BACKSTORY: Braving Dubai heat, police, journos EXPOSE Gupta shell scam.

JOHANNESBURG — Having lived in Dubai for four years of my life where I worked as a technology journalist and web editor for a newspaper, I understand the risks of doing investigative reporting in that part of the world. While Dubai has opened up to trade and is incredibly cosmopolitan, it still has very limited, backward media laws. Publishing or broadcasting information that is deemed to challenge authorities or powerful people can result in hefty prison sentences in the UAE. So, it’s hugely admirable that two award-winning South African investigative journalists, News24’s Pieter-Louis Myburgh and Angelique Serrao, braved a trip to Dubai to find out where the Guptas live and work. What they discovered would surprise many. The Guptas are totally paranoid as their Emirates Hills mansion is surrounded by security goons in a city that has one of the lowest crime rates in the world. Even more surprising is that six of the Guptas’ Dubai companies are simply a sham — they’re just letterbox entities with no physical presence or staff. The fronts have allegedly been used to launder millions of rands. I was fortunate to interview Myburgh and Serrao about their journey, and here is the backstory to their fantastic expose. – Gareth van Zyl

Read more: Journos fly to Dubai in Gupta hunt: What they DIDN’T find will surprise you

Gareth: Pieter-Louis and Angelique, thanks for chatting to me today on BizNews. Before we get into your Dubai trip I want to get your comments on what happened with SAP on Thursday and all the recent revelations around the DoJ (US Department of Justice) that we’ve had? There’s obviously two DoJ investigations now, seemingly, into the Guptas. What are your thoughts on that?

Pieter-Louis Myburgh (pictured left) and Angelique Serrao (right)
Pieter-Louis Myburgh (pictured left) and Angelique Serrao (right).

Pieter-Louis: Yes, I think there’s some much-needed transparency and accountability finally coming from the whole broader, long-running Gupta-saga. I think the unfortunate thing to remark upon here is the fact that the most stringent accountability and self-correction (and interest in terms of law enforcement entities) is coming from outside of SA – away from where the Guptas have been perpetuating their corrupt activities for all these years. It’s now, largely by all accounts, up to the large international firms who’ve been entangled in their corrupt networks and America’s Department of Justice, and indeed the FBI (Federal Bureau of Investigation) to pick up from the tardiness, I suppose, of the local law enforcement agencies and some of the local companies who’ve been implicated in some of this corruption. That, for me, is the stand-up thing here, that all the action seems to be coming from outside of SA and not over here.

Angelique: I think the question also is the fact that the Hawks are making statements saying ‘that they’re working with the authorities outside of the country.’ It seems to indicate that they’re wanting to do something but then what’s the holdback over here? Why is it not happening within our own country? I think that without anybody publicly coming out and saying it, I think that clearly shows that there is some sort of political interference within our policing structure. That there’s a sense of being scared or that they can’t do as much as they want to do, and I think that’s something we really should be interrogating and asking why, why is that happening?

Gareth: Angelique, you’ve been tracking crooks for a long time. Do the Hawks have the capabilities to go after something as complicated and as complex as this?

Angelique: I think the capability is definitely there. I just think it’s the will, and the political interference, as I mentioned earlier. I think those are the two things that would be stopping it. I don’t think it’s our capabilities. I think we’ve got enough forensic people. We’ve got enough accountants and experts from within our own country. It’s not a lack of expertise. It’s definitely the will.

Pieter-Louis: Yes, I think if you can deconstruct what the Hawks actually looks like on the inside: they’ve got these dedicated units, the Specialised Commercial Crimes Unit (SCCU), whose very purpose is actually focussing on this corruption related white collar crimes and bribery and contraventions of legislation, like the Public Funds Management Act. And there certainly is capacity and talent, and dedication in those pockets of the Hawks but I think, as Angelique very correctly pointed out, the problem is higher up.

Gareth: Right, let’s get into your Dubai trip. You guys both went to Dubai. News24 has just published this very interesting exposé on your site this morning. It’s a huge story, the fact that you went there to go and see what the Guptas are up to. What did you find?

