Guptas face bond deals tax probe

ASUSPICIOUS list of financial transactions involving the Guptas have emerged, following an investigation by the Organisation Undoing Tax Abuse (Outa) and this 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 Gupta linked businesses bonds that far exceeded the value of properties bought by these companies.

“We found that the businesses linked to the Guptas bought properties more than a decade ago for a total of R245 million. More than R50m was paid in cash – but they managed to get bonds on these properties totalling nearly R1 billion,” Outa said.

Ben Theron, chief operations officer at Outa, said their investigation had taken two months and was based on the leaked Gupta e-mails and other documents from whistleblowers.

He expressed shock at the findings, saying many of the suspicious bonds were registered years after the properties were purchased.

In one instance in 2006, Gupta company Islandsite bought two flats in Cape Town for R2.8m each.

“Two years later the Bank of India provided bonds of R24m on each flat”.

Another Gupta company, Confident Concept, then bought an Mpumalanga farm for R40m. A year later the Bank of Baroda bonded the property for R426m.

Theron said that 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 a 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 and to cease doing business with the Guptas.

The Guptas are already running out of options as the country’s four major banks closed all accounts linked to the family and their companies last year.

This was after they were implicated in 72 reports of suspicious transactions totalling R6.8 billion.

Theron said that by taking action against the banks, Outa was closing taps on Gupta finances.

Economist Bonke Dumisa said any bank that operates within South African shores is expected to adhere to minimum banking standards.

“If whatever 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 (FIC) confirmed receipt of the Outa letter but refused to confirm whether it will be undertaking any investigation.

“Provisions in the Financial Intelligence Centre Act prevent the FIC from disclosing any information on whether matters are requested of it or not, reported to it or not, or whether they are being investigated or not,” the centre said in an e-mailed response.

Gupta family lawyer Gert van der Merwe referred The Mercury to the Gupta spokesperson, Gary Naidoo.

Attempts to reach Naidoo failed as his phone went unanswered. He also did not respond to an e-mail and an SMS.

The Bank of Baroda in Johannesburg referred all enquiries to the bank’s headquarters in Mumbai. An employee of the bank, who refused to give his name, said the bank had closed Gupta accounts.

Meanwhile, multinational software firm SAP has announced that it had placed its management team on administrative leave pending the finalisation of an investigation.

This follows revelations that the South African wing of the multinational had paid about R100m to a Gupta-linked company, allegedly as a kickback for securing state contracts including a R100m contract at Transnet.

SAP said it would make the results of its probe public once concluded.