Outa spills bean on Guptas and foreign banks

A SUSPICIOUS list of financial transactions involving the Guptas have emerged following an investigation by the Organisation Undoing Tax Abuse (Outa), which could land the controversial family in deeper trouble as there is now a further push to scrutinise the family’s finances and dealings.

According to Outa’s investigation, the Bank of Baroda and the State Bank of India granted to Guptalinked businesses bonds that far exceeded the value of properties bought by their companies.

“We found that the businesses linked to the Guptas bought properties over more than a decade for a total of R245 million – more than R50m was paid in cash – but they had managed to get bonds on these properties totalling nearly R1 billion,” Outa said.

Ben Theron, Outa’s chief operating officer, said their investigation had taken two months and was based on the leaked Gupta emails and other documents from whistle-blowers.

In one instance, in 2006, the Gupta company Islandsite bought two flats in Cape Town for R2.8 million each.

“Two years later, the Bank of India provided bonds of R24m on each flat.”

Another Gupta company, Confident Concept, bought an Mpumalanga farm for R40m. A year later, the Bank of Baroda bonded the property for R426m.

Theron said while he did not want to speculate, it was difficult to believe this could have been due to oversight or an error. “It could also be as the result of misrepresentation by the Gupta family.”

Outa yesterday wrote to the registrar of banks and the Financial Intelligence Centre asking that these transactions be investigated. Outa wants the two banks, if found guilty of wrongdoing, to lose their trading licences in the country.

The Guptas are already running out of options as the country’s four major banks last year closed all accounts linked to the wealthy family and their companies. This was after they were implicated in 72 reports of suspect transactions totalling R6.8bn.

Economist Bonke Dumisa said any bank operating within the South African shores is expected to adhere to minimum banking standards.

“If what Outa is alleging is true, then what transpired there may be purely criminal and not just a question of breaching practices. The matter must be followed up and there should be consequences for any party found guilty,” said Dumisa.

The Financial Intelligence Centre confirmed receipt of Outa’s letter but refused to confirm whether it will be undertaking any probe.

Gupta family lawyer Gert van der Merwe referred The Star’s sister paper, The Mercury, to the Guptas’ spokesperson Gary Naidoo.

Naidoo’s phone and SMSes went unanswered.

The Bank of Baroda in Joburg referred all enquiries to the bank’s headquarters in Mumbai. A bank employee, who refused to give his name, said the bank had closed the Guptas’ accounts.

Meanwhile, multinational software firm SAP said it had placed its management team in SA on administrative leave pending the finalisation of an investigation. This was after revelations that the South African wing of the multinational had paid about R100m to a Gupta-linked company, allegedly as a kickback to secure state contracts, including a R100m contract at Transnet.

SAP said it will make the results of its probe public.