This is how you laun­der money

Sunday Times - - FRONT PAGE - QAANITAH HUNTER [email protected]­day­

THE Gup­tas ap­pear to have laun­dered al­most half-a-bil­lion rands through In­dia’s sta­te­owned Bank of Bar­oda over 10 months.

Us­ing leaked Gupta e-mails, the Sun­day Times has pieced to­gether trans­fer re­quests from Oak­bay to Sa­hara CEO Ashu Chawla which blow the lid on how the fam­ily moved money around and out of South Africa.

Their modus operandi: break down large sums into lesser amounts and shut­tle them through a num­ber of com­pa­nies be­fore they reach the Bank of Bar­oda.

Four of South Africa’s ma­jor banks — Stan­dard, FNB, Absa and Ned­bank — closed the ac­counts of com­pa­nies con­trolled by the Gup­tas be­tween De­cem­ber 2015 and April last year.

In a sub­se­quent court case launched by then fi­nance min­is­ter Pravin Gord­han, pa­pers filed by the banks re­vealed they had feared money laun­der­ing was tak­ing place.

Gord­han asked the High Court in Pre­to­ria to de­clare he had no au­thor­ity to intervene with the banks — which the Gup­tas had pressed him to do.

Some of the trans­ac­tions de­scribed in the e-mails are among 72 trans­fers worth R6.8-bil­lion that the Fi­nan­cial In­tel­li­gence Cen­tre flagged be­cause “there had been no ap­par­ent busi­ness or law­ful pur­pose” for them.

The court is yet to rule on Gord­han’s ap­pli­ca­tion.

E-mails sent be­tween Fe­bru­ary and Novem­ber 2015 back up the sus­pi­cion of money laun­der­ing. They show a se­ries of 41 trans­ac­tions in which money moved in­ex­pli­ca­bly in and out of Gupta com­pa­nies to the Bank of Bar­oda.

The Gupta com­pa­nies at the heart of the trans­ac­tions are Oak­bay, Tegeta, Maben­gela In­vest­ments, West­dawn In­vest­ments, Is­land­site In­vest­ment, Con­fi­dent Con­cept and Aero­haven Trad­ing.

Pres­i­dent Ja­cob Zuma’s son Duduzane was a di­rec­tor of West­dawn, Maben­gela and Is­land­site at the time.

The money moved in amounts rang­ing from a few thou­sand rands up to R49-mil­lion, to­talling more than R470-mil­lion.

In some in­stances, Chawla was asked to make trans­fers of more than R1-mil­lion from Atul Gupta’s ac­count to the Bank of Bar­oda. The re­quests gave no rea­sons for the trans­fers and Chawla only re­sponded “done”.

Some of the trans­fers the e-mails re­veal in 2015 in­clude:

On March 4, R2-mil­lion was moved from Con­fi­dent to Is­land­site, then R3.5-mil­lion was sent from Is­land­site to Oak­bay and R20-mil­lion was sent from Oak­bay to the Bank of Bar­oda. On the same day, a R20-mil­lion pay­ment was made from “Com­put­ers” to Is­land­site, which trans­ferred R20-mil­lion to Oak­bay, which made a pay­ment of R17mil­lion to the Bank of Bar­oda.

On March 12, R4.5-mil­lion was trans­ferred from Oak­bay to Aero­haven, which trans­ferred R2-mil­lion to the Bank of In­dia Ocean­front and R3.1-mil­lion to the Bank of Bar­oda Ocean­front.

On July 28 there were nine trans­fers of R5-mil­lion each and one of R4-mil­lion from Con­fi­dent to the Bank of Bar­oda. On the same day, there was a R49mil­lion trans­fer from Oak­bay to Is­land­site. The same amount was then trans­ferred from Is­land­site to Con­fi­dent and then to the Bank of Bar­oda.

On Oc­to­ber 14, Is­land­site trans­ferred R11-mil­lion to Oak­bay, which sent the same amount to the Bank of Bar­oda.

On Oc­to­ber 23, R38-mil­lion was trans­ferred from Con­fi­dent to Is­land­site and then to the Bank of Bar­oda.

The pat­tern of trans­fers had “all the hall­marks of mon­ey­laun­der­ing ac­tiv­ity”, said Frans Cronje, CEO of the South African In­sti­tute of Race Re­la­tions.

“This is ab­so­lutely char­ac­ter­is­tic of highly so­phis­ti­cated money laun­der­ing where you try a num­ber of things . . . You try to break the di­rect trail be­tween your­self and the trans­ac­tion to make it more dif­fi­cult for reg­u­la­tory au­thor­i­ties to see the trans­ac­tion as it is.”

Cronje said break­ing trans­ac­tions into smaller amounts and di­vert­ing funds through a num­ber of com­pa­nies was also done to avoid tax­a­tion.

“This in­for­ma­tion cor­rob­o­rates what we thought on why the banks closed the bank ac­counts,” he said.

Sub­se­quent to the clo­sures by the banks, the fam­ily con­tin­ued bank­ing with the Bank of Bar­oda.

But in April this year, the bank was un­der pres­sure from its head­quar­ters in In­dia to ter­mi­nate its re­la­tion­ship with the fam­ily and their associated busi­nesses.

Cronje said the penalties for money laun­der­ing could be heavy fines to pos­si­ble jail time.

The Gup­tas’ at­tor­ney, Gert van der Merwe, said he had ad­vised his clients not to re­spond to me­dia in­quiries un­til the au­then­tic­ity of the e-mails had been es­tab­lished. “I’m happy to sup­port a ju­di­cial in­quiry [into al­le­ga­tions of state cap­ture]. We will par­tic­i­pate and co-op­er­ate fully and that will give me the op­por­tu­nity to rely on au­then­tic doc­u­ments.”


UN­DER A CLOUD: Lo­cal banks refuse to host ac­counts for Ajay and Atul Gupta’s com­pa­nies

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