Global bank told units ‘to ignore shady Gupta deals’

The UK headquarters of a global bank told its subsidiaries in Hong Kong and Dubai to ignore suspected illicit transactions involving the controversial Gupta family.

This was divulged by British peer and anti-apartheid activist Peter Hain during a speech to the UK parliament on Wednesday. He did not name the bank.

In September, Hain wrote to Chancellor of the Exchequer Philip Hammond, asking him to urge law enforcement agencies to track down about R7bn thought to have been laundered through the Guptas’ network and to ensure it was returned to SA’s Treasury.

He asked for HSBC, Standard Chartered and the Bank of Baroda to be probed.

US authorities are also investigating possible money laundering by the Guptas through relatives living in that country and Dubai.

As international authorities set their sights on the Guptas’ dealings, the net seems to be closing around them.

The Guptas have been accused, along with President Jacob Zuma and members of his family, of state capture.

The information on the UK bank was given to Hain by a whistle-blower. He told the House of Lords that he was in possession of printouts of transactions that showed alleged illegal transfers of funds made by the Guptas over the past few years from their South African accounts to accounts held in Dubai and Hong Kong.

These were sent to Hammond, with the bank’s name.

The records also showed all bank account numbers used, Hain said. “Many of the transactions are legitimate, but many certainly are not,” he said.

Hain said the illicit transactions were flagged internally as suspicious. “But I am informed that they were told from the UK headquarters to ignore it.

“That is an iniquitous breach of FCA [Financial Conduct Authority] practice, which I trust ministers would never countenance, and is an incitement to money laundering, which has self-evidently occurred in this case, and also been sanctioned by a British bank, as part of the flagrant robbery of South African taxpayers,” he said.

Hain said each originating transaction started with one bank account and then was split into a number of accounts, a couple of times, to disguise the origin. “Undoubtedly, hard questions will need to be asked of the facilitating banks, because they have aided and abetted the Gupta money laundering activities.” Hain has asked for this specific bank to be investigated for possible criminal complicity.

Business Day, which has access to a tranche of leaked Gupta business e-mails, has seen a report of cross-border transactions between numerous Gupta entities based in SA, Hong Kong, Dubai and the US.

The detailed transactions date between 2013 and 2016 and total more than R1.1bn .

The most active of the Gupta entities are Oakbay Investments, based in SA; Accurate Investments, based in Dubai; Brookfield Consultants based in the US and the Indian-based World Windows and RR Energy.

The transactions vary in size, with some as much as R320m; R230m for the purchase of two aircraft from the US — allegedly through the proceeds of crime; R128m; and R15.5m, which passed through the Bank of Baroda.

An auditing report by the Bank of Baroda’s auditors Nexia SAB&T, which has been seen by this newspaper, raised many red flags over several suspicious transactions facilitated by the bank.

None of these transactions, according to the auditors, were reported by the bank to the South African Financial Intelligence Centre.