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Paul O’Sullivan queries Sasfin over relationship with Guptas. Here’s the full story.

JOHANNESBURG — The Gupta email leaks have opened a can of worms when it comes global companies finding themselves ensnared in the immigrant family’s corrupt web. KPMG, SAP, Software AG and McKinsey have all come under fire for their alleged kickback deals with Gupta-linked companies. Therefore, when trawling through the Gupta email leaks, investigators such as Paul O’Sullivan are keeping a close eye on who exactly is mentioned in those leaks. He spotted something about Sasfin and wrote to Zane Schalkwyk, an executive at Sasfin. (Be sure to read Sasfin’s full response at the end of this post – the response is from Sasfin’s head of marketing and communications, Cathryn Pearman.) CORRECTION: I previously wrote that Sasfin were invited to the Guptas’ 2013 wedding. This is not the case and Sasfin explains at the bottom of this story that they were invited to Oakbay’s post-listing function.  – Gareth van Zyl

By Paul O’Sullivan*

Dear Zane,

With my other hat, I am one of the founders of Forensics for Justice. We are well known for digging deep and scratching wide in our search for the truth.

Please go to: www.forensicsforjustice.org for more data and an understanding of some of the cases we are driving forward.

Forensic investigator Paul O’Sullivan

I want to compliment SASFIN, I was very impressed with the speed in which SASFIN ditched KPMG, following the U-Turn KPMG did on the SARS report and the revelation that KPMG turned a blind eye to the R30m Gupta wedding expenses. In respect of the Gupta wedding, I attach just one of the many e-mails, (FW  Linkway Hotel & accomodation costs) (its Oakbay staff that cannot spell accommodation, not KPMG) that proves KPMG staff knew exactly what was going on with the wedding, and even assisted with tax-advice to the Gupta’s in respect thereof, who classed the R30m as an ‘expense’ in the course of business. So I think your decision to part ways with KPMG was probably well founded and I hope you find auditors that are up to your high ethical standard going forward.

I’m kind of sorry in a way, that KPMG should crash and burn, as they have for many years been a cornerstone of some very well-meaning and public-spirited ethical activities in South Africa. For many years they hosted the Institute of Directors ‘Audit Committee Forum’. As a fellow (and one of the earliest members) of the Institute of Directors, I also sat for many years on the KPMG sponsored audit committee forum. With the support of KPMG we helped add value to improving ethics in companies in South Africa, particularly with regard to the King report on Corporate Governance. Of course, that was before the greed of the Guptas took a hold on the country. That greed was so evil, it even managed to get a hold over ten or more senior KPMG employees, who brought the organisation into disrepute and cast a very dark shadow over our democracy. The wrong-doings of those ten people will cost the jobs of thousands of decent employees, and I’m sure you will be pleased to say SASFIN helped make that happen.

Nhlamu Dlomu has been appointed to succeed Trevor Hoole as KPMG SA CEO.

I wrote to Nhlamu Dlomu, and I gave her some well-meaning advice. As a corruption buster, I know that it’s not enough to say sorry, and admit you were wrong. The only way to show contrition is to come clean and do the right thing in exposing the rot. I know a bit about that sort of thing, as I was one of those that suggested supping with the devil ten years ago, and giving Glenn Agliotti immunity from prosecution on certain offences, if he came clean on the payments he made to then chief of police Selebi. I advised Nhlamu, if you want to save KPMG, do the same and come clean and burn the bad guys. In the criminal procedures act, we call it getting a section 204. The thing about a 204, is that you have to tell it all. Only at the end of the trial, does the judge determine that you complied with the 204 and came clean in a frank and honest manner.

I told Nhlamu that, in my opinion, the longer she leaves the ‘coming clean’ the more pain KPMG will take. I guess she will do whatever it takes and try and balance things between saving KPMG’s reputation, telling the truth and saving jobs.

She knows the weight on her shoulders and will be guided by her lawyers, bosses and conscience.

I then got to thinking that I should look at other e-mails amongst the hundreds of thousands we have, and I stumbled upon a few that contained the names of certain SASFIN employees. There are actually quite a lot of mails, but I’m just going to deal with a small selection, so I can understand why SASFIN were so quick to go public with the ditching of KPMG.

I would like to canvass a few of those mails with you, so as to clear in my mind as to what the relationship was between the Guptas, SASFIN and KPMG, as I’m confused by what I see:

The first mail I would like some clarity on is attached under the name ‘Copy of Copy of 56 Room Allocation xlsx’

The room allocation extracted from the top of the list on the spreadsheet attached to that mail, looks like this:

It’s clear from the list that the first three invitees were from KPMG and the next four invitees were from SASFIN, of which you, Megan Young and Johan Fourie are shown as ‘attending’.

I was wondering if you could perhaps let me know what this was all about, since you appear to have shared the pride of place with KPMG and taken hotel rooms with the Gupta ‘family’ which included Duduzane Zuma?

