Outa spills bean on Gup­tas and for­eign banks

The Star Early Edition - - POLITICS - BHEKI MBANJWA

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.

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