June 14, 2017 / 10:17 PM / 2 months ago

South Africa's Public Protector launches probe of influence-peddling in state-owned firms

JOHANNESBURG (Reuters) - South Africa's Public Protector has launched a new investigation into allegations of influence-peddling and unlawful enrichment by certain officials within three state-owned firms after thousands of emails relating to alleged fraud were leaked.

The Public Protector's office said in a statement on Wednesday it was investigating these allegations within Eskom, Transnet and The Passenger Rail Agency of South Africa (PRASA).

Allegations of government corruption have escalated this month after local media began reporting on more than 100,000 leaked emails they say show inappropriate interference by the wealthy Gupta family and ministers in the issuing of lucrative tenders.

"The Public Protector South Africa, Advocate Busisiwe Mkhwebane, has decided to conduct a preliminary investigation for the purpose of determining the merits of the several allegations published in the media," the protector's office said.

The latest allegations of influence-peddling are deepening a divide in the ANC as factions jostle for control before a conference in December where President Jacob Zuma's successor as party leader will be chosen.

The investigation by the anti-corruption watchdog will focus on allegations of "improper or dishonest act" with respect to the public funds at Eskom, PRASA and Transnet and "unlawful enrichment" by certain public officials at the firms, it said.

The investigation will also look at the re-appointment of Brian Molefe as chief executive of Eskom, the state power company, amid graft allegations. He was reinstated last month, but ministers then reversed his reinstatement.

Molefe has denied wrongdoing and the Gupta family, who are friends of Zuma, and its companies have also denied all allegations of influence-peddling or improper dealings.

Most of the allegations form part of "The State Capture" report by the Public Protector, released last year on Nov. 2, focusing on allegations that businessmen brothers Ajay, Atul and Rajesh Gupta had influenced the appointment of ministers.

The report has been taken on judicial review by Zuma, mines minister Mosebenzi Zwane and Minister of Cooperative Governance and Traditional Affairs Desmond van Rooyen, the public protector said.

Reporting by Nqobile Dludla; Editing by Chris Reese and Leslie Adler

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