Guptas used crime networks to move billions offshore

THE Guptas made use of some of the worst criminal networks, including human trafficking organised crime units, to move stolen South African state funds to offshore accounts, the state capture inquiry heard yesterday.

The Zondo Commission continued to hear money-flow related evidence from Paul Holden of London-based Shadow World Investigations.

Holden described the extraordinarily busy and complex money laundering network used by the Gupta’s as a “spider web”.

Holden testified that an “incredibly disturbing pattern” of the flow of funds had presented itself during his investigations.

The commission heard that the funds, that ultimately came from South African taxpayers, passed through the hands of people wanted for the most heinous crimes, including sexual assault, drug trafficking and murder.

Holden referred to the 2017 murder of “Steroid King” Brian Wainstein to highlight that suspects in this murder, such as Mathew Breedt, and his brother Sheldon Breedt, were associates of the Guptas. This, Holden said, ultimately underscores the criminality of the Gupta enterprise.

“It is disturbing that the funds ultimately emanating from taxpayers were transited out of South Africa via the hands of this organised crime network,” Holden said.

Holden has been asked by the Zondo Commission to describe how the four laundry networks, identified in his report, operated at the highest level. Holden said the laundries were “incredibly complicated”, but there was a certain pattern to how they operated.

At the very top level, Holden said, there was a first-level “laundry vehicle” company that received funds from state contractors.

From there, the funds were paid into what Holden called an intermediary account, or “high-level laundry vehicle”. This was done by multiple different first-level laundry entities and then sent onwards in the money laundering network.

The funds were often sent on to a further party, that further aggregated the funds, and then made those transfers onwards again.

“In most instances where we have been able to trace the funds flowing on to some sort of endpoint, the funds generally ended up offshore,” Holden said.

He referred to this in the report as an onshore/offshore bridge.

An onshore/offshore bridge is a company that receives and aggregates payments from this laundry network and then makes payments abroad into a very extended overseas network.

The vast majority of funds identified in this network enter into what Holden called the Hong Kong/China laundry network.

Hundreds of companies registered in the Hong Kong/China laundry network received money from state capture, he said, and then presumably kicked those funds out to an “eventual intended recipient”.

In his evidence, Holden said that Gupta associate Salim Essa owned Hong Kong companies that received kickbacks from China North Rail and China South Rail.

Holden’s evidence revealed how billions of rand were siphoned from the state and into Gupta-linked enterprises through the years of state capture.

While more than R49 billion has been disbursed by organs of state in expenditure tainted by state capture, the Gupta enterprise earned over R16.2bn of that money, Holden clarified yesterday.

He said this money was directly and indirectly paid to the Gupta enterprise through the years of state capture.