Canadian bank seeks to ground Gupta aircraft
Canada’s state export bank says that it went to court to ground the infamous ZS-OAK jet of the Guptas to stop the family from using it to commit crimes or flee from justice.
The Guptas could use the aircraft “to flee the country or for some other illicit purpose, for example taking money out of the country unlawfully”, Export Development Canada (EDC) said in an affidavit filed in the High Court in Johannesburg last week.
The bank was alarmed when the public tracker of the Guptas’ ZS-OAK was disconnected shortly after they were asked to confirm its whereabouts. Its last known destination was St Petersburg, Russia.
“The location of the aircraft is now completely unknown to the applicants,” EDC said.
“The switching off of the public tracker and the aircraft’s alleged movements fortify the applicant’s concern that the aircraft may be flown to various destinations to avoid detection or to destinations where it will be difficult to retrieve.”
EDC, which lent the Guptas $41m for 80% of the purchase price of the aircraft, applied for an urgent order last week to force the Guptas to return the aircraft or face having it deregistered pending the outcome of legal proceedings in the UK.
This means the Bombardier Global 6000 registered as ZS-OAK will not be able to fly legally anywhere in the world.
The South African Civil Aviation Authority said it would not oppose the urgent application to be heard on March 6.
“Once the court orders us to deregister the aircraft, we will comply with the court order,” spokesman Kabelo Ledwaba said. He said any tracking device that “related to flight operational requirements” could not be switched off.
“If they are [switched off] that would be against regulations and a concern to us that would warrant an investigation.”
Gupta lawyer Ahmed Gani said on Tuesday that his clients would be opposing the application but would not say on what grounds. He did not know where the aircraft was.
EDC wants the Gupta jet to be delivered to Lanseria International Airport or Biggin Hill Airport in the UK within 15 days of obtaining a court order.
The Financial Mail revealed in 2017 that EDC briefly grounded the aircraft in November for defaulting on payments and cancelled its loan agreement in December. Despite this the Guptas continued to use the jet to fly around the world.
EDC said the Guptas had defaulted “more than a dozen” times between October 2017 and January 2018. The Guptas still owe EDC $27m.
The court papers also reveal that ExecuJet cancelled its maintenance agreement with the Guptas in October, citing reputational risk, and EDC did not consent to another maintenance firm, Jet Aviation, replacing it.
The bank became alarmed when the National Prosecuting Authority’s Asset Forfeiture Unit obtained a preservation order against the Guptas in the Estina dairy matter “on the reasonable ground of suspicion of their secreting proceeds of crime, including through high-end corruption involving hundreds of millions of rand stolen from the South Africa fiscus”.
Some of this money reportedly went towards paying for the EDC-financed jet. This presented a “clear risk of criminal, civil and reputational sanctions” for the Guptas, the bank said. Letting them continue to use the jet represents “substantial reputational harm” to EDC.
“Prominent multinationals” such as Bell Pottinger, KPMG, HSBC and the Bank of Baroda and Bank of India that had not timeously disassociated themselves from the Guptas “have either collapsed or suffered and continue to suffer substantial and potentially irreversible reputational (and financial) damage”.
Court proceedings brought by the Helen Suzman Foundation and Magda Wierzycka implicating Westdawn and other Gupta companies in receiving corrupt payments from inflated coal contracts with Eskom also constituted a breach of the bank’s loan conditions.
The Guptas failed to notify EDC of these actions, which meant Oakbay’s “financial position has been grossly overstated, if a substantial portion of its assets have been unlawfully acquired and are liable to be reclaimed”, the affidavit by the bank’s special risks manager, Brian Craig, reads.
The Canadian bank brought the application to ensure it wasn’t “implicated in any illicit or illegal usages”.
IF THEY ARE [SWITCHED OFF] THAT WOULD … WARRANT AN INVESTIGATION