The Gupta Republic: From Bruma car boot salesmen to multi-billionaires

From selling goods from the boot of their cars at Johannesburg’s Bruma Lake in the 1990s to becoming multi-billionaire businesspeople who have been linked to the hiring and firing of Cabinet ministers – the Guptas have become South Africa’s most infamous family. It’s hard to believe that there actually was a time – not long ago – when the Gupta name was virtually unrecognisable in South Africa. So, it’s only fitting then that award-winning investigative journalist Pieter-Louis Myburgh decided to explore the story of the Guptas – who originally hail from Saharanpur in India –  in his debut book titled ‘The Republic of Gupta’, published by Penguin. The publisher and author are promising that the book will delve deeper into state capture than ever before. The book will have its official launch event on May 11 but is already available at most bookstores and in e-book format. I was fortunate enough to interview Pieter-Louis Myburgh at a bustling sidewalk cafe in Parkview, Johannesburg to find out more. Take a listen…or read the transcript. – Gareth van Zyl.

Today, I am speaking to Pieter-Louis Myburgh who is an investigative reporter for News24. He’s also a previous recipient of the prestigious Taco Kuiper Award for his exposé on corruption at PRASA. Pieter-Louis has also just completed a book, titled The Republic of Gupta, which is published by Penguin. It focuses on the ever-growing role of the Guptas in South Africa. Pieter-Louis, thanks for speaking to me today.

Thanks, Gareth. Thanks for having me.

Excellent. I’m very excited to chat to you. I noticed on the weekend that there was a lot of social media activity around your book. Can you just explain to us what the premise of your book is and what exactly, you’ve written about?

Absolutely. Well, most South Africans would be aware of this infamous Gupta family whose doings have been splashed on the covers of newspapers for at least the last couple of years. I’ve taken a little bit of a broader look and as far as possible, tried to tell the entire stories of the Guptas in terms of their history in South Africa, from their arrival back in the day up until now. I’ve taken a little bit of a broader view and gone beyond merely the issues that you would have been made aware of thanks to some of the media reports of late. I took a bit of a historic view and, also, I decided to try to dig a bit deeper into some of these allegations of state capture and corruption that we have read about.

The story of the Guptas is really fascinating. We’ve all heard about how they arrived in the early nineties with barely anything and they started selling stuff out of their cars. Last year, I think Atul Gupta was named one of the top ten richest people in South Africa, according to the Sunday Times. It sparked a lot of controversy. How did they get so far in such a relatively short space of time?

It’s really an incredible ‘rags to riches’ story. I use ‘rags to riches’ quite loosely because the father had a bit of a business background back in India. They didn’t come from absolute poverty. The father was a miner/industrialist in the small town of Saharanpur where they grew up but the kind of business success they’ve achieved here in South Africa is a galaxy away from their humble roots back in India. I think you rightly pointed out that there was quite a lot of upset people when they read that Atul Gupta was suddenly worth R10bn. I think that’s what the Sunday Times rich list pegged his wealth at, and that is because the rise of the Gupta business empire and its dramatic evolution from a situation where they were selling shoes from a boot (of a car) at the Bruma Flea Market in Johannesburg back in the day, to a multi-billion rand business empire.

That genesis and the evolution of the business cannot be seen in isolation from all these stories of state capture and this very cosy (and almost predatory) relationship with the ANC government. I think that’s why people were so upset when they saw that Atul had so drastically increased his riches since he arrived in South Africa.

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Just in terms of their country of origin (India), do you know how well they were received there? Are they known at all in India or are they just mainly known in South Africa?

I think that definitely back in the day, the father, Shiv Kumar Gupta, would have been labelled as a minor industrialist, nowhere near to being on the level as the Tatas … and the big Indian players in the economy over there. I think there’s definitely quite a lot of cause for concern as to the business ties back in India as well. When these early state capture allegations started surfacing here in South Africa, some journalists (and I mention this in my book as well) here in South Africa got in touch with the press back in India and some of the business fraternity. Then it became clear there were also rumours of money laundering and shifting illicit funds back into Dubai – even back then in India, which does also raise a question as to the father and the origin of the Gupta business empire back in India and about how clean they actually were.

The Guptas seem to have their hands in every pie, don’t they, in terms of businesses in South Africa? They’ve got media interests. They’ve got mining interests. Just how far does their empire stretch? Just in terms of some of the industries: are there industries that perhaps we haven’t heard of yet, and that they’re actually involved in, for example?