Angelique: Not much, to sum it up in two words.

Pieter-Louis: I think that’s such an important thing to mention. The fact that we didn’t find much is the story really because what we went to go and look at, essentially, was a string of companies that have received revenues in and around the region of R1bn, related to SA government contracts – Transnet contracts, the Free State dairy project and so on. So, one would expect to find fully operational companies, I suppose, because the Guptas are always coming out with excuses like ‘no, but there’s a justified business reason for these payments, we do consulting work, we had some contribution to this contract that justified the payments.’ I think it was important for us to go out there and actually just to prove and confirm the farcical nature of this offshore network of companies. It’s nothing but fronts and shells that they use to launder money through.

Gareth: How many companies are we talking about here?

Angelique: We looked at, at least six. There were other companies that were listed but we couldn’t find any addresses for them. There were one or two (that we couldn’t locate) but I think we got the vast majority of the companies actually listed in Dubai. The fact that there weren’t any addresses listed indicates that we would have found exactly the same thing, even if there had been any. As AmaBhungane often calls them, they’re just post box companies.

Gareth: I watched your video in which you are going to these company doors and often nothing is there. Sometimes there’s perhaps a logo but it looks as if these companies are just shell companies. Like you say, ‘there’s absolutely nothing to it.’ So, what are they’re being used for? Are they just simply being used to funnel money through to other destinations?

Angelique: Yes, that’s what it appears to be, without a doubt.

Pieter-Louis: Yes, I think a lot of people might be in the dark as to how these international money laundering structures work. Definitely, the Guptas are not the only ones who are involved in these kinds of practices. Basically, you go and set up a company in a jurisdiction, like Dubai. Especially jurisdictions that are known for their secrecy, opaqueness, and lack of transparency. All you have to do, basically, is register a company and get an address. We now know these addresses are pretty much fraudulent. It doesn’t represent a real company and that would allow you to open up a bank account, and that’s the only thing they’re really after. They need some sort of a registration process to be completed. To have at least some sort of a footprint in the country and then they can open a bank account. That is where the proceeds of these corrupt tenders end up, is in these farcical front companies.

Gareth: A lot of these companies are based in what looks like ‘Free Trade Zones,’ right?

Angelique: Yes.

Gareth: So that comes with even lower tax?

Angelique: Yes, it does and that’s where international businessmen can buy up businesses in Dubai or open businesses.

Pieter-Louis: Yes, they strategically chose these options and they set up a couple of companies in Dubai itself but especially one called ‘JJT’, which is one of the companies through which a staggering R700m went through. JJT is in one of these ‘Free Zones.’ I think the most attractive element to it is that operating a normal Dubai business would require you to have some sort of a local patron, who has a 51% share in the company, and you can only acquire as much as 49%. These ‘Free Zone’ companies, in contrast, allow 100% foreign ownership. So, the Guptas could be the ultimate 100% beneficiaries of these ‘Free Zone’ companies.

Gareth: Did you go past the Guptas home as well, I think in Emirates Hills?

Angelique: We did indeed, yes.

Gareth: What did you see there?

Angelique: The suburb was an interesting one. It contained every type of mansion that you can conjure up in your mind. It was quite an extensive suburb; it was quite big. We drove for quite a while.

Pieter-Louis: We did, it’s like a town or a little city, and I think that’s probably the closest Angelique and I came to really nipping about our situation. We became really nervous because I think Dubai is not the easiest place for an investigative journalist to operate in, for these very reasons. These tax secrecy reasons and the fact that you don’t just go and ask questions about companies and money, really so, we drove in there knowing that we are now going near to what is very possibly the full time residence of, I think, Rajesh Gupta at this stage, the youngest brother, and we were outside in a taxi for only a little while, when we noticed a group of guards, or what looked like guards, sitting in the garden. They noticed us and that’s when we told the driver to rather get out of there.

Angelique: Yes, but there’s no doubt it’s their residence. There’s a big sign up front and it clearly says, ‘Gupta.’ Yes, there’s absolutely no doubt that that is the residence of the Guptas.

