South Africa

Oppenheimers & Guptas: Into the Great Unknown

By Kevin Bloom 25 February 2017

It’s the first time in his career, says Nicky Oppenheimer, that he doesn’t know what to expect. Which is truly amazing. The former chairman of De Beers is referring to his pet project, a seven-star airport terminal at ORT International that’s bang in the crosshairs of South Africa’s newest most powerful family. Aside from the fact that it’s the latest battleground for the country’s soul, why should we care? Is this a fresh fever dream, or just the same old diamond-studded nightmare? Also, are we about to wake up? By KEVIN BLOOM

I. Taxi

History, karma, fate, destiny, full circle, etcetera—in the South African dreamscape, it doesn’t get more portentous than this.

In the recurring dream corner, the Oppenheimers, the family synonymous with the commodities conglomerate that celebrates its centenary this year. Once known as “SA Inc” for all the secondary tinder it ignited in its stoking of the primary economy, Anglo American began life as a gold mining company helmed by a German Jewish immigrant with a nose for tradable gems. In 1927, with Sir Ernest now sporting a knighthood and a thriving sideline in cartel management, the company became the majority shareholder in De Beers, the diamond empire founded by arch-imperialist Cecil John Rhodes, after which it ventured into coal. The post-war years saw Anglo American expand into steel, pulp, paper, beer and the liberal English press, a period of relentless equivocation for new chairman and patriarch Harry, whose anti-apartheid heart fought a losing battle with his profit-minded head, especially when it came to cheap migrant labour…

But let’s stop there. For the purposes of this story, the perspective we need on the Oppenheimers is probably the aerial shot, which is that as twentieth-century industrialists they were pretty much run of the mill, neither entirely clean nor entirely dirty, and that while they were (and remain) the poster-boys for white monopoly capital, they never ate all the food at the table, they never made a social faux pas they couldn’t recover from (at least not after the 1930s, when Sir Ernest dropped Judaism for Anglicanism), and they never broke the law (at least not in diamond trading, where thanks to Ernest’s gift for price collusion and Harry’s friends in advertising, they were the law).

Also, as regards the Fixed-Based Operation (FBO) facility on the eastern fringe of OR Tambo International Airport, the R260-million seven-star terminal that is the setting for this oneiric tale, we should probably consider the following: Nicky Oppenheimer, grandson of Sir Ernest, son of Harry, reigning Oppenheimer paterfamilias, is a man who has every intention of bringing capital into South Africa through Fireblade Aviation (the name of said FBO). How can we be so sure? Because, at a junket for a handful of journalists hosted by Nicky and his entourage on 15 February 2017, he said something that nobody had any reason to doubt.

“Ernest once told the family,” he said, “and it’s become an Oppenheimer mantra: ‘If you’re going to start a business, it must be profitable. Otherwise, it’s a charity.’”

This is important because of what lurks in the other corner of the dreamscape.   

The Guptas, the family synonymous with the company that has little to celebrate this year, except perhaps the continued plundering of a country that many have plundered before, few with the Gupta’s chutzpah, few with the Gupta’s flair. Still known as “Zupta Inc” for its inspired family/state president shareholding structure, an arrangement that has recruited cabinet ministers and SOE chiefs and even (especially?) a weekend finance minister to its economy-gutting cause, the brothers saw in South Africa at the end of apartheid the new “America of the world”.

And the land of opportunity it soon proved to be for young Atul, whose most breathless report-backs to his father concerned the new country’s lack of red tape, and whose Cinderella moment came at a business ball in 2005, when he sat beside a very charming man. Within four years that man would be president, the Sahara computer outfit would begin its expansion into mining, energy and media, and the last of the red tape would disappear like phone call transcripts in a shredding machine. Although Zupta Inc was now up and away, it would fly somewhat under the radar until April 2013, when a chartered Airbus A330 would touch down at Waterkloof Air Force Base just outside the nation’s capital…

But again, let’s stop the history lesson there. For the purposes of this story, the perspective we need on the Guptas is probably the close-up shot, which is that they would manage to get the Indian high commissioner in South Africa to say that he had obtained special permission to land the plane, irrespective of the fact that justice minister Jeff Radebe had already distanced himself and the president from the incident, having suspended all of five (five!) high-ranking military and diplomatic personnel for the so-called security “mistake”.

Question being, what kind of dream was being dreamt for South Africa now? If the Oppenheimers were the recurring dream, the mining cartel that had stoked an entire economy at the expense of an entire race, were the Guptas then the fever dream, the nightmare? Assuming the latter, were these dreams unrelated, did the nightmare have nothing to do with the recurring dream, or did the nightmare happen because nobody cared, because we were all numb to the first dream’s message? Most important, however, given that it was all just a dream: when the fuck were we going to wake ourselves up? 

If the answers lay anywhere, they lay in the FBo facility on the eastern fringe of OR Tambo International Airport, where the Oppenheimers were leasing land from state-owned arms manufacturer Denel. In deference to these answers, then, in obeisance to the possibility that they do actually exist, we are now amply equipped to consider (to assimilate) the following: brothers Ajay, Atul and Rajesh Gupta are about to claim Fireblade Aviation for themselves.

How can we be so sure? We can’t—we’re just taking a flyer, based on the facts below.

II. Take-off

The theory was, if they built it, the people would come. Bill Gates, that is. And Bono. You know, the people. Who shouldn’t have to wait in queues like other people, where they might get noticed, harassed. “When Bono arrives at Lanseria, the whole world knows he’s there,” said Bruce Tillim, Nicky Oppenheimer’s personal assistant, to the handful of journalists gathered in the upstairs VVIP lounge. “But the public can’t get in here.”

