Gupta deals laid bare by solid evidence: investigator
Explosive financial records from offshore Gupta-registered companies, international banks and the Reserve Bank have blown the lid off how the family allegedly plundered a R283m Free State government investment for the Estina Dairy Farm and squirrelled the money away overseas.
Delivering evidence before the state capture inquiry yesteday, Paul Holden said the investment from the Free State provincial government had, through “a complex moneywashing scheme”, ballooned to R880m.
Holden is the director of investigations at Shadow World Investigations, a global organisation that probes cases of grand corruption and corporate malfeasance.
Estina, established as a public-private partnership with the Free State government, is linked to the Guptas through various proxies who helped the family operate it as a shell company to allegedly launder the provincial government’s investment.
Holden’s evidence included e-mails between the Guptas’ allies and Estina’s bank account records, Reserve Bank offshore transaction records and statements from HSBC, Bank of Baroda, Standard Chartered Bank and financial institutions in the United Arab Emirates (UAE).
He said the Guptas, through numerous offshore entities, had run a complex moneylaundering enterprise allegedly designed to steal the Free State government investment.
The e-mails, which were obtained by Shadow World Investigations, include spreadsheets containing data on financial ledgers, which carry information on money transfers in euros, US dollars, rand and dirhams.
The transfers, which eventually ended up in the Guptas’ Oakbay company bank accounts, were from Estina and flowed to their UAE-linked companies, Linkway Trading, Accurate Investments, Fidelity Enterprises, Global Corporation, Vargafield and Gateway Ltd, he said.
Linkway Trading financed the Guptas’ lavish wedding at Sun City in 2013.
The first payment to Estina was in June 2012.
When Holden testified about the investment ballooning to R880m, astounded commission chair, deputy chief justice Raymond Zondo, stopped testimony and said he thought the amount was far less.
“Is it really this much? This all came from the Free State government? It is quite a large amount.”
Holden responded that the money [R283m] “was washed three times [through various offshore Gupta-linked companies] in a circle to produce this amount [R880m].
“In money-laundering investigations this process is known as round-tripping, where funds are paid out of a specific bank account and then later paid back into the same account.
“This is to create the impression that the monies coming into the specific bank account are actually separate amounts.
“Through how it is washed its value increases. These increases include interest.”
He said the only portion of the R880m which was not from the Free State government was 3.9% (R35m) of the deposits.
“The rest all came from the provincial government’s coffers. ”
He said some of the transfers from Estina occurred through Hawala transfers, which were between the Guptas and alleged financial criminal enterprises in India.
Hawala, which is based on trust, is an informal method of transferring money between people without the money moving from one financial jurisdiction to another.
Holden said between 2010 and 2014 the Guptas had partnered with India’s Worlds Window Group, moving money into and out of the family’s different entities.
“Ledgers attached to e-mails show how monies were transferred between the group and the Guptas.”
Holden said the Hawala ledger was not the only ledger they had discovered which showed money flows from Estina.
Questioned extensively by the commission’s evidence leader, Matthew Chaskalson, Holden said their ledger discoveries were backed up by international bank transaction records and the Reserve Banks offshore transaction records.
“It ’ s clear that Estina was used to launder the Free State government investment through complex transactions designed to screen the money flows. ”
He said e-mails between Tony Gupta and the Guptas’ lieutenants, Ashu Chawla and Sanjay Grover, showed how the ledgers would regularly be updated.
These updates occurred on the instruction of Chawla, with Grover complying several days later.
The Excel spreadsheets, which were for their offshore entities, contained dense financial information. The ledgers are for accounts of the Guptas’ UAE-based entities.”
He said the ledgers allowed for the tracking of money into and out of the family’s entities accounts.
The ledgers were discovered in leaked Gupta e-mails, Holden said.
“There exists an incredibly important e-mail among the leaked e-mails.
“This e-mail has a document pinned to it. The document is communication between the Guptas’ staff in India and the UAE and Rajesh ‘ Tony ’ Gupta, which was sent in 2014.”
He said the document was an Excel spreadsheet which contained financial data.
“The e-mail contains a correction to ledgers which are then sent on to Tony Gupta. It gives important insight into the financial transactions.
The dates [of the transfers] are nicely recorded and include monies from Estina.”
He said Reserve Bank crossborder transactions authenticated the transfers from the Guptas’ SA companies to their offshore businesses.
“You can see payments between companies, which the Reserve Bank’s data matches.”
Holden, responding to questions from Chaskalson, said: “The ledgers’ pages make for very interesting reading in regard to the transfers to the amount of more than $3m [about R45.7m].
“One of these includes the transfer of $1.17m [about R17.8m] from Liebherr Cranes.
“Liebherr Cranes won a number of Transnet contracts.
“The money transfer is from the company to Gupta-linked companies.
“In total, the ledgers show Oakbay received $4m [about R60.9m] from various Gupta entities, which include their companies such as Linkway and Estina.”
He said until international bank records had become available, through mutual legal assistance requests by the National Prosecuting Authority, it had been difficult to prove the offshore transactions.
“We knew the transactions occurred, but could never properly confirm them.
“The evidence is solid.” —