Nowhere to hide: FBI, UK Serious Fraud Office start investigating Guptas

JOHANNESBURG — The long arm of the law is finally catching up with South Africa’s crony capitalist Guptas and their network of criminality and corruption. London’s Financial Times reports today that America’s feared Federal Bureau of Investigation (FBI) has launched a probe into the family, focusing on nephews of the Gupta brothers: Ashish and Amol Gupta. Both are US citizens which opens them to investigation and prosecution for criminality committed anywhere on earth. The FBI is investigating payments made by a Gupta-linked UAE front to the nephews’ US-based company Brookfield. The FBI is drawing on information in the Gupta Leaks emails, a copy of which is in its possession. The powers of the FBI are wide-ranging because of the all-embracing Foreign Corrupt Practices Act. There is a precedent from the Apartheid era when the FBI arrested a family member of South African hoteliers, got him to turn state witness and using his testimony as leverage to prosecute. In the meantime, news also broke today that UK authorities have been instructed by Chancellor Philip Hammond to investigate HSBC and Standard Chartered banks for facilitating Gupta money laundering. The Guptas are rapidly discovering that there is a serious downside to going global. – Gareth van Zyl

By Thulasizwe Sithole

In what could be the biggest development so far regarding the Gupta email leaks, America’s Federal Bureau of Investigation (FBI) is said to have launched a probe into the immigrant Indian family by focusing on two nephews who are US citizens.

This is according to a report in the Financial Times (FT) which refers to unnamed sources with knowledge of the matter.

To date, revelations from the Gupta email leaks have exposed how the likes of KPMG, McKinsey, SAP and Software AG have all been exposed for their links to the Guptas.

The FT, in its report, said it understands from sources that the FBI will tap the Gupta email leaks as part of its investigation. Earlier this year, South African forensic investigator Paul O’Sullivan said the contents of the leaks can be used as evidence in a court of law.

The FBI is probing whether money was laundered from the UAE to a US bank account.

“The US probe has focused in part on Ashish and Amol Gupta, who are nephews of the South African-based brothers and are US citizens, according to information in the email leaks reviewed by the Financial Times,” reported the newspaper.

“The Guptas sought to employ their nephews in South Africa in 2013, the emails show. Tax records in Texas name Ashish and Amol Gupta as directors of Brookfield Consultants Inc, a Houston-based company. Brookfield received payments to a US bank account from Accurate Investments, a United Arab Emirates company tied to the Gupta family, in 2014, according to documentation seen by the Financial Times,” the newspaper added in its report.

Pressure is growing on the Guptas as several banks and auditors in South Africa have cut ties with the family. The family has also been under intense scrutiny for their relationship with President Jacob Zuma and his son Duduzane Zuma, who is now residing in Dubai, in the UAE.

President Jacob Zuma

Meanwhile, UK authorities are also shining a spotlight on the Guptas’ business activities and financial flows as the Serious Fraud Office is set to look into HSBC and Standard Chartered’s exposure to the Guptas. This comes amid Chancellor of the Exchequer Philip Hammond agreeing with UK Labour MP Peter Hain that an investigation into the matter is required. (You can read more in the story below.)

UK urged to probe HSBC, StanChart over Gupta links, FT reports

By Darren Boey 

(Bloomberg) — The U.K. has asked financial enforcement agencies to probe possible ties between HSBC Holdings Plc and Standard Chartered Plc to South Africa’s Gupta family, the Financial Times reported.

Chancellor of the Exchequer Philip Hammond said that he had passed on concerns from Peter Hain, a former Labour cabinet minister, that the London-based banks might have handled illicit funds linked to the family via Hong Kong and Dubai, the FT said.

The Guptas are at the heart of a political scandal in South Africa over allegations that they used a friendship with President Jacob Zuma to influence state business. Zuma and the Guptas have denied any wrongdoing.

Hain did not accuse HSBC or Standard Chartered of wrongdoing but, in a letter to Hammond, said that they should review transactions due to evidence, including material from whistle-blowers, that hundreds of millions of South African rand were laundered out of the country, according to the FT.

In reply, Hammond said that he had contacted the Financial Conduct Authority, Serious Fraud Office and National Crime Agency in the U.K., the paper said.

According to the FT, the FCA said it was “already in contact with both banks named and will consider carefully further responses received.”

Spokesmen for HSBC and Standard Chartered declined to comment.

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