It’s definitely a very diversified business portfolio, isn’t it? If you look switching from Sahara with the computers all the way to some of these companies that are involved with Denel and producing armoured vehicles. I think the much-publicised armour vehicle that was photographed at their Saxonwold Estate quite recently – that was actually produced by one of their companies: Scipio Technologies. I think there’s a broad range. There isn’t a focus on a particular industry, which is very interesting. As far as lesser-known business activities go, I think where there’s definitely cause for concern is when they become involved in transaction advisory sort of roles. If you look at the Gupta-linked companies that are also involved with Salim Essa and the work that they seem to have been doing for Transnet and companies like that… If you also consider the broader Homix situation of monies flowing out of those state-owned companies, I think that’s where are more indications of shady dealings and lesser-known Gupta business endeavours, I suppose.

More magic at jerm.co.za.

What has their strategy been? It looks quite blatant, in a way. Try to get government influence. Get a government contract. Has that been a consistent strategy?

Absolutely. It looks like it. If you track the genesis (and I also explore this in my book a bit), there was a time back in the late nineties through the mid-2000s where the Guptas absolutely targeted Cricket South Africa, of which there are definitely a couple of issues that are raised in the book that not too many people would be familiar with. For me, that is indicative of how they target a particular entity, state department, or sporting body and it definitely looks as though the modus operandi is complete control. There’s a board of a particular entity. They want people who are closely associated with them to sit on that board. We’ve seen that with Cricket South Africa. We’ve seen it with Eskom. We’ve seen it with Transnet. I just think the aspect of their dealings have most South Africans up in arms – the absolute drive to take control of an entity, whether it’s a state-owned entity or a company.

Yes. This year, there’s been a lot of drama around Tegeta as well. For some of our listeners out there, can you maybe just unpack why it has become such a controversial issue?

I think Tegeta is very controversial because I think that is the scenario where the Gupta-Zuma nexus has become the most imminent that the broader Jacob Zuma family is deriving very real financial profits from this relationship with the Gupta family. We know that Duduzane Zuma has a stake in Tegeta. We know he has shares in Tegeta at a very peculiar and very interesting in the company’s history. If you look at Zuma’s shareholding in Tegeta, that preceded these massive coal contracts they secured from Eskom. Now, there are even further indications coming out of pre-payments made to them – extension of coal contracts – even if there’s major concern over the quality of the coal they delivered to Eskom. Tegeta is just another Gupta company that raises serious concerns over the manner in which they do business with the South African government and its state-owned companies.

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Obviously, we’ve recently seen a massive Cabinet reshuffle in which people who were perceived to be opponents of the Guptas i.e. Pravin Gordhan and Mcebisi Jonas – Mcebisi Jonas of course, came out about money that he was offered by the Guptas – being side-lined and fired. Do you think that the Guptas now have more control over government positions than what they did say, 12 months ago?

Yes. I think that unless there’s some concerted effort by all of these varied individuals to drive this bizarre conspiracy against Zuma… This is what they’ve been trying to sell us. I mean, every time we heard stories about Vytjie Mentor being summoned to Saxonwold and offered a job, and Jonas and all of them – we’ve been told by the Guptas that this is just a part of this conspiracy against them. But it looks absolutely unrealistic and implausible that all of these people would band together and spin these stories about the family. I think that if you start connecting the dots and taking all of these stories into consideration, we cannot reach any other conclusion but that the Guptas have a very real and very powerful say in the appointment of senior government employees and Cabinet members. I think that’s what’s most disturbing.

The key question is: what do they hold over Number 1?

Gupta brothers

That is a very good question. I definitely think that the fact that Duduzane Zuma is sitting there in the companies and there are all these very real benefits flowing to him through the association with the Guptas is obviously, the first thing we should take into consideration. The second thing we should take into consideration is obviously, “Why does Zuma feel forced to dance to their tune?” I suppose that’s a question that they should probably start focusing more on. Personally, if I have to draw on something like that, I think the Guptas targeted Jacob Zuma very early on. There are also some references in my book. I think they, from a very early phase, they started getting them in their pocket. That’s probably a crude way of putting it but there’s a quote in my book that kind of hints at that, too. You’ll see who actually makes the quote and who actually said that he had Zuma in his pocket. It’s quite interesting. It’s one of the Guptas.

