Chilling reminder of brazen power

I have found untapped reserves of Gupta indignation

Just as you feel you’ve reached the very outer limits of your indignation, another story emerges and suddenly you find untapped resources of that emotion. I thought I had reached Guptaindignation fatigue and assumed there was nothing more this wretched family could do to amaze me. Then I read Richard Poplak’s story on the deal the Guptas did with one of Canada’s leading multinational companies, Bombardier, which was financed by that country’s export agency, Export Development Canada (EDC).

If Guptaleaks were a board game and not a real threat to SA’S democracy and economy, the story behind the family’s purchase of a Bombardier aircraft would be fascinating. Instead it is a chilling reminder of how brazen you can be when you have a president in your pocket.

It was also a reminder of how important a role powerful global entities have played in the corruption scandals that have afflicted SA. Having aided and abetted much of it, they have the nerve to lecture us on

African corruption.

How is it possible that an agency backed by Canada’s government was so desperate to secure business for a Canadian company it chose to ignore the warning signs? It’s similar to the arrogance of the World Bank’s International Finance Corp’s decision to fund Net1 while it was in the midst of the social grant crisis.

As Poplak points out, by 2013 when negotiations about the US$41M aircraft began, the Guptas were already seen as “politically exposed individuals”. A New York-based bank refused to finance the purchase after a due diligence. EDC stepped in with funding for 80% of the costs. Then a sale and lease-back arrangement was put in place with a shell company based in Ireland, the tax-dodging capital of the world, to ensure minimum duties, tariffs and taxes on the Guptas’ spanking-new plane. The structure allowed the family to set off the cost of leasing the jet against their profits.

It is perhaps to the credit of the local business community that, apart from some sleazy politicians, the really big beneficiaries of the Gupta machinations are foreign entities. Two of Germany’s biggest (and we thought most prestigious) software firms, SAP and Software AG, have played important roles in oiling the Gupta machine.

Other big players are Mckinsey, Bank of Baroda, China South Rail and, of course, Bell Pottinger. It’s not quite what you imagine when the president talks of the need to transform the economy.

And while one is always hesitant to speak well of banks, particularly large ones, our four big banks deserve praise for dumping this toxic client. Some may say the dumping was a tad late and that international regulations gave them little choice, but at no stage was it an easy thing for them to do.

Right now the best prospect for Gupta-related local employment opportunities is for armies of lawyers and auditors to clean up the mess when the family eventually decamps.

Meanwhile, indignation with the Guptas continues to run the risk of stalling the real transformation that is needed in SA.

The really big beneficiaries of the Gupta machinations are foreign entities