The Democratic Party of SA has released the letter below to Communications Minister Ivy Matsepe-Casaburri to express the DP's concern about the third cell licence and to seek assurance from the Minister about the scope and depth of the reported NIA investigation.

15 March 2000

The Honourable Minister of Communications
Dr Ivy Matsepe-Casaburri
CAPE TOWN
FAX NO: 462 1646

Dear Minister

Re: THIRD CELL LICENCE

I write to you on behalf of the Democratic Party to express our extreme
concern about the third cellular licence.  As you are the person who
will decide the successful bidder in the last instance, we feel we
should put our perspective on the process so far before you, as observed
from the Parliamentary point of vantage.
>
The DP withdrew from the Portfolio Committee's series of closed meetings
after the 1 October meeting in Pretoria because:

1. At that meeting, the Chairperson of Satra alleged that one or more
councillors had tried to scuttle the normal tender rules to favour Zader
Financial Services.  Zader Investment Corporation is of course part of
the Cell C bid.  An independent investigation was therefore
self-evidently necessary.

2. In our view the Committee had opened itself up to manipulation.  In
the absence of the Chairperson of Satra, an account was given at the
first closed meeting in Cape Town of the ST0017 tender process, and
correspondence between "Concerned Councillors" and your predecessor was
furnished by the Department, which specifically omitted the
Chairperson's rebuttal in writing or clear reference to Satra decisions
accepting the tender process.

It may be said that the first closed meeting was used as a forum to
undermine the Chairperson.  At the second, of course, he refused to
participate because he alleged that he had effectively been excluded
from the first meeting and therefore lacked confidence in the Chair;
instead he made his allegation of bias against other Councillors and
said that he would participate only in a proper investigation.

Now, in March, the Chairperson has been removed from the decision on the
licence, and the consortium which includes Zader has been declared the
favoured bidder.  I am told that you instructed the Chairperson to
recuse himself on the basis of the affidavit to the Auditor-General in
which he declared that a former partner in a dormant company has an
association with a Trust involved in a bid.  Whatever your
considerations in instructing the recusal - and the connections of
Councillor Funde with Eskom's Electricity Council look more like a
Section 15 case for recusal to me than Councillor Maepa's situation -
one cannot fail to be struck by the fact that the Chairperson has in the
end been excluded and Zader has been ultimately successful.

Add to this the fact that the Auditor-General did not test the
Chairperson's allegation that one or more Councillors demonstrated a
bias in favour of Zader, and we are left with the sense that a basic
problem is left unresolved.

After the Chairperson's public allegations of bias and our withdrawal
from the Committee, the DP sent documentation illustrating the direct
links between Zader Financial Services and Zader Investment as well as
the links, incidentally, between the Department (previous employees) and
Zader to the Public Protector along with other papers received.  In the
event the Auditor-General's special enquiry was the only one undertaken,
and our documents were furnished to that office, which we never
considered the appropriate one for investigation.  In view of the terms
of reference agreed upon between yourself and the Auditor-General, the
allegations of bias towards Zader could only have emerged through
affidavit, and scrutiny of such direct ownership and control interests
as were available.  The Auditor-General's report has of course been
unable to draw conclusions.

We are presented every week by the Press with information on
shareholders which increases the sense that all is not well.  I refer to
Sam Sole's reports for Independent newspapers to the effect that "the
same individuals and companies that benefited from South Africa's
controversial R21 billion arms purchase" stand to benefit here;  his
subsequent report that Mr Allan Gray of Mpumalanga fame is involved and
Ivor Powell's report in Mail and Guardian on the Cell C shareholders
agreement.  A cumulative picture is emerging, whether correct or not, of
benefit to a well-connected group of persons rather than empowerment
groupings, let alone South Africa or the consumer.

We read in the press that you have engaged the NIA to investigate
shareholding.  We seek confirmation of this investigation, and such
detail of terms of reference or their equivalent as you can divulge.

We must express our concern and therefore intend to make this letter
public.

Yours sincerely
DENE SMUTS MP
Democratic Party Spokesperson : Communications

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