Investigators across the world are trying hard to trace members of the of India-born Gupta family, once extremely powerful in South Africa and now fugitive from justice.
But the chase is proving difficult, as the brothers—Ajay, Atul and Rajesh “Tony” Gupta—are using a private plane to travel across the continents. In normal cases, aircrafts are traced through various sites like FlightAware that can help one locate the aircraft. But the fugitive brothers have reportedly changed the settings of the aircraft to private—meaning no one can track the Bombardier Global 6000 Canadian business jet they purchased with a $41-million loan from Export Development Canada, the government-owned export-import bank. The family, which has paid EDC only $14 million, still owes the bank $27million.
Indian investigators, and their counterparts in South Africa and Canada fear the brothers are using the aircraft to avoid arrest. The plane has been spotted in recent weeks in India, Russia, and Dubai. However, investigators say the bank is likely to get the plane back eventually thanks to an international treaty known as the Cape Town Treaty, which gives lenders the right to seize aircraft in any country that has signed the treaty.
But, this is just one of the problems of the brothers.
In India, as many as three state-owned Indian banks could be probed for their dubious dealings with the Gupta brothers, whose late night parties across the world were state-of-art events.
India's largest lender Mumbai-based State Bank of India (SBI), Bank of India (BoI) and the Ahmedabad-based Bank of Baroda (BoB), the country’s third-largest, are under heat from investigative agencies for handling a significant portion of the cash that the agencies claim the brothers laundered to undisclosed destinations.
The BoB, which shut down its South African operations in 2014, has taken a hit of Rs 120 crore, while it is immediately not known how much cash the Guptas reportedly laundered through Gateway Limited, a Dubai-based shell company. BoI has told the Reserve Bank of India that it loaned Rs 23 crore to Confident Concepts and Islandsite Investments, two Gupta companies that have now filed for insolvency. BoI CEO Dinabandhu Mohapatra said the bank has 100 per cent collateral against the loans, but investigators in Delhi say recovery of dues will take time because the loans will have to be classified as non-performing asset (NPA) and set aside funds as provisions. A mail to Rajnish Kumar, SBI chairman, remained unanswered.
“This is just the tip of the iceberg,” claimed a senior government official in Delhi.
The brothers, claim their employees in India, are currently holed up in Dubai, the new destination for a number of economic offenders from India.
Across the country, raids are being conducted at the residences and offices of the Guptas by the Income Tax and Enforcement Directorate. In faraway Johannesburg, Pretoria, Cape Town and Durban, the Guptas are being probed for allegations of influence-peddling and dubious deals. The brothers have been accused by the South African opposition and anti-corruption campaigners for allegedly exploiting their close alliance with former President Jacob Zuma, to unduly influence government affairs and win big state contracts for their family businesses. Zuma's successor and South Africa's new President Cyril Ramaphosa has promised a crackdown on corruption in the country, naming the brothers among the biggest offenders. South Africa's main commercial banks have cut all ties with the Guptas, citing risk to their reputation.
The Gupta family and Zuma have denied the allegations.
Harish Kumar, a senior tax official in Lucknow, said in a telephonic interview that the raids would continue for another week. The raids were conducted based on an official request sent by the South Africa government, to try to retrieve some of the cash the Guptas allegedly took out of South Africa. “We will share our findings next week,” said Kumar. He said the raids took place in Saharanpur—a sleepy town that was once the home to the Guptas, Dehradun, New Delhi and Gurgaon. The family has real estate properties and offices in these cities.
Interestingly, one of the brothers, Ajay, was in Dehradun when Zuma resigned on February 14. A week later, he, along with a few family members, flew to an undisclosed location in a private aircraft, claim government sources in Delhi. It was not immediately known why the family members were provided security by Uttarakhand’s ruling Bharatiya Janata Party government.
Kumar said the I-T officials have stopped construction of a multi-crore temple of Lord Shiva in Saharanpur. The temple, which was being funded by the brothers, is the mainstay of the investigations because Indian tax authorities are eager to block the passage of “illicit money” earned by the brothers outside into India.
The brothers, who were once very powerful in South Africa, often flew lawmakers from all political parties to their home in South Africa for parties and wildlife safaris. All guests would be mandatorily told by the Guptas to pray at a temple of Lord Shiva inside their sprawling mansion in their Johannesburg home and then enter the living room.
