Capturing the ‘ghost’ of Ajay Gupta

Johannesburg — The Guptas are a phenomenally wealthy Indian family who managed to muddy South African politics by forging a discreet alliance with the country's recently resigned president Jacob Zuma not long after apartheid ended in 1994.

In mid February, specialist crime-fighting unit The Hawks raided a handful of Gupta compounds, including the family mansion in the upmarket suburb of Saxonwold in Johannesburg. Many of the Gupta-held bank accounts were frozen, some then unfrozen due to court orders, and a warrant for Ajay Gupta’s arrest was issued on February 14, 2018 – the same day Zuma stepped down as South African president. In March at least 31 Gupta-owned properties in Delhi, Saharanpur and elsewhere were seized by Indian tax revenue authorities.

A 52-year-old clean shaven and stockily built man, Ajay Gupta, is apparently the family's de facto leader. Ever since the February raid, he's been evading the police and his whereabouts are unknown.

Considering the mega-wealthy family allegedly have business interests and own property in Dubai, Gupta may be in the United Arab Emirates.

Accusations are rife that a toxic mix of ambition, cajolery and financial misconduct contributed to the rise of the Gupta business empire – and that alone has led to their downfall.

Born and schooled in Saharanpur, Uttar Pradesh, approximately 200 km north of the Indian capital Delhi, Ajay Gupta is the eldest sibling of brothers Atul and Rajesh (also known as Tony) – all reported to be in their 40s and 50s – and sister Achla. Their late father Shiv Kumar Gupta employed all his sons in his spice venture SKG Marketing, after they graduated – Ajay with a Bachelor of Commerce degree.

Atul was the first of the brothers to arrive in South Africa in 1993, when the Apartheid state was transitioning from minority white rule to a democratic dispensation. He set up Saharan Computers – the first of many companies in the Gupta business empire. When Saharan’s revenue exceeded $8.28 billion (100 million South African Rand), Atul enlisted his brothers to help run the company. Ajay Gupta appears to have made regular visits to the country from 1995 onwards, making South Africa his permanent home in 2003. 

According to Pieter-Louis Myburgh, author of the book The Republic of Gupta: A Story of State Capture, Saharan holdings and its subsidiaries laid the “foundation of the friendship between Zuma and the Guptas,” with both parties claiming the first official introductions occurred in 2002 or 2003 at a Saharan hosted function.

Unnamed sources employed in the family’s businesses tell of Ajay, Rajesh and and Atul Gupta being polite and charming upon first meeting or when it suited them, but also shrewd and, at times, ruthless when it came to money. The Gupta brothers stand accused of not paying employees such as security guards over time, delaying payments to suppliers and always haggling for a cheaper deal when dealing with external service providers.

Crony capitalism

In the Betrayal of the Promise: How South Africa is Being Stolen report, co-author and Executive Director of the Public Affairs Research Institute, Professor Ivor Chipkin, refers to the Guptas' role in state capture as “the start of a silent coup from about 2012 in South Africa." He adds this ultimately led to "extortionist rent-seeking," the consolidation of power for Zuma and his elite cronies and the emergence of a “shadow state,” which posed a direct threat to South Africa's democratic foundations and constitutional framework.

“Central to the project of state capture was the shifting of power from key appointed decision makers ... Zuma and his allies the Guptas collectively repurposed state institutions and state-owned enterprises beyond their key mandates," says Chipkin. "This is associated with an aggressive attempt to influence and infiltrate South Africa's national treasury, the South African Revenue Service (SARS), the National Prosecuting Authority, and others.”

By March 2016, several members of Parliament, including Vytjie Mentor, and ministers such as Mcebisi Jonas had blown the whistle on allegedly being offered key government positions by the Gupta family, with Jacob Zuma’s alleged consent, in a brazen attempt at securing their loyalty and pliability.

The South African National Prosecuting Authority is yet to reveal on what charges Ajay Gupta will be prosecuted, but rumors are mounting that he may be wanted in connection to his alleged offering of a $ 49.66 million ( R600 million) attempted bribe to former deputy finance minister, Mcebisi Jonas.

Zuma controversially replaced Finance Minister Nhlanhla Nene with the financially inexperienced Des van Rooyen. The day Nene was dismissed, December 9, 2015, coincided with Zuma’s cabinet agreeing to consider a massive nuclear procurement programme, including construction of nuclear reactors at an estimated cost of between $ 50 billion (R800 billion) to $100 billion (R1.6 trillion). Nene’s department had allegedly shown resistance to the nuclear agreement.

“In a way we need to be thankful for the firing of Nene and the appointment of van Rooyen as it was a bridge too far, it was too blatant … That specific overreach was the turning point in the saga,” says Sam Sole, managing partner of the amaBhungane Centre for Investigative Journalism.

TRT World ’s attempts to contact Ajay Gupta on his personal number went unanswered at the time of going to press. The Gupta family have fervently denied claims of any role of political influence, maintaining their “detractors banded together to spread lies,” according to Myburgh.

In the Guptas' defence

Andile Mngxitama, president of the Black Land First (BLF) movement is however willing to go on the record to launch a defence of the Guptas in the face of what he terms “the anti-Gupta witch hunt.”

Mngxitama maintains that Ajay Gupta and his family are his organisation’s “tactical allies”. At pains to explain BLF ideology is rooted in Marxist discourse and that white people control not only the means to production, but also the judiciary, media and politics, he says, “The Guptas are hated by established white interests because these Indian upstarts were able to organise themselves. They became a threat to white-dominated business interests.”

