EDINBURGH — South Africans have been pinning their hopes on the international community coming to the country’s rescue to remove the grip of the Gupta and Zuma families on the nation’s coffers. Now South African raised Lord Peter Hain, the leading anti-apartheid activist who became a prominent British politician, has put the problem squarely on his nation’s agenda. In letters to UK Chancellor Philip Hammond and European Commission President Jean-Claude Juncker, Hain provides details of individuals who should be investigated for “industrial scale” money laundering. The names include prominent members of the Zuma family – including president Jacob Zuma and presidential hopeful Nkosazana Dlamini-Zuma. Unsurprisingly there are many people with the surname Gupta on the list, plus associates of the crony capitalists like Eric Wood of Trillian. Hain is also shining a fierce spotlight onto corporate evil-doers KPMG, McKinsey and SAP – all of which raked in huge sums by facilitating business dealings of the corruption-tainted Guptas – and global banking giants HSBC and Standard Chartered, which appear to have allowed the laundering of the proceeds of crime. – Jackie Cameron
Money laundering South Africa, Lords Question, 19 October 2017
Can I thank the Chancellor for ensuring the Financial Conduct Authority, the Serious Fraud Office and the National Crime Agency investigate HSBC, Standard Chartered Banks, and also can I add Baroda Bank, each of which expert South African whistle-blowers have told me must have been conduits for the corrupt proceeds of money stolen from their taxpayers and laundered through Dubai and Hong Kong. In my letter of 25 September to the Chancellor I supplied for investigation 27 names and personal identification numbers, including President Jacob Zuma, 11 members of his family, 11 members of his close friends the Gupta family and their 5 associates, together with 14 entities linked to the Guptas and suspected to have been set up for the purposes of transnationally laundering an estimated £400 million or R7 billon of their illicit proceeds. Will he ensure that those Banks, together with European Banks (about which I have similarly written to Commission President Juncker), track down that laundered money, return it to the South African Treasury, and supply evidence to its officials to enable the prosecution of all those connected with such corruption?
See the Peter Hain letters here:
By Thulasiwe Sithole
UK media outlets are today awash with news of South Africa’s state capture scandal with global banking giants HSBC and Standard Chartered Bank taking centre stage in connection with alleged Zupta money laundering.
Labour peer Lord Peter Hain, who grew up in South Africa, has been the catalyst in getting UK authorities to probe financial dealings by the Gupta and Zuma families and other South Africans who have aided and abetted the corrupt.
He sent letters to the UK Chancellor, Philip Hammond, and President of the European Commission, Jean-Claude Juncker, outlining how corruption and cronyism have plunged South Africa into economic crisis. As a result of his inquiries, Hammond has instructed the relevant UK financial authorities to launch investigations.
Hain said that on a recent visit to Johannesburg it became clear to him that the Zuma-Gupta network “is not localised to South Africa – indeed it has been enabled by a transnational money-laundering network” spanning Europe, the Middle East and Asia.
European headquartered financial institutions such as Standard Chartered and HSBC have facilitated financial crimes, he said.
He also names global consultancies KPMG, McKinsey and SAP as “implicated in Gupta criminal activity”.
Hain has called for EU and UK law enforcement agencies to investigate and also for European institutions to “review” their exposure to individuals and companies on a list he has compiled.
Lord Hain’s letter to Chancellor Philip Hammond says a whistle-blower had indicated the banks “may have inadvertently have been conduits for the corrupt proceeds of money”. The peer raised the issue in the House of Lords this morning.
Responding to Hain’s letter, the chancellor said he had referred his concerns to the SFO, FCA and NCA and had also asked his officials to discuss the matter with the UK High Commission in South Africa.
“The UK government takes allegations of corruption and money laundering extremely seriously and is committed to preventing the proceeds of corruption from entering the UK financial system,” he said.
In a statement, the Treasury said: “The government takes such allegations seriously and that’s why the letter has been passed on to appropriate authorities. It’s now for the authorities to determine what action to take.”
A spokesperson for the FCA said it was “already in contact with both banks named and will consider carefully further responses received”.
Speaking to the Guardian, Hain added: “As a former anti-apartheid activist, whose parents were jailed and exiled from South Africa, I feel deeply pained by the betrayal of values of the freedom struggle that is occurring under the political leadership and its business cronies in South Africa today.”
He said he was not accusing British banks of complicity in money-laundering but wanted them to help recoup any funds that have left the country by illicit means.
He pointed to court filings by South African finance minister Pravin Gordhan about R6.8bn (£380m) in transactions involving the Guptas that were reported to South African anti-money laundering regulators.
£400m….let that sink in…money laundering through HSBC & STD Chartered (alleged) re Zuma and Gupta's…How is this guy still president ?
— Gary Thomas (@garyt4547) October 19, 2017
“What I’ve asked the chancellor to do, and he’s agreed, is to have this investigated so that the necessary authorities can be notified. I hope that any stolen money will be identified and returned,” he is quoted as saying.
Hain urged UK authorities “to track that stolen money down and make sure that British financial institutions help return it to South African taxpayers”.
The Guardian has contacted HSBC, Standard Chartered, the Guptas and President Jacob Zuma for comment.
The BBC’s correspondent in Johannesburg, Andrew Harding, said Lord Hain’s letter was “a new twist in a giant corruption scandal that is shaking the South African state, and damaging the reputations of a number of global companies”.
In South Africa, the scandal has already ruined British public relations company Bell Pottinger and damaged auditors KPMG, which removed its top executive team in the country.
The Guardian newspaper has reported that Chancellor Hammond has asked UK enforcement agencies to look into whether British banking groups HSBC and Standard Chartered are linked to South Africa’s corruption inquiry into alleged ties between the wealthy Gupta family and President Jacob Zuma.
The affair has already claimed the scalp of UK public relations firm Bell Pottinger, which counted Gupta holding company Oakbay Investments as a client and saw its business collapse when it was struck off by the UK PR industry body for its work with Oakbay. The South African bosses of accounting firm KPMG, which audited Gupta family businesses, also quit amid fallout from the affair.