Is this the end of the Guptas’ wild ride?

OUT of farce comes tragedy. Young Duduzane Zuma, the handsome, self-effacing son of the president, is swept into the arms of a business family that befriends his father.

He makes partner in a mining venture that promises vast wealth should South Africa order 9 600MW of nuclear power generating capacity from Russia.

But too late. Jacob Zuma has been neglectful. He has ignored instructions from the public protector to repay public funds to upgrade nonsecurity aspects of his large rural home. Under pressure in court, he finally admits he is wrong. There is political uproar but although he survives initially, his son is left exposed, accused, along with the family that has attached itself to him, the Guptas, of profiting from his obvious political connections.

And as Jacob, the father, becomes mired in an existential political crisis, with calls from deep within his own political home for his resignation, the first victim is his own son. On Friday, in an announcement that shocks the nation, Duduzane says he is “exiting” all his investments in the Gupta business, Oakbay Resources.

This includes a Gupta-funded stake in a new mining company combining uranium and coal mines, which might once have been used to feed power generation of base load to the country and thus secure a family that had risen from poverty to the very top.

I feel genuinely sorry for him. But it was always absurd to believe you could, in a functioning democracy, do business in an area over which your father has the political power to award licences, tenders, access and favours. If his is a genuine break with the Guptas, it resets the relationship between the families from the disgraceful to the merely awful.

Perhaps I am naïve. The Guptas, who at the same time as Duduzane’s Friday announcement said the two brothers on the board of the listed family company, Oakbay, would resign their directorships, are in many ways an admirable family. Close-knit, protective of their mother and gloriously gaudy, they have, however, completely misread this country’s conservatism. No, landing a planeful of guests for a family wedding at a national key point was not okay. Neither is running a national newspaper with an oversupply of state advertising. Nor is funding the president’s son in order to do business with his father’s government.

Whether or not Friday’s announcements mark the beginning of the end of the Guptas’ wild, 23-year ride in South Africa is hard to say. I would not bet on it. The first order of the day on Friday would have been to save the president, closely followed by the pressing need to save their own investments. The Guptas and Duduzane are committed to paying R2.1-billion to a group of banks, including Nedbank and Investec, in order to buy the Optimum coal mine, which supplies Eskom’s Hendrina power station in Mpumalanga.

Finding that money has been made almost impossible since Deputy Finance Minister Mcebisi Jonas avowed that the Guptas had secretly offered him the top Treasury job shortly before the president fired finance minister Nhlanhla Nene last December. That set off a firestorm in which the currency and the market valuations of all the country’s big banks went into a precipitous decline.

The result has been shattering. Zuma has been politically weakened, perhaps fatally, and Nene was eventually replaced by former finance minister Pravin Gordhan, who has firmly set his face against the Guptas’ involvement in and with the state.

Worse, some big banks, still smarting from their losses after Nene’s sacking, have closed Gupta accounts as evidence of the family’s interference in government has mounted. Their auditor, KPMG, has abandoned them, as has their stock exchange sponsor, putting the Oakbay JSE listing in jeopardy.

And even though they may have resigned their directorships, the Guptas are still Oakbay’s owners. It is not something you just walk away from. Assuming rumours are true and they do intend leaving the country, most of the businesses they have built will have to survive. There are debts to pay and covenants to honour.

Perhaps their local managers can do that for them. If they do go, it will mean the nuclear deal is dead. That would open the way for Jacob Zuma to negotiate a graceful retirement with full benefits and full pardon for any transgressions of the law on his back. That might all be a fairytale, though. This could still get very ugly.

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