Exposed: How Gupta family hijacked arms manufacturer Denel to tap billions of dollars. #GuptaLeaks

EDINBURGH — The Gupta family’s ambitions to take control of South Africa’s state-owned enterprises has no limits, it seems. They had their collective eye on funds in South Africa as well as huge sums of foreign currency generated in arms deals. The #GuptaLeak emails – records from the heart of the Gupta business empire – help solve the mystery behind Denel Asia, the controversial arms marketing partnership that National Treasury has tried to block, say journalists working through the correspondence. The amaBhungane team has revealed that the Guptas tried to sell Denel’s intellectual property to India, while watering the state arms company’s stake down by half. “Acting as middlemen, they took the biggest stake for themselves and cut in a powerful Indian tycoon”. The Guptas also wined and dined Denel’s then new chairman, Dan Mantsha, who sent them confidential government documents and hinted that he’d like the Guptas to settle his municipal accounts. – Jackie Cameron

Staff Writer

The Gupta family set themselves up to sell state arms manufacturer Denel’s weapons to India in a deal arranged to sideline Denel and take the biggest share for themselves even though it was Denel’s proprietary technology that was to be sold. Denel officials were in cahoots with Gupta associates.

These details are revealed by amaBhungane reporters who have been working through the #GuptaLeaks.

“In January 2016, Denel announced the formation of Denel Asia, a Hong Kong-based joint venture that it controlled, holding 51%. The rest belonged to a company registered to Gupta lieutenant Salim Essa,” says amaBhungane.

“The #GuptaLeaks show they were misleading South Africans. Emails in the trove show Denel officials knew the overriding purpose of setting up Denel Asia was to sell arms to India – targeting more than US$8-billion in deals there – via a second joint venture called Denel India.

“In Denel India, Denel’s participation was watered down to just 25%. The Guptas, who brought little to the table besides their political connectivity in South Africa and India, planned to wield a controlling 42% stake – exercised via Essa and their brother-in-law, Anil Gupta,” says the independent investigative journalism unit.

Another link to THAT wedding at Sun City

The amaBhungane team points out that Anil, a former minister in the Indian state of Uttarakhand, is married to Achla, the Gupta brothers’ sister. The controversial Gupta wedding at Sun City celebrated the marriage of Anil and Achla’s daughter, Vega.

“The files contain emails and draft contracts that show that as Denel Asia was being established in Hong Kong, the Guptas were putting together a second-tier company in India called Denel India, in which their Indian brother-in-law would hold a significant stake.

Read also: Gupta ‘illegal’ military getaway car: Have Guptas lost faith in SAPS to protect them from angry crowds?

“They also show the Guptas had a direct involvement in the establishment of Denel Asia, suggesting Essa was little more than their proxy.

“Denel India was to be owned by Denel (25%) and Essa (24%) via Denel Asia, as well as Anil Gupta (18%) and the Indian multinational Adani Enterprises (33%).

“Thus, Denel’s participation was to be diluted significantly – and the emails show Denel executives were well aware the company would enjoy only a minority stake in the Indian venture.”

Denel was previously blacklisted from selling arms to India because it had used commissioned agents, a banned practice there, explains amaBhungane.

“However, the Denel Asia and Denel India structures circumvented this by including the Guptas – effectively Denel’s agents – within the company structures.”

Zapiro’s latest take on #GuptaLeaks and the question if there is any smoking gun. More of his magic available at www.zapiro.com

After amaBhungane first wrote about Denel Asia in early 2016, “the national treasury confirmed that it viewed the partnership to be illegal”.

“It said it had not approved the deal under the Public Finance Management Act (PFMA). Denel publicly disagreed and is now suing treasury and the finance minister,” adds amaBhungane.

Meanwhile, the #GuptaLeaks have already exposed how the Guptas hosted Mantsha on lavish trips to Dubai. Now they also reveal that Mantsha forwarded a copy of his outstanding municipal account for R14,238 to Gupta lieutenant Ashu Chawla to clear, reports amaBhungane.

For more on the finer details of the Gupta plan to score from Denel’s intellectual property, read: #GuptaLeaks – How the Guptas screwed Denel.

About Dan Mantsha: He obtained a B Juris in 1991 and LLB in 1993 both from the University of Venda, says the South African government. “He is an attorney who has acquired valuable experience over the years in corporate finance, transactional advising, business management Commercial Law, media and communication law, administrative and constitutional law.”

Global Supplier of World-Class Defence Products and Solutions
Operating in the defence, security, aerospace and related technology solutions

Denel Media Statement On Denel Asia JV From: Media Centre / News & Press

16 May 2017

Denel has noted media reports with regards to the National Treasury (NT) views on the new venture company Denel has entered into as a vehicle to penetrate the Asia-Pacific markets.

Denel confirms that the Denel Board Chairman, Mr Daniel Mantsha did have a meeting with the Minister of Finance, Mr Malusi Gigaba in Durban recently. This will be followed up by a meeting between the minister of Finance and the Minister of Public Enterprises to discuss all the relevant issues. Also, Denel SOC will continue to engage with the National Treasury directly to ensure that any misunderstanding between Denel and the National Treasury about the Denel Asia joint venture is resolved amicably.

Denel still maintains that the Asia-Pacific region is an extremely important region for Denel to expand its business and find new markets for our world-class products, especially in the fields of artillery, armoured vehicles, missiles and unmanned aerial vehicles.

Ends

For further information, contact:

Pam Malinda

Other #GuptaLeaks stories you might have missed:

1. Groomed by Guptas: How Free State Premier Ace Magashule, son Gift were caught and captured

The Gupta family has cast its net far beyond the Zuma family to use patronage to secure a steady flow of state funds into its coffers. In this exposé, the journalists at amaBhungane detail how the Guptas used travel and luxury treats to win over Ace Magashule and sons. Also having fun on at least one extravagant junket was controversial mining minister Mosebenzi Zwane. Read more.

2. Named & shamed: 10 Eskom, Transnet, Denel directors hired to help Zupta. #GuptaLeaks

The Gupta and Zuma families have been able to access state funds by securing jobs for pals across the public sector. Times Live journalists have firmed up evidence on at least 10 directors of state-owned enterprises Denel, Eskom and Transnet who have worked in Zupta interests. Read more.

3. Evil mastermind Victoria Geoghegan: How does she sleep at night? #GuptaLeaks

The story South Africans are talking about! It has taken only a few years for angelic-looking Victoria Geoghegan and her associates to help bring South Africa to its knees – all in the name of personal hubris. Bell Pottinger suggested an initial monthly fee of £100 000 (roughly R1.5m), the #Guptaleaks reveal. There is no way to put it nicely: Victoria Geoghegan represents all that is rotten with the public relations industry and public companies fuelled by short-term shareholder greed .Read more.