The world is changing fast and to keep up you need local knowledge with global context.
South Africa looks to have dodged an even bigger bullet than the R500bn smack it took over Nenegate in December. The family behind that disaster has done a midnight duck to Dubai, flying out of the country on Thursday night. The penny has yet to drop among those left to run what is sure to be a rapidly crumbling empire. Although bad publicity is being blamed for the Gupta brothers’ departure, the more likely reason is that the family’s biggest bet has gone sour – SA’s fiercely contested R1-trillion nuclear power build. The Guptas invested billions in resuscitating the old Afrikander Leases underground uranium mine, an economically flawed decision in a country where tons of uranium is generated cheaply as a by-product of deep level gold mining. Flawed, that is, unless you’re confident of a generously priced buyer for your expensive output – which a “captured” SA Government would doubtless have been. With no more Gupta urging, in the unlikely event that he survives this latest bombshell SA’s numerically challenged President Jacob Zuma is certain to become circumspect on his unrelenting promotion of the unaffordable nuclear project. That’s only part of the good news. Gupta-related skeletons are sure to now come tumbling out. Those who have engaged with the Guptas will their backbones stiffened by news of the Indian immigrant family’s departure. Not least inside Luthuli House where the ANC’s internal “tell all” investigation has already attracted many witnesses. Reverberations will be felt for months. And in many high places. – Alec Hogg
The Gupta brothers Ajay and Atul, close business associates of President Jacob Zuma and his extended family, have left South Africa.
Their departure is likely to unleash a new leadership crisis within the country’s ruling ANC which last week voted down an attempt by the opposition to impeach Zuma. The ANC’s has been to gathering evidence of how the Guptas used favours from Zuma to build a multi-billion rand empire on sweetheart public sector deals.
The investigation began through an open call on members to disclose any undue influence by the Gupta family. It was triggered after disclosures by Deputy Finance Minister Mcebisi Jonas and veteran MP Vytjie Mentor. Both say the Guptas offered them promotions into top jobs in Zuma’s cabinet provided they fulfilled certain requirements the Indian immigrant family needed to promote its business interests.
A bombshell report in this morning’s City Press newspaper, co-written by editor Ferial Haffajee and Erika Gibson, says the two elder Gupta brothers flew out in their heavily laden private jet on Thursday night. They will be joining their younger brother who already ensconsed in a luxury Dubai resort. The report says the Guptas did not inform Zuma of their departure.
We just received unverified reports that the Gupta’s were seen leaving their home in Saxonworld this morning with a big moving truck…
— Julius Sello Malema (@Julius_S_Malema) April 9, 2016
Their midnight duck came just hours after Thursday’s public resignation by Gupta family members – and Zuma’s son Duduzane – from the boards of all their South African companies.
This morning’s City Press report says: “At 11pm (on Thursday), and with a mountain of luggage loaded onto the business jet ZS-OAK, the brothers, together with one of their wives and five of their assistants, left Lanseria airport – likely for good.
“An eyewitness at the airport said they had enough luggage for 20 people. Their flight was destined to land at Al Maktoum International Airport about 37km southwest of Dubai.”
Two weeks ago Zuma undertook an official “working visit” to the UAE, but instead of engaging with the Government in Abu Dhabi, he spent time in the smaller Dubai emirate where the Guptas have now relocated.
The Presidency said the objective of the State-funded visit was “to consolidate and elevate the solid and cordial political and economic relations which exist between the respective countries.”
Zuma did not meet with his UAE counterpart, President Khalifa bin Zayed Al Nahyan. Instead, he held “official talks” with Dubai’s Sheikh Mohamed bin Rashid Al Maktoum, the small country’s Prime Minister.
At a televised Press Conference, EFF leader Julius Malema said the President’s visit to Dubai was a ruse, claiming its true purpose was for Zuma to transport bags of money for the Guptas as “he doesn’t get searched by customs.” The Presidency denied the claims, said it was reserving its legal rights, but has since not issued any formal challenge against Malema.
At the beginning of last month, Malema’s colleague Floyd Shivambu claimed the Guptas had illegally moved R2bn out of South Africa into Dubai as they were planning to relocate there.
The Gupta mothership company Oakbay Investments issued a statement saying this wrong, the family was were “definitely not leaving SA” and threatened to sue anyone publishing such “falsehoods”.
Wonder if their airplane was cleared by customs or if they declared anything? https://t.co/wrnEmnKK2m
— SousieWa (@SousieWa) April 10, 2016
A week later, operating through expensive London lawyers Schillings and an associated UK crisis communications company Bell Pottinger, the Guptas threatened legal action against Biznews over publication of stories sourced from Bloomberg and the Financial Times.
Schillings followed up this threat with a letter saying it was only threatening to sue Biznews, not the original source, because of our comment above the articles. We were tempted, but tossed their threat into the rubbish bin rather than repeating Private Eye’s famous response in the case of Arkell v Pressdram.
The Gupta business model is based almost exclusively on cultivating relationships with influential South African politicians to generate sweetheart deals with public sector enterprises.
This even included re-constituting board of directors at Eskom ahead of a controversial coal mine acquisition. Their influence was peddled at State bodies ranging from the Industrial Development Corporation through to securing mining licences and questionable deals with the SA Broadcasting Corporation. The Guptas also sold thousands of their Sahara computers into the public sector.
City Press reports that the Gupta empire has been handed over to Nazeem Howa, CEO of Oakbay. Howa was previously employed at Independent Newspapers as head of its Gauteng operations. He claimed the reason for the Gupta relocation was growing attacks on the family: “The biggest impact has been on the kids. They have been taunted at school and university. The narrative created about them is of a family that pillages and is involved in funny deals with government. ”
Earlier this month three of SA’s Big Four banks joined Absa in refusing to do business with the Gupta companies. As a result, on Thursday Howa warned employees of Gupta Media that they may not be paid at the end of the month.
This week’s Sunday Times newspaper missed the City Press scoop on the Gupta midnight duck, but provided additional evidence of the family’s “State Capture” strategy to which Zuma succumbed.
The newspaper reports that Zuma’s “Weekend Special” finance minister David van Rooyen travelled to Dubai for a meeting with the Guptas on December 20 – less than two weeks after his appointment at Treasury Gupta associates as his “chief of staff” and “advisor”. Van Rooyen’s short lived reign sparked Nenegate, which cost SA R500bn. Van Rooyen said his visit to Dubai was “private”. At the time the Guptas were also in Dubai.
#Gupta denialists and trolls are quiet this morning. Did they forget to activate international roaming before they left?
— Chris Vick (@chrisvick3) April 10, 2016
The Sunday Times added: “Van Rooyen’s counterpart at the Department of Mineral Resources, Mosebenzi Zwane, whom the Guptas are said to have had a hand in appointing, is said to have stood up embassy officials when travelling via Dubai from Zurich in December.”
Zwane was promoted in September from a junior provincial position into the important cabinet post after former Mining Minister Ngoako Ramathlodi refused to overturn a Departmental decision to close a Gupta mine on safety grounds. In an unprecedented action by a cabinet minister, Zwane joined the Guptas in Zurich to negotiate their proposed acquisition of Eskom-supplying Optimum coal mine from multinational Glencore.