Okay. Is that a secret?

It’s not a secret anymore, but you have to buy the book. I think there’s a very real concern over why Zuma feels so inclined to dance to their tunes and I think most South Africans are making deductions about it. I think it’s becoming quite clear to a lot of people.

Obviously, to write a book about the Guptas at this stage in South Africa’s current climate and history is a very interesting thing to do. What was your level of research? Did you manage to speak to the Guptas? Were they willing to chat to you?

No, we didn’t. I didn’t speak to the Guptas. I as lucky enough to speak to quite a broad range of people who had business dealings with them back in the day. Some still have business dealings with them, possibly, without revealing too much of my sources. Some people in government have been privy to the news about state capture tactics used by the Guptas so there’s definitely been very interesting (as opposed to writing a news article on the Guptas) … I think that in book format, you’re allowed to establish and make contact with an even broader range of sources who know about the family’s dealings and people from government etcetera. I think that’s going to be the basis of my research.

It seems like the Guptas have also got quite an aggressive sort of defence in the form of organisations like Black First Land First. I happened to drive past their Saxonwold compound just the other day and I think that they had their Hindu festival there. Of course, we all know that Jacob Zuma ended up pitching up there as well. Black First Land First were there with sjamboks almost defending the Guptas.

It is incredible.

It just seems incredible that there is what looks like a militia force that’s defending them.

Of course, Andile Mngxitama from Black First Land First is going to say that it’s coincidental that they’re supporting the Guptas because all they’re doing is fighting back against this white monopoly capital onslaught against the Guptas. They’ll say that they’ll go and defend anybody who’s anti-white monopoly capital as the Guptas supposedly are. That simply hasn’t been the case. As we’ve seen, the Black First Land First movement seems to be so quick to go to the Guptas whenever there’s trouble around them. I was actually at their compound a couple of weeks ago, when the Save South African anti-Zuma protest took place across the country, and there was a small, growing group of protestors outside the house as well. Sure enough, when things started getting hot there, Black First Land First pitched up with their sjamboks again and defended the Guptas.

A protest placard depicting Atul Gupta carried by two EFF members on either side of it at a Zuma Must Fall protest in Cape Town.

It’s very interesting to see the sort of organisation that’s supposedly anti-white monopoly capital (and capital itself, I suppose). They’ve got a very left-leaning ideology but yet they’re out in support of these ‘uber’ capitalists, which are the Guptas. I mean, they can’t be described in any other way. They’re not socialists. They don’t have a social agenda with their businesses. This is pure, raw, unhindered capitalism that we’re seeing in their businesses. It’s a very odd marriage between Black First Land First and the Guptas.

How do you think the Guptas have divided the ANC, especially the lead-up to the crucial leadership race at the end of this year? We’ve already seen two camps coalescing. Ramaphosa came out over the weekend and seemingly took a swipe at the Zuptas as they call them. Is this going to have a long-term impact on the ANC, do you think?

I think it definitely will. I think the Guptas and the arrival of the Guptas within the ANC and the start of their entrance within the ANC was also the start of a split within the party that we’re going to see widening in the coming years – definitely. I think there’s a faction within the party that has a very real problem with the way in which capital of big business (such as the Guptas) have cozied up with the party. Obviously, the Guptas aren’t the only ones doing it. I think they’re probably the family/business entity/grouping that’s been the most prominent in terms of the influence they’re exerting on government. There are obviously a lot of other people who employ the same tactics but it’s definitely caused a bit of fault-line within the party. If you look at the upcoming race – the leadership race heading up to the end of the year to December (the elective conference at the end of the year), what seems to be the most prominent theme is state capture.

It’s definitely going to be a key issue, as you pointed out. Over the weekend, Ramaphosa has called for this. You will remember that last year, there was actually a directive issued by the former Public Protector to head an inquiry into the Guptas and into state capture – something that was kept quiet and was then revived by Cyril Ramaphosa over the weekend. It definitely looks like state capture is going to be the field around which the anti-Zuma camp is going to rally in the coming months.

If Ramaphosa wins at the end of this year, what do you think that will mean for the Guptas? Will it be the end of the Guptas?

