Corruption charges mount against South Africa’s Gupta family

Various companies linked to the Gupta family — for long under global scrutiny over financial and political allegations — are now said to have received about 49 billion rand (approx. $3.5 billion) from various parastatal corporations in South Africa. A witness has claimed this at the Commission of Inquiry into State Capture, said a PTI report.

Parastatal organisations are those that are linked to the governments they operate in, and wield a certain degree of political power. These are common in Africa, and are often mired in controversies.

Ajay, Atul and Rajesh Gupta — brothers who are South Africans of Indian origin — have been accused of siphoning billions of rands from parastatal corporations using their alleged closeness to former South African president Jacob Zuma, said the PTI report. The Guptas have denied the charges.

The Guptas, who hail from Saharanpur in Uttar Pradesh and migrated to South Africa in the early 1990s, control various companies there.

The PTI report quoted Paul Edward Holden, a researcher with London’s Shadow World Investigations, as saying a study of hundreds of financial transactions and bank statements related to the Gupta were made. This revealed the sources of funds as well as the identity of companies used in money laundering — those that received irregular payments from parastatal organisations.

The money laundered via companies linked to the Guptas ultimately ended up in an account of Gateway Ltd, the family’s Dubai-based enterprise.

Formerly Tata-owned company

Notable among the firms that received money via allegedly irregular means is telecom operator Neotel, in which Tata Communications had held a majority stake earlier. The Tatas subsequently sold their stake to Liquid Telecom, in 2016. Neotel received about 5.6 billion rands from the rail network operator Transnet, said the report. The billing was for network services and CCTV installations by Neotel. Transnet is now a struggling enterprise, with vandals having destroyed several of its railway stations, said the PTI report.

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In a similar transaction, Transnet paid about 42 billion rand to Regiments Capital, it is alleged. Regiments is run by Salim Essa, a close associate of the Gupta brothers. The railway company also paid 1 billion rand to Trillian, in which, again, Essa is a shareholder.

State-owned power distributor Eskom paid about 7 billion rand to Gupta-linked organisations, said the report. Eskom is also a stressed company now.

The PTI report further said that from 2013 to 2016, Combined Private Investigations (CPI) made payments every month to a front company of Gupta Enterprise. This company grew from 500,000 rand and to over 1 billion rand. The front companies include Chivita, Homix,  Forsure and Medjoul.

Front companies

“The financial surveillance department of the South African Reserve Bank intervened in the matter after the discovery that CPI had made payments to Chivita, Homix and Forsure, which were incorrectly identified as payments made to (another company),” said Holden.

The Gupta brothers are now residing in Dubai, but have consistently denied any wrongdoing. The South African government has made several attempts to extradite them, but in vain.