EDINBURGH — Ajay Gupta amassed a huge fortune by facilitating corruption for Jacob Zuma and his ANC friends. His wealth grew so quickly that he was listed among South Africa’s wealthiest billionaires by 2016. According to the Sunday Times, his assets placed him in the top 10 richest people in South Africa, even trumping mining mogul Patrice Motsepe who missed the top 10 and ranked 11th at that time. The rags-to-riches tale is recounted in detail by The New York Times, which underscores how there have been two ways for ANC leaders across the country to grow rich fast: through links with wealthy white business players or by facilitating business deals for the Gupta brothers. Is Ajay Gupta angry about being accused of state capture? Not a chance: he’s angry that he can’t finish a lavish temple, that has already cost many millions, devoted to his deceased father. – Jackie Cameron
By Thulasizwe Sithole
As with other outsiders, including big corporations like KPMG, the Guptas helped undermine the nation’s democratic institutions, says The New York Times. What’s more, like generations of foreigners before them, they took their windfall out of Africa, moving it to Dubai and India through a maze of dubious, and at times illegal, transactions.
“They flew everywhere: across oceans in their own planes, to their own helipad here in Saharanpur, to Hindu temples in the Himalayas.
“And they became so powerful that they clashed with the Oppenheimers — the family that once owned the De Beers diamond company and the mining giant Anglo American — whose influence in South Africa had been unrivalled for a century.”
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As the Guptas brandished their power, they incited a backlash – from ordinary South Africans and “a far more powerful constituency: the white-led business establishment and its allies, both increasingly worried that the brothers were putting the country’s economic health at risk”.
The Guptas’ intimate role in steering the nation helped set off an electoral revolt that has already cost the ANC control over South Africa’s biggest cities and could jeopardise its hold on the presidency, cautions The New York Times.
“From his self-imposed exile in Dubai, Ajay Gupta, 53, the oldest brother, denies all wrongdoing. As newcomers to South Africa, he said, he and his brothers have been turned into scapegoats,” says the news organisation.
Ajay tells The New York Times that the Gupta brothers “face no criminal charges in South Africa” and that their family empire is now bankrupt.
Nothing angers Ajay Gupta more than a temple built in Saharanpur to honour Shiv Kumar Gupta, who inspired his three sons to leave India to seek their fortunes, he tells the respected media outlet.
“Far more than a gift to their hometown and a testament to their humble beginnings, the $28 million Shivadham Temple is now being investigated by the Indian authorities as the cornerstone of an elaborate scheme to launder ‘illicit money’ from the Gupta fortune in South Africa,” points out The New York Times.
“It’s a 1,000 percent lie,” Gupta said in his first extensive interview since fleeing South Africa. “I’ll kill the person and I’ll kill myself before I use a cent for this kind of a thing.”
It all started with a few shirts, says The New York Times of how the Gupta brothers built a vast fortune in only a few decades.
“The father of the Gupta brothers, Shiv Kumar Gupta, owned a tiny shop that sold government rations, or subsidized food, here in Saharanpur. He was a pious, somewhat idiosyncratic man, who tossed bread to stray dogs from the basket of his bicycle on his way to the old temple every day, and he often spent nights meditating in its crematory.
“But he nurtured grand ambitions. One day, Mr. Gupta called over his oldest son, Ajay, to recount a newspaper article on the war between Iran and Iraq. The price of rice had skyrocketed there because, he told his son, all the traders had left the countries.
“But somebody is going in,” Ajay recalled his father saying. “He’s getting this advantage because there’s no competition.”
In the 1980s, few people in Saharanpur left to seek their fortunes in places like China, Russia or South Africa. Most went to big cities like New Delhi, or to Britain or Canada, says the US media outlet.
“But to people who knew the family, the father’s mind-set reflected that of the family’s caste, the Banias, or traders. The brothers spoke proudly of their background, explaining why they were such good businessmen.
“So Ajay, who had already set up a computer import business in New Delhi, followed his father’s advice and went looking for opportunities in Russia, China and Singapore.