Gareth: So, it’s almost a form of family arms that’s on the front?

Angelique: Yes, on the front door, yes.

Pieter-Louis: Yes, it’s like a family crescent kind of thing.

Gareth: Wow, that’s interesting. That sounds like it’s a very similar situation to their residence in Saxonwold, Johannesburg because they’ve also got heavy security there.

Angelique: Yes.

Pieter-Louis: Yes, I think that heightened security awareness certainly transpired to their Dubai location. It’s definitely the same kind of scenario — it’s actually an interesting phenomenon, this security awareness they have. What kind of normal business people, like they try to portray themselves (especially amid the media focus on them), runs around with this absolute mob of bodyguards, 24/7, and these guys are certainly also present on the ground in Dubai too.

Angelique: Absolutely.  

Gareth: Especially in a city like Dubai, which has one of the lowest crime rates in the world?

Pieter-Louis: There are cameras everywhere.

Angelique: It’s a city with cameras. In the taxis there’s cameras. Every building has two to three cameras situated all around. It’s something you notice.

Pieter-Louis: Yes, all the locals describe how safe it is and how few murders there are, if ever there are any murders, and how few violent crimes there are. So, yes, these groupings of bodyguards that they retain on that side seems very excessive.

Guptas flee South Africa with ‘all bags full’. More magic available at www.zapiro.com.

Gareth: Can you tell me about what the planning was like before you went because, obviously, you had to film secretly. How did you go about planning that and then executing it? Was it nerve-wracking, while you were there?

Angelique: Yes, I was terrified. It was definitely terrifying. I think it took quite a few weeks of researching the companies and we did that extensively. We looked at what companies exactly were there, what addresses were there. We mapped out where they were situated and how were we going to get there etc. We decided not to bring any camera equipment with us. It was just for safety’s sake and it would just keep us as low key as possible.

Pieter-Louis: Yes, so it was 100% camera phone product that you see when we did the video version of our exposé.

Gareth: So, even when you were walking? I think there was a few scenes when you were walking through some of those office buildings and it looks like the camera is slightly hidden.

Pieter-Louis: Yes, and I don’t want to give away too much of a trade craft, but it was my top pocket and then, there we go, we had a hidden camera. I don’t know if Angelique would agree but even during our planning for the whole trip, we were both certainly aware of the risks and the dangers of filming in a location that is not open to investigative journalism. But I think we only, for the first time, really understood the gravity of the situation when we spoke to local business people over there and they in no uncertain terms told us that what we are doing over there is pretty dangerous and that local authorities do not tolerate this kind of snooping around and exposing the seedier and underbelly of this financial system.

Gareth: In Dubai, are the Guptas as well-known as they are in SA: I would imagine not?

Angelique: No.

Pieter-Louis: Smaller fish in a bigger pond.

Angelique: As I said, that area that we were in, for instance, was filled with mansions so, they are definitely not the only ones that are going there that can afford that kind of thing. The entire city is built on this investment focus so these outside businesses coming in from all over the world – that is Dubai. That’s the entirety of Dubai.

Pieter-Louis: Ask no questions about the origins of those investments.

Angelique: No, so they really are just one of many.

Pieter-Louis: Yes, look I think broadly speaking, their international notoriety is growing now. I think because of the DoJ’s focus on them, and the FBI and what happened with the Bell Pottinger in London and so on. But I think Dubai is still very much in the dark about what this Gupta family has been up to in SA. I didn’t get a sense that it’s a family that’s that well known in the city or the surrounds.

Gareth: Do we know where the Guptas are now because it sounds like they’ve got a very permanent residence in Dubai? They’ve got very permanent residences here in SA too. So, do we know where they are? They’ve gone under the radar recently.

Angelique: They appear to be travelling backward and forward. I don’t think their lifestyle has changed, from what we can see.

