zondo remarks on the constructive manner in which Thabethe's legal team and the witness has also cooperated with the @StateCaptureCom. Gcabashe speaks of returning to robust questioning and getting back to business.
@StateCaptureCom #StateCaptureInquiry "Yes, Chair, given the current situation, I would concede we could have done a more thorough check," says Thabethe now, in belated reply to a question Zondo posed before lunch. He says he should've been more thorough in checking the profile of company Estina.
@StateCaptureCom Gcabashe says, for her, four issues arise on the issue of due diligence in relation to Estina. The first three are: the nature of Estina's business, the Sunninghill address of the sole director Kamal Vasram, and the change in Estina's sole director from Vasram to Soo Young Jeon.
@StateCaptureCom #StateCaptureInquiry Thabethe says that the agreement of 5 June 2012 was drafted by Estina. Gcabashe asks if it is not correct that government should draft an agreement. He says, not always, it depends on capacity and sometimes the non-government party will draft it.
@StateCaptureCom [BACKGROUND] #StateCaptureInquiry The following @TimesLIVE article by @CowansView includes mention of the change in sole director of Estina, and other relevant details on the #VredeDairyProject.
timeslive.co.za/news/2018-01-2…
@StateCaptureCom @TimesLIVE @CowansView #StateCaptureInquiry Gcabashe asks if Thabethe's understanding was that the memorandum of understanding between Paras and Estina was for a year, and that Estina would be the operating agent for Paras. He agrees.
@StateCaptureCom @TimesLIVE @CowansView [BACKGROUND] #StateCaptureInquiry In the following @SundayTimesZA article by @IamMzilikazi and @jikat, you will find further detail on Estina director Soo Young Jean (Zhu Yiyuan).
timeslive.co.za/sunday-times/n…
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry Gcabashe asks Thabethe when - as far as he knows - the Krynauwlust farm in Vrede was identified, and when intended beneficiaries were identified.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry To this day, says Gcabashe, the intended beneficiaries have no legal recourse. "Today, they do not have a legal document that makes them beneficiaries." She refers to an exhibit and says, to her, the only party it benefits is Estina.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry Thabethe says the intention was to register a company that would hold the interests of the beneficiaries, but they didn't get there.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry "We wanted to make sure that this company becomes the beneficiaries' company," says Thabethe speaking of Zayna Investment PTY Ltd Trading.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry Zayna Investment PTY Ltd Trading was intended to become the stipulated holder of the beneficiaries' interests, explains Thabethe. Gcabashe asks if he can name any Zayna Investment PTY Ltd Trading directors. "Chair, it was a shell company," he begins.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry Thabethe says this agreement with mention of Zayna Investment was sent to government legal advisors, and he was very happy with it, but he was advised legally that the agreement did not protect the State, hence the second agreement.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry "We could not see any major issue [...] I also asked this of the State law advisors [...] the only issue that they raised that it did not protect the State," said Thabethe. "Of course, that's a major issue," remarks Zondo.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat Thabethe says the contract was about initiating the process, get it going, get the company registered. "Was there no money that the department was going to put in before the vehicle was put in place?" asks Zondo. Thabethe says R30-million was to get the process up and running.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry Thabethe says that the legal advice he received derived from someone at Deputy Director General level and legal personnel in the Office of the Premier, who at the time was Magashule.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry Thabethe begins speaking about three sources of government funds for the Vrede Dairy Project. He describes the different sources and requirements for each.
@StateCaptureCom @TimesLIVE @CowansView @SundayTimesZA @IamMzilikazi @jikat #StateCaptureInquiry To monitor Thabethe's testimony this afternoon, see the live feed below. He is currently talking of transfers that stipulate the project on which the government funds can be spent.

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