“The middle brother, Atul, went to South Africa in 1993, right before it became a democracy. He kept going back, despite his family’s misgivings.”
“He alone was the bullish one,” Ajay tells The New York Times. “He loved the place.”
Atul settled in Johannesburg and sold shoes downtown before starting Sahara, which imported computer parts and assembled them. “And by chance, he made a personal connection to the ANC. He met a South African of Indian origin in New Delhi: Essop Pahad, the right-hand man of Thabo Mbeki, who was then Mr. Mandela’s deputy.”
In an interview, Pahad “recalled that he had ordered some tailor-made Nehru-style shirts. But he had to return to South Africa before they were ready. Atul volunteered to pick them up and personally deliver them to Mr. Pahad’s office in Johannesburg. After that, they ran into each other at functions at the Indian consulate”.
When Pahad finally met Ajay, he was “immediately impressed”. Ajay got the big picture in South Africa, and seemed to understand that there was a place in it for the Guptas, says The New York Times.
“In fact, the opening was vast, and Ajay exploited it masterfully. In the late 1990s, as Mr. Mbeki prepared to become president, the ANC government was worried about the enduring power of white South African businessmen and dependence on Western nations. Forging ties with countries like India and China could lessen their influence, Mr. Pahad said.
“Black South Africans had gained political power. But the white business elite, led by officials at Anglo American, had protected its own interests in the new South Africa,” it notes.
Only a few years after settling in South Africa, Ajay had forged links to the highest levels of the ANC, thanks to his friendship with Pahad.
“Mr. Pahad said that he had appointed Ajay to the group to help build ties to India, but that he had asked nothing of the brothers. After leaving government, however, Mr. Pahad acknowledged receiving favors from the family, including a loan of about $140,000 for a house, seats on the boards of two Gupta companies and help in starting a magazine.”
As the brothers’ ties to the ANC strengthened, their businesses began flourishing, says The New York Times.
“In the early 2000s, they got their first big break: They won a large government contract to set up computer laboratories in schools in the nation’s richest province.
“Then they went on a buying spree, acquiring a struggling information technology company that helped them become one of the biggest computer distributors in South Africa.
“They later bought a uranium mine, a steel manufacturer and other businesses.”
The Guptas hired or became business partners with the sons of powerful ANC politicians, like Zuma’s son Duduzane, and Tshepiso Magashule, the son of Ace Magashule, the party’s current secretary general.
“It fell to the youngest of the Gupta brothers — the friendly and easygoing Rajesh, nicknamed Tony — to keep the sons happy. They went to nightclubs together and hung out in the family’s compound in Johannesburg.
“The politicians’ sons flew first class to Dubai and India, staying in the best rooms at high-end hotels, all at the Guptas’ expense, according to emails from a Gupta-owned company leaked to South African news organizations and examined by The Times. One December, they joined the Gupta family on an extended vacation to Delhi, Dubai, New York and Venice, the emails show.”
As the Gupta brothers prospered, they flaunted it, continues The New York Times.
They enlisted a top Bollywood actor, Anil Kapoor, to produce a 2007 movie they financed, “Gandhi, My Father,” touching on Gandhi’s time in South Africa. Both Nelson Mandela and Thabo Mbeki publicly showered the Guptas with praise, says The New York Times.
“In Saharanpur, the brothers invited 2,000 guests for the groundbreaking of the temple in their father’s memory. Among the big names was a close family friend, Baba Ramdev, the most powerful guru in India, often credited with helping bring Prime Minister Narendra Modi to power.”
Two events — related to planes — contributed to their undoing, is The New York Times reading of the fall-from-grace of the Gupta brothers.
“In 2013, the brothers chartered a plane with about 200 guests from India to attend the extravagant wedding of a niece in Sun City, South Africa’s Las Vegas. They invited relatives, friends, businessmen and politicians, mostly from India.”
But the brothers miscalculated, says The New York Times. “Using their political connections, they landed the plane near Sun City — at a military base. Its use by a private family set off a government inquiry, turning the Guptas into a favourite target of opposition politicians eager to expose corruption under Mr. Zuma.”