Pieter-Louis: Yes, but they haven’t fled SA and I think that’s one point. At their residence in Saxonwold, I’ve been told by one insider that you can identify when they are there if there are only one or two guards standing outside, or sitting outside in a chair. When they are there, then there’s a group of 5–8 bodyguards sometimes, patrolling the surrounds, patrolling the neighbourhood, outside the immediate neighbourhood outside the property. In the last couple of weeks, I’ve driven past there and I’ve seen the guards there. They definitely appear to be there. So, I think that maybe Rajesh keeps the seat warm in Dubai whilst Atul and Ajay are still wrapping up business over here in SA.

Gareth: I believe that the Guptas also had Diwali lights outside of their Saxonwold home so, it looks like business as usual for them.

Pieter-Louis: Yes, as if nothing is happening. As if there is not a massive scale exposure and scrutiny of their corrupt dealings over the last couple of years – it’s just business as usual.

Gareth: There’s a lot that’s happened in the last six months, the Guptas have gone global. Basically, McKinsey, KPMG, SAP – all of these companies have been embroiled within the Gupta-web. What do you think is going to happen next?

Angelique: Look into the crystal ball.

Pieter-Louis: I think the optimist would say that next our law enforcement agencies and authorities will take an equal interest in some of these corrupt dealings as has been happening outside, and some of their local companies here. But the lethargy doesn’t seem to be subsiding, in terms of that. The Hawks might tell us, as Angelique mentioned, that they are seriously pursuing this but that seems to be the spin, and nothing more than a spin. I think what is going to happen next is I think there’s going to be a snowball effect in terms of representations and admissions, by foreign companies especially. Especially companies that fall under the ambit of the Foreign Corrupt Practices Act in the United States. I don’t see SAP’s sudden spilling of the beans as some sort of a noble act to come clean. They are very well aware of the fact that the Foreign Corrupt Practices Act allows for certain lessened sentences if you, early on, make some admission that you were involved in dodgy dealings. I wouldn’t be surprised if some of those other companies listed on the JSE and other global exchanges make a very well informed legal decision to now go and say, ‘our dealings with SA was fundamentally flawed and corrupt.’ I think that’s going to be the next interesting thing to watch.

Gareth: You guys are both published authors, before I get onto your book, Pieter-Louis. Angelique, you wrote a book and finished it about 7 months ago on Radovan Krejcir (Krejcir: Business As Usual). How has the response to that book gone? I believe that it was also translated.

Angelique: Yes, it’s been on sale now in the Czech Republic. That’s been interesting and doing quite well over there, I understand. It’s been a good response. It’s been a little bit more, low key also, because of the safety aspect of it. It’s not the safest book to have written or the safest subject matter to have written about but yes, it seems to be doing quite well. I’m still getting pretty good reviews and it still seems to be selling. It’s still out in bookshops so, that’s always a good sign.

Pieter-Louis: Angelique is now barred from two countries, UAE and the Czech Republic because of safety concerns, effectively.

Gareth: It makes it more challenging the globe, doesn’t it especially as Dubai is at that central point and I guess, Croatia is in Eastern Europe as well.

Angelique: Yes, exactly.

Gareth: Pieter-Louis, your book as well on the Guptas (The Republic of Gupta), which you published earlier this year. How’s that gone?

Pieter-Louis: There’s certainly some interest and I think we’ve been in a fortunate position, my publisher and I, because of the timing and because of all these revelations, the Gupta Leaks. It happened right in the midst of the Gupta Leaks or before the Gupta Leaks – it was put on the shelves.

So, I think that interest in these issues and in the family definitely also transferred to sustain interest in the book itself. It’s been a great journey also, as a first-time author, to have these opportunities to participate in discussions on State Capture and engage with other individuals who research this phenomena and people who are active in the political commentary sphere. So, it’s been a very rewarding journey so far.

Gareth: Amid all that’s happened now, are you going to write a follow-up book?

Pieter-Louis:  There’s some pressure for me to do that. I think I’d like to give it some time to see how this saga ends because I wouldn’t want to be in a position where I’m constantly updating, like have a third, fourth, and sixth edition. I think there’s got to be some sort of a definitive end to this story of the Gupta family in SA.

Gareth: Great, thanks guys for chatting with me today. It’s been very interesting stuff.

Thanks for having us.

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