Public anger erupted in 2013 when, during a family wedding, Guptas ferried 217 foreign guests to South Africa and the flight landed at Waterkloof Air Force base, outside Pretoria. The airport is a military facility normally used for receiving heads of state. It appeared that Zuma, who was the guest of honour, had tacitly approved the decision, which breached air force, customs and immigration rules. There were allegations that the law was broken when guests were given a police “blue light” escort.
Investigators have also found the brothers' links with former cricket tycoon and IPL creator Lalit Modi. It was at their backing that Modi shifted the world’s richest cricket tournament to South Africa in 2009. It was at that tournament, two Indian businessmen, Ness Wadia and Mohit Burman, were beaten up by private security guards of the Guptas over an altercation during a match. The Guptas, who alleged the Indian businessmen had misbehaved with one of their family members, almost pushed the two behind bars before the matter was resolved by Modi and Indian diplomats.
Encouraged by Modi, the brothers even acquired some cricket stadiums under their brand Sahara, which also sold cheap laptops at less than $200 a decade ago. The Sahara brand, named after their hometown of Saharanpur, collapsed after the Lucknow-based Sahara conglomerate developed cold feet over its business tie-ups with the Guptas.
But now, the law is slowly catching up with the brothers with large number of their scandals unfolding across South Africa.
This week, German software maker SAP found compliance breaches and “indications of misconduct” in $50 million worth public sector deals in South Africa involving the Guptas.
SAP admitted it paid more than $9 million to intermediary companies controlled by the Guptas. However, the company said there was no evidence of direct payments to South African government officials. SAP said it had tightened up its compliance and anti-corruption procedures, including banning sales commissions on public sector contracts in countries with poor graft ratings, including South Africa. “The investigation has confirmed that even strong compliance systems are vulnerable and therefore, require eternal vigilance,” SAP board member Adaire Fox-Martin stated. “While we cannot turn back the clock, we can promise to do better.”
Interestingly, much of the Guptas' prominent role in his presidency was highlighted when elite crime busters raided the family’s Johannesburg mansion.
Those who know the family say the brothers, led by Atul, arrived in South Africa in 1993 as white-minority apartheid rule crumbled, a year before Nelson Mandela won the country's first democratic elections. And as South Africa opened up for foreign investment, the Guptas—previously small-scale businessmen in India—built a sprawling empire involved in computers, mining, media, technology and engineering. The brothers wanted the media to be on their (read Zuma’s) side. The New Age, an ardently pro-Zuma newspaper, was launched in 2010, and the 24-hour news channel ANN7 took to the airwaves in 2013 with a similar editorial slant. But the channel ran intro trouble after journalists hired from India returned home with unpaid salaries and tales of mental torture. But it did not bother the brothers, who were growing from strength to strength.
Zuma’s son Duduzane was a director of the Gupta-owned Sahara Computers, and has been involved with several of the family’s other companies. Zuma's third wife Bongi Ngema and one of his daughters have also been in the employ of the Guptas.
And then, claim sources in Johannesburg, the first crack happened. Former deputy finance minister Mcebisi Jonas claimed in March 2015 that the Guptas had offered him the post of finance minister, in return for obeying the family's instructions—for which he would allegedly be paid $50 million. Almost immediately, ANC lawmaker David van Rooyen was found having visited the Guptas home the night before his brief appointment as finance minister on December 9, 2015.
But troubles started when South Africa's ethics watchdog, the Public Protector, published a damning report in October 2016, finding that the state-owned electricity monopoly had awarded a massive coal order to a then-Gupta linked business at well above market prices. The report also alleged that former mining minister Mosebenzi Zwane “traveled to Switzerland with the Guptas to help them seal a deal” to buy a struggling coal mine.
Now, all banks in South Africa have withdrawn their facilities to the Gupta family, complicating the payment of salaries to staff and the day-to-day running of a complex, cash-intensive business empire. BoB, thought to be the last major bank to continue its relationship with the Guptas in South Africa, eventually withdrew from South Africa, effectively ending its association with the controversial family. But the bank faces the prospect of a judge-led inquiry into their business dealings, as recommended by the public protector's report.
Now, in what appears to be one of the biggest scandals in South Africa, the Guptas' fate could be sealed over a scheme that allegedly siphoned millions of dollars from a black-empowerment agriculture project, with arrest warrants being issued for Atul and Rajesh.