Another drama pitted them against the Oppenheimers, the family dynasty that had been South Africa’s most powerful for a century.
“The Oppenheimers had sold their shares in Anglo American and De Beers for billions. The heirs to the fortune — Nicky Oppenheimer and his son Jonathan, both passionate aviators — opened an ultraluxury private terminal in Johannesburg’s main airport in 2014, with fine dining and a gallery with art for sale.
“But the Oppenheimers couldn’t get permission to handle international flights. Despite countless letters and calls to ANC officials, the Oppenheimers were getting nowhere.
“Eventually, they sued the government, accusing the Guptas of using their political influence to stall the business. The brothers, the Oppenheimers said, wanted in on the terminal.”
According to court documents, the Guptas sent a message to the Oppenheimers that they had “the wrong BEE partner” — referring to the Black Economic Empowerment program. If the Oppenheimers chose a partner endorsed by the Guptas, the documents said, their “problems would go away.”
The last straw was the appointment of Des van Rooyen, an “unknown lawmaker”, as finance minister.
Alarmed, the business establishment and its ANC allies struck back, forcing Mr. Zuma to remove the “weekend special” minister after only four days.
“Within weeks, a major South African bank cut ties with the Gupta family. The country’s other big banks followed. With the Guptas increasingly shut out of South Africa’s economy, an Indian bank handed them a lifeline.
“For more than a decade, the Guptas had fostered relations with the South African branch of the Bank of Baroda, India’s second-biggest national bank.
“When the bank’s chief executive in South Africa asked for an internship for his son, the family obliged and even sent a round-trip ticket, according to the Gupta company emails. When the bank’s employees needed help getting work visas from the South Africa bureaucracy, the Guptas obliged.
“After South Africa’s banks cut ties with the Guptas, Baroda continued to do business with the brothers. Its chief executive in South Africa issued a letter of support when the Guptas moved to buy the coal mine from Glencore — without telling his superiors in India.”
An investigation by the South African Reserve Bank, the nation’s central bank, found that Baroda’s internal systems had flagged about 4,000 suspicious transactions in the Guptas’ accounts, The New York Times tells its readers. “Employees dismissed nearly all of the alerts ‘without adequate reasons being provided,’ according to a confidential report by PwC, the international auditing firm, that was reviewed by The Times.
“Baroda announced this year that it would leave South Africa, but said the decision was unrelated to the Guptas.”
Back to Saharanpur, where questions have also emerged around the family’s temple. “A separate series of complicated bank transfers — intended, experts say, to hide the source of the money — was financing the construction, according to the Gupta company emails.
“Pressure from South Africa drove the Indian authorities to investigate. Officials raided the Guptas’ properties in Saharanpur, saying they had information that the family had brought ‘illicit money; to India.”
The Gupta empire was getting squeezed, points out The New York Times. “Locked out of banks, the brothers could not pay their employees or debts. Their only public company was delisted from the Johannesburg stock exchange. South African companies, big and small, refused to do business with them.”
Cornered, they sold a mining company and their media empire in quick succession. Many of their remaining companies filed for bankruptcy protection and are now managed by outside supervisors, says the report.
South Africans, predicting the end of the Guptas, began tracking the family’s prized Bombardier Global 6000 jet as it traveled to Dubai, Russia, Switzerland and elsewhere.
On Feb. 4, the Guptas turned off the jet’s GPS tracking device, according to Canada’s export credit agency, which had lent the Guptas $41 million to buy the Bombardier. The agency sued to get the plane back, saying the Guptas might use it “to escape justice.”
In fact, most of the family and their private jet were already in India for a wedding, Ajay said.
And on Feb. 6, as the battle in the ANC raged, Ajay boarded an Emirates red-eye flight to Dubai, airport officials later confirmed.
“On his last flight out, Ajay said, he kept to his normal routine, avoiding meals and movies. He closed his eyes and drifted off. Outside it was cloudy and windy. The plane banked north and flew up the continent’s eastern coast, taking him out of Africa,” adds The New York Times.
