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Gupta brothers face trouble in Dubai and South Africa

NewsGupta brothers face trouble in Dubai and South Africa

New Delhi: Total heat is mounting on the India-born Gupta brothers, charged with huge financial embezzlement during their stay in South Africa. According to reports reaching the Indian capital, two of the troika, Atul and Rajesh, are now at a detention centre in Dubai, shorn of all their glitz, glamour and wealth. No one knows why the third brother, Ajay, has not been detained by the UAE authorities. Rajesh is also known as Tony. Ajay is the eldest and patriarch of the family.It is reliably learnt that Ajay has reached out to some top contacts in India and started consulting some top lawyers in London and New Delhi to get his brothers out and prevent their extradition to South Africa.

“It is going to be a big legal battle,” said a top source in Dubai.

Among the people Ajay has reportedly tried to reach out to stop the extradition of his brothers is fugitive cricket czar Lalit Modi, widely regarded as a confidant of the Guptas.Sources claim that it was with the Guptas’ backing that Lalit Modi shifted the world’s richest cricket league to South Africa in 2009. It was at that tournament that two Indian businessmen were beaten up by the private security guards of the Guptasin an altercation during a match.

The brothers were nicknamed Zuptas, thanks to their huge clout with the then Jacob Zuma government. The current South African President Matamela Cyril Ramaphosa is on record saying that an estimated $37 billion has been embezzled by Zuma and his top associates, notably the Guptas.

In affidavits before the Zondo Commission, set up to probe financial scandals that happened under Zuma’s tenure, many testified on record that the Guptas amassed huge illegal wealth.Those close to them deny such charges. Those who testified gave what they saw as documentary evidence as to how the brothers plundered state resources and peddled influence over government policy.

It was only after the Zondo Commission’s report was made public and pressure mounted on the UAE government to nab the brothers—staying in two, heavily armed villas in Dubai—that the UAE government arrested the two brothers and took them to a detention centre. The arrest happened after the fourth report of the Zondo Commission was out, but the final report came after their arrest.

The Guptas have had a long association with South Africa. The brothers arrived in South Africa from India in the early 1990s as apartheid rule was drawing to a close. Some reports say the Guptas initially sold shoes from their car in South Africa, but soon set up a company called Sahara Computers. And then, slowly yet steadily, they built a business empire spanning newspapers, cable television, uranium and coal mines. They lived in an expensive villa in Johannesburg’s upmarket Saxonwold suburb, bought expensive cars—Lamborghini, Maserati, Bentley, Porsche, Lexus—and threw lavish parties.

Their public notoriety dates back to 2013, when they landed an aircraft at a high-security air-force base to ferry private guests to an opulent, four-day family wedding.

In February 2018, police raided their compound, while immigration officials descended on the offices of one of the TV stations they used to own. A top editor of the news channel of the Guptas escaped after he was tortured by the brothers. The family owned a TV station, ANN7. The editor, Rajesh Sundaram, also testified before the Zondo Commission.

The Guptas, Zuma and his son have denied any wrongdoing.

This is one side of the coin. Consider the case of Sello Tsolo, a project manager for the Setsoto Municipality in the Eastern Free State, who has been barred from returning home from Abu Dhabi for nine years—more than three of which were spent in prison—after being lured there in 2013 by international scamster Amit Lamba on the pretext of investing in a dairy project.

So, who is Lamba?

Top South African portal MoneyWeb says Lamba was alleged to be a fraudster who was imprisoned in India in 2016 (and since released) for allegedly duping multiple victims into his “shakedown operation”. The Indian authorities, it turns out, were also keen to get their hands on him, which they did in 2016.

MoneyWeb says Tsolo is prevented from returning to South Africa until he settles what he says is a fake acknowledgement of debt of about R2 million, that Lamba allegedly tricked him into signing. A transfer of shares document Tsolo thought he was signing, in Arabic, turned out to be an acknowledgement of debt, claimed the portal. That mistake landed him in a UAE prison for 37 months, though he is still barred from returning to SA until the debt is paid off, a virtual impossibility as he is also prevented from working in the UAE.

What is interesting is that Tsolo was project-managing the Setsoto Integrated Dairy (SID) project, which was conceived more than a decade ago as a way to provide an income to thousands of small-scale farmers in the Free State. And then, he and other backers of the project were shocked when their project, initially backed by the Free State Department of Agriculture, was deep-sixed by the department and later revived in a slightly modified version as the Estina Dairy Project, which siphoned R280 million in taxpayer funds to Gupta-controlled accounts, says the Zondo report.

“They didn’t even bother to change the figures, it was so obviously a cut and paste of our project,” Godfrey Marange, a German-Zimbabwean businessman and the originator of the SID project, told MoneyWeb.