It’s also sort of a parting thought in my book is that the fortunes and the fate of the Guptas are very much tied to Jacob Zuma and the Jacob Zuma faction/grouping within the ANC. I think it’s very curious, if you look at the candidate who seems to be the most likely to be put forward by the Zuma camp to follow on, is Nkosazana Dlamini-Zuma. It’s very interesting if you start looking back at her history with the Guptas. I deal with that in one or two chapters but she’s also been known to be close to the Guptas. She features in a 2011 state security agency report into the Guptas – a probe into the Guptas. You will remember there was a group of SSA officials who left the agency back in 2012 after they had a fallout with the then Intelligence Minister Siyabonga Cwele. We later found out that actually largely revolved around a probe that they did into the Guptas and their influence in the government.

Former African Union Chair Nkosazana Dlamini-Zuma

Nkosazana Dlamini-Zuma’s name featured among some of the politicians that they identified as having a curiously close relationship with the Guptas. That does raise the question: is the Saxonwold-designated person Nkosazana Dlamini-Zuma in terms of the successor of Jacob Zuma?

Yes. It raises some very concerning issues, doesn’t it?

Yes, it does.

Just looking at Bell Pottinger as well: they’ve recently excused themselves from working with the Guptas. They blamed social media attacks against them as amongst one of the reasons why they decided not to continue those services. Did you manage to find out anything about that relationship?

I didn’t focus on it too staunchly. I definitely tried to take a historic view and then draw it back into some of the state-owned entities and those kinds of issues. I do mention them, especially in the latter part of the book where we look at things like Twitter attacks and I think there’s some very real concern over Bell Pottinger’s role in the white monopoly capital narrative (or dare I call it a myth that we’ve seen in the last couple of months). Certainly, I think Bell Pottinger and the Guptas: it’s very interesting that they would actually duck out when things become too hot for them because of attacks on social media. That’s very ironic, actually, if you look at what they’ve been accused of doing in terms of orchestrating these campaigns. Things like driving white monopoly capital and driving Black First Land First, apparently. I think there was one media report on that too. It’s going to be interesting.

I think the question we should all be asking now is, “Who’s going to become the Guptas’ soldiers now that Bell Pottinger is no longer on the scene? Who’s going to be driving their dirty tricks campaigns?”

What are some of the options for the Guptas in terms of if they have to leave South Africa – if things get too hot in the kitchen here for them? There’ve obviously been many reports about how they own a multi-million Rand house in Dubai, for example, and their roots are still in Northern India. Could they uproot themselves tomorrow and still continue what they’re doing from Dubai or India?

I think they could. I think that to a large extent, they could. We spoke about the Sunday Times rich list. There’s clearly a sufficient fortune amassed to last them for a while at least. I think they’d be able to get out of the country and continue their current lifestyle for quite a couple of years. As far as continuing with the current business model: in terms of the great benefits they get from their close ties with the government (Eskom contracts, Transnet and all those kinds of things); I very much doubt that they’d be able to do that if they aren’t present in the country – not to the same extent that we’ve seen it here. I think a physical exit from the country is definitely going to coincide with an exit from their current business models and their current ties and contracts with these state-owned companies to a large extent.

I think the worst-case scenario for them (and I think that’s probably the Hollywood version of their exit out of the country) … We saw a front-page story on the City Press the other day about their armoured vehicle parked outside of their house at Saxonwold. Apparently, the newspaper also hinted at them seeing that as an option to get out of the country finally, I suppose. If there’s a scenario where people try to break down the Saxonwold gates, would they hop into the armoured vehicle, speed to Lanseria, get into their ZS-OAK Bombardier plane and fly to Dubai. We don’t know.

Or even speed to Waterkloof.

Speed to Waterkloof. Yes, that’s happened before. Could it end that dramatically? Probably not. That’s probably just a Hollywood director in me speaking but I think definitely, by looking at the events over the last couple of years and the growing pools for their business strategies to be looked at (even from some people within the ANC such as Cyril Ramaphosa), I think their time in South Africa as we know it at least, and the way they’re conducting the business… I think that is going to come to an end sooner rather than later.

Okay. Pieter-Louis, when is the book officially available? How much will it cost and where can our listeners buy it?

We’re having an official launch for it on the 11th of May. There’ll be a chat between me and Ferial Hafferjee from The Huffington Post (South Africa) and Exclusive Books in Rosebank, Johannesburg, but it’s also available at most bookstores already – most Exclusive Books and the major book retailers. It can also be bought online and as an eBook. It’s generally available.

Okay, great. Pieter-Louis, thanks a lot for chatting to me today.

Thanks, Gareth.

Great.

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