The second mail I found of interest is attached and has the name ‘Fwd  STT – Action & Saranya’

From this mail it seems that KPMG were not the only people giving advice to the Guptas and I was wondering if SASFIN was paid for this advice or not?

The third mail that I cannot understand is attached and has the name ‘Guest & Master mind list – 27-8-2014 (09PM)’

I note that there are five KPMG names and two SASFIN names, one being director Michael Sassoon and the other I think is a typo and meant to be Roland Sassoon instead of Michael Roland. I was wondering what this event was that your directors shared with the Guptas and KPMG?

The last mail I would like some clarity on, is attached and is called ‘Untitled’

I have a feeling this could be connected to the 56 room e-mail, but would just ask you if you don’t mind explaining why George van der Merwe of Shiva Uranium would be writing to infamous Gupta lieutenants to invite you and KPMG to whatever event this was that needed ‘rooms’. If you don’t think it’s an invasion of privacy, I wondered if you would mind telling me what that was all about.

I’m certain SASFIN did do the right thing in ditching KPMG, regardless of how many jobs are lost, but also thought about a saying I remember from my youth in Ireland: ‘The pot should never call the kettle black’.

In case you think that might have a racial connotation, I want to be quick and point out that there’s none. When I was a child, we did not have electricity, gas, or running water. All the food preparation was done on a fire and the fire was burning ‘turf’ which gave off a very black smoke. The best way to understand this is to go to: http://www.urbandictionary.com/define.php?term=Pot%20Calling%20the%20Kettle%20Black

I know it’s a long mail, but I’m not very good at shortening things that are important, if I want to get the message over clearly.

  • I would, therefore, be very happy to get a detailed response, setting out the full details of:
  • The nature of the relationship between the Guptas and SASFIN
  • How much SASFIN earned from that relationship.
  • How many SASFIN employees ate at the Gupta table or slept in Gupta hotel rooms.

As I really do trust the business savvy of Alec Hogg and his trusty lieutenant Jackie Cameron, I’ve copied them in on this mail, as I think this is a public interest issue. Even more so because you have been at the forefront of seeing some of the 95% of ethical KPMG employees losing their jobs.

Since I know that Nhlamu is also lamenting the speed at which severance packages will have to be prepared, I thought I would copy her as well.

In the interests of transparency, I think it would be good to copy all on your response.

Best wishes,

  • Paul O’Sullivan is a forensic investigator who also heads up Forensics for Justice.

By Cathryn Pearman*

Dear Paul

Thank you for your mail and I hope that you are well.

Please see below a summary of responses to your queries.

In general:

We wish to make clear that Sasfin’s relationship with Oakbay was of a professional nature and that we did not have any direct involvement with the Gupta family.

It is well documented and reported that we did list Oakbay on the JSE following a mandate we entered into with Oakbay in 2013 and had an ongoing engagement with Oakbay in our capacity as JSE sponsor and that we were one of the first banks to terminate our association with Oakbay in early 2016.

With regard to your query on the event guest lists in your possession:

No Sasfin director has ever attended an Oakbay function. Two Sasfin employees attended the Oakbay post-listing function as representatives of the Sasfin Capital team as is common for most listings. Nobody from Sasfin was offered accommodation and certainly never stayed in a hotel room at this or any other function associated with Oakbay.

One Sasfin employee was invited to the South African of the Year Awards hosted by ANN7 in 2014 which she attended. Aside from these events, no employee mentioned on these guest lists has ever attended any other Oakbay/Gupta function.

Nature of Relationship:

As publically stated in the listing documents, the listing of Oakbay was a listing by introduction and no fresh capital was raised for Oakbay from the listing. The price charged to Oakbay was a market related fee of R3.5 million and was disclosed in the pre-listings statement. Our relationship with Oakbay was as JSE sponsor.

Advice provided:

Sasfin, as JSE sponsor to Oakbay, provided listing advice to Oakbay in line with its duties as JSE sponsor to Oakbay. To the best of our knowledge, no advice outside the realm of this relationship was provided to Oakbay.

Sasfin’s engagement with KPMG:

While Sasfin has decided to put our audit out to tender in the coming months, as things stand KPMG remain our auditors. The decision to put the audit out to tender is not one that was taken lightly and was taken with consideration to audit rotation and fast-tracked due to the well-publicised concerns regarding KPMG. Sasfin has only had positive dealings with KPMG and the individual auditors that we dealt with over our long association. We most certainly would not be pleased to say that we caused thousands of decent employees their jobs and hope that KPMG will appropriately address any concerns raised and come out of this difficult situation healthy.

As far as I can see, the above addresses all your queries, however, if you have any further queries, please do let us know.

Regards

Cathryn

  • Cathryn Pearman is the head of marketing and communications at Sasfin.
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