South Africans have long been wondering why the Guptas were allowed to continue living lavishly and flaunting expensive weddings overseas with the taxpayers money that they extracted from their lucrative contracts with corrupt officials from the Zuma era. From their Saxonwold lair they decamped to a R445m mansion in Dubai to avoid arrest and prosecution. And now finally justice is starting to catch up with them with the decision of the US to place sanctions on the Guptas, described as “members of a significant corruption network in South Africa that had leveraged their political connections to engage in widespread corruption and bribery, capture government contracts and misappropriate state assets.” The South African Justice Department said the US was one of the seven countries they had approached for mutual legal assistance to have the Guptas extradited to face state capture allegations; the other are the UAE, China, Hong Kong, Canada and Switzerland. The former ambassador of the UK to South Africa, Lord Robin Renwick has long been a campaigner to bring the Guptas to justice and has written a book, “How to steal a country” which details the Gupta links to the Zuma kleptocracy. Speaking from London, he explained how the world would suddenly become a lot smaller place for the Guptas, now that the US has zoomed in on them and Salim Essa. – Linda van Tilburg
“It is a sad irony that the United States has imposed effective sanctions against the Guptas and Salim Essa, but no action whatever has yet been taken against them in South Africa.“
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Lord Renwick said the US authorities told him that the sanctions against the Guptas was intended “to encourage” the South African authorities do something about the Guptas and Essa. ‘Now these sanctions are really serious. Once the US Justice Department opens a case against you and the US Treasury; they never give up.” It means that any Gupta related assets or those of any of their relatives would already have been frozen in the United States. The Guptas and any member of their family could not ever visit the US again without being arrested. Lord Renwick said it also meant that no reputable bank world-wide could afford to go on doing business with the Guptas, because if they do, they could be accused of breaching American sanctions. He said no American bank could afford to do so and a number of foreign banks had faced extensive fines for breaching US sanctions. “Banks as important as HSBC and Standard Chartered… have suffered very heavy fines for allegedly circumventing US sanctions.”
“So, this means it was going to be very difficult for this awful family to go on doing any transactions whatsoever in dollars around the world including in the United Arab Emirates, which are dollar-based economies.” It meant the Guptas would be forced to deal with marginal financing entities which would think they could afford to take the risk.
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The former British ambassador to South Africa and the US said the statement of the Americans on the Guptas was as damaging as it could be and South African Justice Minister Ronald Ramola’s comments were encouraging but what he was trying to ensure was that South Africa should do the same. He said, so far no action whatsoever that he knew of had been taken against the Guptas; they still owned properties in Saxonwold in Johannesburg and he did not think any effective demands had been made for their extradition to South Africa. “They have not been charged with anything; they have certainly not been convicted of anything despite an enormous mass of evidence against them starting with the reports of former Public Protector, Thuli Madonsela and now the US Justice Department and the US Treasury.” Lord Renwick said it is important to note that the US comments were not allegations; they were conclusions.
It was not clear what the United Arab Emirates, where the Guptas had moved to, would do. He said they do not have a good record on dealing with money laundering. But it was still going to be a problem for the Gupta family because if they try to deal with any reputable banks which had any exposure to the US; those banks could be hit with penal fines. Lord Renwick said Indian banks were also going to be very careful. Any Indian bank with any business whatsoever in the US was going to be vulnerable if they did business with the Guptas.
Lord Renwick said it had been frustrating to him and South Africans to watch how the Guptas flaunt their money from “ill gotten gains” with lavish weddings including a $5m wedding in the UAE. He said if South Africa wanted to be taken seriously, there would have to be charges and convictions in due course.
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Lord Renwick said he remained positive about South Africa; the country was obviously far better off with Cyril Ramaphosa as President than the alternative which would have led to an Eskom and sovereign debt default. “Pravin Gordhan has done a great deal to try to clean up the state owned enterprises. That has made him a lot of enemies, including in ANC ranks, which was why he’s regularly attacked.” He said there were very obvious cases of people who had serious charges of corruption who were still in prominent positions and he mentioned former Minister Mosebenzi Zwane who was the head of a parliamentary committee, “unbelievably.” He said it would be nice to see more bits of government acting like Pravin Gordhan.
Investors had been seriously spooked by what happened in South Africa, he said and they had been waiting for a clean-up. “Once there are some convictions and some charges, people will start becoming more confident.” He said investors understood that the President wanted to bring back investment and so did the Finance Minister but they get contradicted from time to time by people like the present Public Protector, “who wrote an extraordinarily bad report about the Estina scam” and by the ANC secretary-general, Ace Magashule. The impressions were still that corruption was rather deeply entrenched in the ruling party.
Lord Renwick said if South Africa wanted growth; some of the economic measures suggested by Tito Mboweni were going to have to be implemented. If he continued to be thwarted, there was going to be very little growth. “Let me be clear… we all want the President to succeed, but there is going to have to be more action to give himself a chance of succeeding.”