He had spent more than a decade studying the SA dairy industry for ways to improve it and discovered that yields could be improved up to 30% in the winter months by stabling cows in so-called “cow hotels”, using German dairy technology.

“The key difference with our project is we had German partners; the Guptas wanted to bring in Indian partners. The Guptas copied our ‘integrated dairy project’ but there was nothing integrated about theirs. Their project was a washout, managed by people who knew nothing about dairy, as the Zondo report makes clear. Our project has 15 different business units, such as a bakery and training school, built around the dairy business.

“We have no doubt the Guptas copied our project and intercepted provincial money originally intended for the SID project,” says Marange.

This is just one of the numerous cases in which the Guptas were involved.

Guptas did everything to beat negative publicity. They hired Bell Pottinger, a top British PR firm, to shift the heat from the family and then South African President Jacob Zuma to the white minority in the country, which still wields considerable economic power.

Bell Pottinger—an investigation found—created fake Twitter pages that emphasised the power of white businesses and used the hashtag#whitemonopolycapital to inflame racial tensions. The PR firm, which was eventually expelled, said it was paid a monthly fee of £100,000 by Oakbay Investment, a company owned by the Gupta family.

South Africa’s ethics watchdog, the Public Protector, published the first damning report in October 2016, saying the state-owned electricity monopoly had awarded a huge coal order to a then-Gupta linked business at well above market prices. The report also alleged that former mining minister MosebenziZwane “travelled to Switzerland with the Guptas to help them seal a deal” to buy a struggling coal mine. Now, those very mines are being sold.

Investigations have shown that the Guptas employed members of the Zuma family to further their business interests. Bongi Ngema-Zuma, one of Zuma’s wives, worked for the Gupta-controlled JIC Mining Services as a communications officer. Duduzile, Zuma’s daughter, was a director at Sahara Computers. She began working for them six months after her father was elected president of the African National Congress. Duduzane, one of Zuma’s sons, was a director in a few Gupta-owned companies but stepped down in 2016 following public pressure.

The brothers, last seen at the congested Kumbh Mela in Haridwar in April 2021, purchased a Bombardier Global 6000 Canadian business jet with a $41 million loan from Export Development Canada, the government-owned export-import bank. The family paid back only $14 million and still owes the bank $27 million. A report in Canada’sGlobe & Mailsaid Export Development Canada admitted that its $41 million loan to the Gupta brothers for the Bombardier jet was a mistake.

In India, three state-owned banks are said to have had dealings with the Gupta brothers. Investigating agencies claim State Bank of India (SBI), Bank of India and Bank of Baroda (BoB) handled transactions that were placed by the brothers. BoB, which shut its South African operations in 2014, took a hit of Rs 120 crore, it was revealed during hearings in Cape Town. Officials deposed before the judge that the Guptas routinely laundered cash through shell companies.

Bank of India (BoI) told the Reserve Bank of India it had advanced Rs 23 crore to Confident Concepts and Islandsite Investments, two Gupta companies that have now filed for insolvency.

The Guptas were reported in early 2021 to be backing UAE-based Murari Lal Jalan, who bid for Jet Airways, though he had no previous connection with the aviation business. Jalan eventually emerged as part of a two-member consortium chosen to revive Jet Airways by its creditors.

In 2019, German software maker SAP found compliance breaches and “indications of misconduct” in $50 million worth of public sector deals in South Africa involving the Guptas.

The brothers also tried to get into the education sector by building a university in Uzbekistan’s capital, Tashkent.

In 2018, income tax officials conducted raids in Saharanpur—the sleepy town that was once home to the Guptas—Dehradun, New Delhi and Gurgaon, where the family has offices and real estate property. After the raids, the brothers stopped construction of a temple in Saharanpurfollowing allegations that it was being built with illegal money brought in by the family. A two-part investigation by News24, a South African news publication, highlighted how the Guptas had created numerous shell companies to launder cash.

The charge is that in association with the Gupta Brothers, Zuma effected “state capture”—siphoning off of state assets. The Guptas were once so influential that it was alleged that they decided the policies of the Jacob Zuma government. In 2017, about 1 lakh emails were leaked establishing how deeply the Guptas influenced the Jacob Zuma government.

In 2016, South Africa saw a major political controversy over allegations that the Gupta Brothers had promised the then deputy finance minister an elevation to the post offinance minister if he advanced their business interests. The Guptas allegedly also promised to pay 600 million rands. Around the same time, former Finance Minister Pravin Gordhan alleged that he held the Guptas were responsible for having been fired from the Jacob Zuma government.

All eyes are on Dubai. Ajay Gupta is hyper active to get his brothers out of the detention centre and stop their extradition to South Africa. Their supporters say it is all a witch hunt by rivals, including of Zuma. The public awaits the true facts of the case.


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