Revealed! How Gupta brothers cut Gautam Adani, one of India’s richest, into Denel raid – #GuptaLeaks

EDINBURGH — The Gupta family cut one of India’s richest businessmen into a controversial Denel ‘state capture’ deal, according to the journalists working through the #GuptaLeaks. Although the Adani Group in India has denied involvement in business deals with the Gupta family through the Indian media, amaBhungane journalists say they have uncovered correspondence linking the Gupta and Adani families. The Guptas, together with Denel officials, developed a structure to take the biggest stake of a Denel entity for themselves and the Adani family, reports amaBhungane. – Jackie Cameron

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

Staff Writer

The Gupta family is at the centre of democratic South Africa’s worst political scandal, but its tentacles run way beyond the country’s borders.

Leaked emails from the heart of the Gupta business empire allegedly show that they are business partners with Gautam Adani, one of India’s richest businessmen. The Gupta clique cut him into a deal to grab a big chunk of intellectual property belonging to South African state arms manufacturer Denel.

Gautam Adani was listed as India’s 13th richest person in 2016 by Forbes, which estimates his wealth at over $6bn. Adani was allegedly introduced to the Gupta family through wealthy Kolkata businessman Parasmal Lodha who is on trial in India in connection with moneylaundering. 

Gupta links to Adani and Lodha have been exposed as journalists with amaBhungane sort through the #GuptaLeaks.

Gautam Adani
Gautam Adani, pictured on an Indian media website.

The amaBhungane team has pieced together the relationship between the Gupta and Adani families as it works on solving the mystery behind Denel Asia, the controversial arms marketing partnership that national treasury has tried to block.

Among the amaBhungane findings:

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 powerful Indian tycoon Gautam Adani – close to Prime Minister Narendra Modi – for his “influence”.

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%).

“The Gupta family set themselves up to sell state arms manufacturer Denel’s weapons to India in a deal involving a shady Indian fixer and a powerful tycoon close to prime minister Narendra Modi,” reports amaBhungane.

“The Guptas arranged to sideline Denel and take the biggest share for themselves even though it was Denel’s proprietary technology that was to be sold.”

The capture of Denel assets: Step-by-step

“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,” notes amaBhungane.

“Defending themselves against criticism at the time, Denel and the Guptas claimed that the Gupta family had no interest in the Essa company, VR Laser Asia, and by implication in Denel Asia.”

But, the #GuptaLeaks show they were misleading South Africans. “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,” say the amaBhungane team.

Carving up Denel between Gupta, Gautam Adani families

The #GuptaLeaks contain correspondence 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”.

The #GuptaLeaks, says amaBhungane, 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%);
  • Denel’s participation was to be diluted significantly;
  • Denel executives were well aware the company would enjoy only a minority stake in the Indian venture;
  • Adani was key to the plan;
  • Lodha emailed Tony Gupta in 2013, asking him to invite Gautam Adani, among “a few friends”, to the wedding of Anil Gupta’s son;
  • In 2015, as the Guptas were assembling their partnership with Denel and Adani, Lodha reviewed an Adani Enterprises contract within the Denel India structure and emailed comments to Tony Gupta;
  • Lodha is very close to the Guptas. They attend each other’s family weddings and holidays and a senior Gupta manager once used contacts in the department of home affairs to arrange a South African visa for Lodha;
  • In 2015, as the Guptas were assembling their partnership with Denel and Adani, Lodha reviewed an Adani Enterprises contract within the Denel India structure and emailed comments to Tony Gupta;
  • Around the same time, Lodha twice helped to arrange for Gautam Adani to visit South Africa.
  • The Guptas pursued an intricate plan to push their Denel project through, involving inside information and the positioning of sympathetic decision-makers, including four-day finance minister Des van Rooyen;
  • Van Rooyen was removed on 13 December before he could approve Denel Asia – and the status of the joint venture has been in dispute ever since.

In one 2016 email, says amaBhungane, the CEO of Gupta-owned VR Laser in South Africa, Pieter van der Merwe, highlights the use of Adani as an influencer. He reportedly says: “We are entering into an agreement with [Adani] as a result of their name, history and connections. If it means they are going to appoint an affiliate who doesn’t have any know-how or influence, we do not need a partnership.”

Adani, Lodha and the Gupta family have not responded to requests for comment, says amaBhungane. Denel says it is leaving it to the Hawks to investigate allegations contained in the #GuptaLeaks.

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 taking legal action against the treasury and the finance minister.

Profile: Gautam Adani – billionaire, friend to Prime Minister Modi

Gautam Adani is reported to be close to Modi, the prime minister.

Much like the Guptas and President Jacob Zuma in South Africa, commentators link the rise of Adani’s business empire to the political rise of Modi, starting in the early 2000s when Adani supported Modi when he was politically weak.

Companies in the Adani group have been accused by Indian authorities of money laundering and tax avoidance to the tune of about US$750-million, says amaBhungane. 

What the Indian media says about Gautam Adani

The Economic Times: “Adani Group had exploratory discussions with Denel in 2015. However the Group was neither comfortable with the partners involved nor with the proposed proposition. Hence, the discussions were not taken forward by Adani Group,” a company spokesperson said in response to queries by ET.

The Citizen: Gautam Adani, the business magnate who is perceived to be Prime Minister Narendra Modi’s blue-eyed boy, has ambitions to become not just one of this country’s biggest tycoons but one who hopes to lead India’s biggest multinational conglomerate.

File Photo: U.S. Secretary of State John Kerry greets Gautam Adani after he arrived at Pandit Deendayal Petroleum Institute for a meeting with Indian CEOs on the sidelines of the 7th Vibrant Gujarat Summit in Gandhinagar, India, on January 11, 2014.

“Gautam Adani has indeed come a long way from the time he dropped out of college. He turns 53 this June. A quarter century ago, he had given up studying in a morning college in Mumbai to start trading in diamonds and plastics. After a successful stint as a diamond trader, he moved to Gujarat’s capital Ahmedabad in 1981 to help start a cousin’s firm to trade in poly-vinyl chloride (PVC).

“He set up a commodities trading venture in 1988 under Adani Exports, and was successful enough to start hitting the headlines of business papers in his home state. By the mid-1990s, Adani’s business successes starting attracting attention, including attention of the unwelcome kind.

“Eighteen years ago, in 1997, he was allegedly abducted by underworld don Fazl-Ur-Rehman alias ‘Fazlu Rehman’, who is currently lodged in Tihar Central Jail in New Delhi. Rehman and two of his accomplices were accused of kidnapping Adani in a car from the outskirts of Ahmedabad and subsequently released him after extorting ₹15 crore as ransom.

“Gautam Adani currently heads a group of companies which comprises India’s biggest private operator of ports as well as the country’s largest private producer of electricity. In addition, the Adani group has substantial interests in a variety of sectors: coal mining, oil and gas exploration, gas distribution, transmission and distribution of electricity, civil construction and infrastructure, multi-modal logistics, international trade, education, real estate, edible oils and food storage.

“His companies currently trade in over 30 commodities with at least 28 countries.”

“Despite Adani’s political connections, law enforcing agencies have periodically sought to initiate action against companies in his group.” These actions range from investigations into ‘over-valuing” equipment to paying bribes to facilitate exports.

About #GuptaLeaks: Journalists are slowly sifting through the information to build evidence that President Jacob Zuma and friends have embarked on a calculating, wide-ranging and self-serving strategy to unsettle the South African political landscape in order to create access to funds. A daily digest and commentaries on the most important #GuptaLeaks finds are available here on BizNews.

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