Com­pa­nies im­pli­cated in hav­ing been in bed with the Gup­tas

The Star Early Edition - - BUSINESS REPORT - Wes­ley Diphoko

NO ONE HAS been left un­touched by the #Gup­taLeaks.

While govern­ment en­ti­ties are known, cor­po­rates so far have been been left un­touched.

How­ever, the re­cent e-mails have im­pli­cated some of the com­pa­nies on a num­ber of oc­ca­sions. The fol­low­ing are re­spected cor­po­rates that are known to have been in bed with the Gup­tas:


SAP is the world’s largest busi­ness soft­ware com­pany – founded in 1972 and head­quar­tered in Wall­dorf, Ger­many. The soft­ware gi­ant pro­vides soft­ware sys­tems to multi­na­tional cor­po­ra­tions and gov­ern­ments.

SAP is be­hind ev­ery en­tity that seeks to run its busi­ness ef­fi­ciently. Transnet is one of those en­ti­ties. Re­cent re­ports have re­vealed that to clinch Transnet busi­ness, busi­ness soft­ware gi­ant SAP agreed to pay “10 per­cent sales com­mis­sion” to a com­pany con­trolled by the Gup­tas. The ev­i­dence sug­gests that the com­pany – a lit­tle-known out­post of the Gupta em­pire – was de­lib­er­ately in­ter­posed to ob­scure Gupta in­volve­ment and to laun­der the pro­ceeds to them.


KPMG is a global net­work of in­de­pen­dent mem­ber firms of­fer­ing au­dit, tax and ad­vi­sory ser­vices.

Their mem­ber firms’ clients in­clude busi­ness cor­po­ra­tions, gov­ern­ments, pub­lic sec­tor agen­cies and not-for-profit or­gan­i­sa­tions.

KPMG is trusted for a con­sis­tent stan­dard of ser­vice based on high or­der pro­fes­sional ca­pa­bil­i­ties, in­dus­try in­sight and lo­cal knowl­edge.

Lately the re­spected global au­dit­ing firm has not lived up to its stan­dard if the re­cent re­ports are any­thing to go by. KPMG is no stranger to con­tro­versy. Its re­port was used to pur­sue Pravin Gord­han dur­ing his ten­ure as Finance Min­is­ter.

This re­port was later dis­puted and dis­missed as ir­rel­e­vant be­cause it was a draft re­port. KPMG is in the news again, due to its links with the Gup­tas. This time around for the mat­ter that re­lates to them not rais­ing con­cerns about pay­ment for wed­ding ex­penses.

Ac­cord­ing to an in­ves­ti­ga­tion con­ducted by amaBhun­gane, Linkway, a Gupta com­pany, “paid” for the wed­ding ex­penses; and was “re­im­bursed” by the sup­pos­edly un­re­lated Ac­cu­rate In­vest­ments.

KPMG of­fered no ex­pla­na­tion in Linkway’s au­dited fi­nan­cials why a sup­pos­edly un­re­lated third party in Dubai would pick up the Gup­tas’ R30 mil­lion wed­ding bill – or why a wed­ding was a bona fide busi­ness ex­pense.

The net ef­fect of this accounting sleight-of-hand is that not only was the wed­ding ef­fec­tively paid for from funds di­verted from the Free State govern­ment’s cof­fers, but the Gup­tas paid no in­come tax on this wind­fall.

This in­come was off­set against Linkway’s ex­penses, re­sult­ing in Linkway’s re­ceiv­ing zero tax­able in­come from its Free State wind­fall.


McK­in­sey is a world­wide management con­sult­ing firm that con­ducts qual­i­ta­tive and quan­ti­ta­tive analy­ses in or­der to eval­u­ate management de­ci­sions across the pub­lic and pri­vate sec­tors.

This “trusted” con­sult­ing firm has also been em­broiled in a scan­dal re­lated to the Gup­tas.

It was hired by Eskom for R1 bil­lion to im­prove ef­fi­cien­cies and cut waste­ful ex­pen­di­ture.

In­stead the deal McK­in­sey struck with Tril­lian Cap­i­tal Partners mocked Eskom’s prob­lems by hand­ing at least R266 mil­lion of Eskom’s money to a com­pany that in the words of McK­in­sey’s own ex­ec­u­tives’ was merely there to re­ceive 30 per­cent of the con­tract “in re­turn for not much work”.

In the past few days ad­vo­cate Ge­off Budlen­der re­leased his re­port into al­le­ga­tions of state cap­ture car­ried out by Tril­lian, the com­pany ma­jor­ity-owned by Gupta as­so­ciate Salim Essa.

The re­port de­tails how McK­in­sey agreed to sub­con­tract 30 per­cent of their Eskom work to Tril­lian un­der the guise of “sup­plier devel­op­ment”, a pro­gramme in­tended to up-skill small, black-owned busi­nesses.

In­stead doc­u­ments from Budlen­der’s re­port as well as in the #Gup­taLeaks show that Tril­lian planned to siphon huge chunks of the money it re­ceived to a com­pany part-owned by the Gup­tas and an­other com­pany in Dubai.

These are just some of the com­pa­nies that are known to be cham­pi­ons of cor­po­rate gov­er­nance around the world. Re­cent re­ports show that they need more scru­tiny than they are cur­rently re­ceiv­ing.

Busi­ness Re­port will be shin­ing a spot­light on busi­nesses that are abus­ing the trust of so­ci­ety.


Atul Gupta. Sev­eral com­pa­nies have been roped in by the Gupta fam­ily, ac­cord­ing to leaks.

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