The Gupta family would like to leave South Africa but it is taking longer than expected to sell out of their business interests, according to their lawyer. They have strenuously denied all involvement in state capture, corruption and financial irregularity and have vowed to fight for their reputations, but first prize would be to emigrate after taking profits off the table. It’s not hard to imagine why it is proving challenging for the Gupta brothers – Ajay, Rajesh and Atul – to offload their business interests. Their business model seems to have largely relied on links to President Jacob Zuma, whose term is slowly drawing to an end. Although Zuma is expected to push for someone who will continue to work in the self-interest of his clique, there’s no guarantee the next president will be putty in the hands of the Gupta family. A change at the helm of the ANC might set off a chain of events that could easily lead to the unravelling of the #Zupta business empire and possibly even jail for some who have helped themselves to taxpayers’ funds. Not helping matters is that the Gupta businesses aren’t being treated like ordinary, above-board commercial entities. South Africa’s biggest banks would rather run the risk of creating tension with political leaders than facilitate banking for Gupta entities. There might be buying opportunities here, but not for the faint-hearted or risk-averse. – Jackie Cameron
By Matthew le Cordeur
Cape Town – The Guptas’ intention to dispose of their shares in all their South African businesses by the end of 2016 has not come to fruition, their family spokesperson confirmed this week.
“The Gupta family remains committed to disposing of its shareholdings in South Africa as soon as is practically possible, and discussions continue,” a Gupta family spokesperson told Fin24 on Tuesday.
“The family looks forward to making further announcements when appropriate,” they said via email.
The Guptas decided to exit their company Oakbay Investment – and its subsidiary – after South Africa’s top four banks blacklisted their accounts in 2016.
The banks were forced to reveal in court papers last year why they closed the Guptas’ accounts, and cited suspicious transactions, politically exposed people reviews, and the requirement to follow standards of best practices to maintain their reputation.
Their reasons – kept secret for months due to confidentiality agreements – were brought to light after Finance Minister Pravin Gordhan cited them when he approached the North Gauteng High Court to ask for legal protection against being forced to intervene on behalf of the Guptas.
Gordhan’s October application contained details of “suspicious” bank transactions by Gupta-owned companies totalling almost R7bn.
After failing to get the banks to reopen their accounts in 2016, the Guptas first announced their resignation from all boards and management positions in their companies in April, leaving then CEO Nazeem Howa in the hot seat. He eventually resigned from this position in late 2016, citing health reasons.
Next, the Guptas announced plans to sell all shares in their business operations by the end of 2016.
“Since our decision to step down from all executive and non-executive positions in all our South African business in April 2016, the local management team has grown our businesses from strength to strength, with turnover and profits showing good growth and more jobs created,” they said in a statement on August 27 2016.
“As a family, we now believe that the time is right for us to exit our shareholding of the South African businesses, which we believe will benefit our existing employees, and lead to further growth in the businesses.
“As such, we announce today our intention to sell all of our shareholding in South Africa by the end of the year,” the Gupta family said.
The family said at the time they were in discussions with several international prospective buyers and would soon be in a position to make further announcements.
Oakbay Investments – which is owned by the Guptas – owns Tegeta Exploration and Resources, which bought Optimum Coal Mine from Glencore in 2016 for R2.15bn.
The sale and contracts with Eskom were the focus of the State of Capture report by former public protector Thuli Madonsela, who questioned Eskom’s pre-payments to the Guptas as being suspicious. She called on President Jacob Zuma to launch an inquiry into the matter, but the president has asked the Pretoria high court to set aside her ruling.
There were rumours in 2016 that the Guptas had left South Africa for good, with City Press reporter Erika Gibson and former editor Ferial Haffajee writing on October 4: “Two brothers, a mountain of suitcases, five assistants and one wife flew from Lanseria Airport to Dubai amid state capture hostility.”
“The entire family is checking out,” a family source told the paper.
However, they soon returned and are expected to file papers in the North Gauteng High Court on January 20 in response to Gordhan’s application, where they will reveal “how they are victims of a planned, concerted and politically driven smear campaign”.
“The family will not run away,” said Gert van der Merwe, the Guptas’ lawyer. – Fin24