What made the family indispensable was their deep access to South Africa’s power corridors, including their perceived influence over the country’s intelligence structures. The State Security Agency (SSA), according to Myburgh’s book The Republic of Gupta: A Story of State Capture, has traced the Guptas’ influence over a list of political players with regards to the awarding of dubious government tenders. The family’s reach even exceeds the then Public Enterprises Minister Malusi Gigaba.

Opposition party the Economic Freedom Fighters spokesperson Mbuyiseni Ndlozi explains, “Gigaba not only helped facilitate South African citizenship for the [Indian-born] Guptas” during his tenure as Home Affairs Minister, but that when he headed up Public Enterprises, boards at parastatals such as Eskom were “restructured to accommodate people connected to the Guptas to ensure important deals favourable to their companies.”

“Gigaba’s active participation in the Zuma-Gupta syndicate’s arrogant project to defraud South Africa was unapologetic”, adds Ndlozi.  

This criticism is backed up by further evidence-based allegations from Myburgh. “Even if a court of law can’t prove he received bribes or kickbacks from the Guptas, Gigaba failed in his ministerial oversight and essentially violated the rules as set out in the Executive Members’ Ethics Act.”

This was particularly evident when Gupta-owned company Trillian reportedly reaped undue benefits from a lucrative locomotive deal.

The "trillion million" scandal

The scandal was dubbed the Trillian millions, in which the Guptas, in partnership with Jacob Zuma’s son Duduzane Zuma, and on behalf of China South Rail, allegedly influenced the awarding of a contract for the supply of over 1,000 new locomotives.

The government-owned Transnet company  purchased $4.14 billion (R50bn) worth of locomotives from China South Rail, China North Rail, Bombardier and General Electric.

According to Myburgh, the Guptas then scored about R5bn in kickbacks from China South Rail, which got the lions’ share of the Transnet tender.

"The Gupta-linked Trillian acted as a transaction adviser for Transnet," Myburgh says.

Gigaba’s spokesperson Mayihlome Tshwete says, “The Minister has repeated his innocence and is not mentioned in the State Capture Report. If called upon, he will testify in front of the Commission of Inquiry.”

Myburgh’s research suggests that when word reached Zuma that the SSA was monitoring the Guptas, his office allegedly pressurised then minister of State Security, Siyabonga Cwele to warn his top spooks off pursuing the probe. Myburgh argues these developments point to a “systemic failure of checks and balances.”

If Atul Gupta is the smooth-talking, mustachioed front-man of their once booming, now faltering politically connected businesses, then Ajay Gupta is “the patriarch of his family … and, as far as we can tell, the strategic mind behind the Gupta empire,” says Sam Sole, managing partner of the amaBhungane Centre for Investigative Journalism.

Sole’s amaBhungane and reporters from media outlets Daily Maverick and News24, trawled through a terabyte of data in order to break reams of evidence-based, whistleblower driven stories of the family’s entrenched political leverage and alleged pilfering of state coffers, under the umbrella of the #GuptaLeaks.

One of the most glaring embezzlements was related to a dairy farm tender. “The Guptas looting at Vrede Farm was, if not quite the original sin, then close to it,” Sole says, adding that their “fingerprints were all over this brazen diversion of state resources” away from a project that was set up “supposedly to help poor, emerging black farmers.”

Through this allegedly fraudulent dairy farm scheme, the Guptas allegedly milked the dairy project dry of its $18.21 million  (R220 million) allocated funds, between April 2013 and May 2016, with less than one percent  being spent on the farming project in the Free State province.

 “Their conduct was pernicious and shocking … the Guptas and their associates showed how callous and uncaring they are about the poor,” Myburgh says.

He further explains that tracing of illicit financial flows suggest that money was funneled to shell companies in Dubai.

The big fat Indian wedding

Sole and Myburgh both mention that an estimated $2.48 million (R30 million) from the dairy project proceeds was directly channeled into subsidizing the 2013 lavish wedding of Vega Gupta – daughter of Achla Gupta, only sister of Ajay – at the upmarket Sun City holiday resort, a short drive from South African capital city Pretoria. Referred to as Gupta Gate in the press, the days leading up to the nuptials saw a security breach scandal unfold after a privately chartered plane carrying Gupta’s wedding guests landed at the air force base.

News the Indian carrier Jet Airways plane landing at the Waterkloof base triggered public outrage. Zuma was accused of authorising the landing as a personal favour to the Guptas. But a scapegoat was found and blame was later squared at Vusi Bruce Koloane, Chief of State Protocol at the International Relations Department. An investigation accused him of using Zuma's name to illegally authorise the landing.

While the ghost of the Guptas continue to haunt household conversations and both brothers have yet to be detained, the question now begs whether newly appointed South African President Cyril Ramaphosa will follow through on promises of accountability for those allegedly guilty of capturing the state for their own enrichment.

But in a recent cabinet reshuffle Ramaphosa reinstated Nene as Finance Minister, while Mr Gibaga was put back in charge of Home Affairs.

Chipkin says Ramaphosa “has made all the right noises” with regards to "a hands-off approach to a review of SARS, sound terms of reference for the State Capture Commission” and "depoliticising the work of the National Prosecuting Authority."

Ndlozi is less optimistic, however. “The plot as we understand it is they have to ensure the Guptas' fall … they may do this in a way that Jacob Zuma is not arrested and held responsible for his [state capture related] crimes,” he says. “We know all the law enforcement agencies are under direct political interference, which is dangerous for our democracy as they are so used to taking political instruction that Zuma and his close allies may not be brought to book for their lawlessness.”