Which, South Africa’s gini coefficient and public service protests notwithstanding, is fair enough. This terminal, with its art and gym and spa and private suites (did we mention the art?), is just how some people roll. There are thousands of FBOs out there in the universe, all of them offering the aforementioned services, plus hangar facilities and crew support and a dedicated fuel supply and even (in many cases) a mechanism for customs and immigration clearance. Hey, if Bono and Gates can’t land this weekend at an FBO in South Africa with international customs clearance, what are the chances that Bono and Gates will go to Vegas for the weekend instead (perchance to catch Noam Chomsky’s new two-hour speaking engagement and acrobatics extravaganza, the genre-busting Noam Chomsky’s Hegemony Of Wonder)?

Anyway, that was about the long and the short of the business opportunity, which was long and short in spades—the former in the sense of the mark-up you could charge on the pumping of fuel, with an airport like Lanseria taking up to R4 per litre, and the latter in the sense of the lack of competition, with Lanseria and Kruger Mpumalanga International being the only other privately-owned international airports in South Africa (meaning that in terms of private suites and spas and art and stuff, there really wasn’t any competition at all).   

And so, in early August 2012, E Oppenheimer and Son (Pty) Ltd began formal negotiations with multiple South African government departments to build an international FBO facility in the Denel precinct at OR Tambo Airport. On 3 October 2012, the Border Control Operational Coordinating Committee bought into the vision, followed later that month by Denel, who made an offer to lease. In March 2013, the first official request for customs clearance status was delivered to Naledi Pandor at home affairs, and in November 2013 the lease with Denel was signed. March 2014 saw Airports Company South Africa (ACSA) hop aboard, which was when a second request was hand-delivered to Pandor, who after a year still hadn’t replied to the first one. In May 2014, Malusi Gigaba replaced Pandor as minister; in September 2014, Fireblade Aviation became operational as an FBO for domestic arrivals and departures; in September 2014, home affairs finally acknowledged Fireblade’s requests. What did the minister need? A feasibility study, it turned out. Otherwise, everything was cool.

Except of course that it wasn’t. In a founding affidavit lodged with the North Gauteng High Court on 4 November 2016, Fireblade Aviation (the applicant) claimed that Minister Malusi Gigaba (the first respondent) “granted Fireblade’s application… for approval of an ad hoc international customs and immigration service” at a meeting between the parties on 28 January 2016. So why the court papers, then?

“Something happened, and I don’t know what it was,” said Nicky Oppenheimer. The junket had now reached its final destination, a private boardroom on the second floor, where the journalists were seated in a row as the paterfamilias—standing, flanked by his lawyers from Werksmans, his BEE partner Manne Dipico, his PA Bruce Tillim, his senior managers from Fireblade—pled his case. “Denel went from being an extremely helpful landlord to being an extremely obstructive landlord,” he said.

Obstructive? Something happened? We all knew that Oppenheimer knew exactly what had happened, and we also knew that he knew at what point. The answer was written right there in his press pack: “During the last quarter of 2015… Denel SOC formed a joint venture with VR Laser Asia.”

This, as maybe even the salmon canapés on the boardroom table knew, was the Gupta-aligned company that had captured Fireblade Aviation’s landlords. But let’s repeat the landlord’s actual name, so it doesn’t get lost in the haze: Denel. The state-owned enterprise with annual war-toy sales of R4 billion. The direct inheritor of Armscor’s apartheid-era production and research facilities, not to forget its 15,000 personnel. The creator of such distinguished and coveted household brands as the Umkhonto vertical launched air defence missile, the Mokopa tandem warhead anti-tank guided missile, the A-Darter air-to-air missile, and the G5, G6 and Gerald Bull howitzers (the longest-ranged howitzers of their class in the world).

Since September 2015, when three Denel board members (including chief executive Riaz Saloojee) were suspended due to “concerns” over Denel’s R855-million purchase of armoured vehicle manufacturer BAE Land Systems—but which was really about, according to Amabhungane, the appointment of new board chair Dan Mantsha, who’d allegedly been introduced to the Guptas by communications minister Faith Muthambi (who, although he’d been struck off the attorney’s role in 2007, had given Mantsha a job as her legal adviser)—the Guptas had been in on this action. In fact, in January 2016, around the time that Gigaba was telling Oppenheimer that he’d soon get his wish, Denel acting chief executive Zwelakhe Ntshepe “announced the formation of Denel Asia, a company in which Denel would own 51% and a Hong Kong letterbox company, VR Laser Asia, 49%.” Denel Asia’s directors, Amabhungane continued, were Ntshepe himself, Ajay Gupta’s 25-year-old son Kamal, a lawyer for several Gupta-linked companies by the name of Pieter van der Merwe, and CEO of Denel Land Systems, Stephan Burger.

Also of note were these two facts about VR Laser Asia: a) it was wholly owned by Salim Essa, a business partner of the Guptas, and b) it was an associate company of VR Laser Services, a South African heavy vehicle steel-cutting company in which Rajesh Gupta and Duduzane Zuma, the president’s son, held a stake. Further re b), Amabhungane had revealed in July 2014 that the company was linked to Iqbal Sharma, who was the chairperson of Transnet’s board tender committee, and that in the R50 billion transaction tender announced in March 2014—the “single biggest infrastructure investment initiative” ever declared in South Africa—VR Laser Services benefited handsomely as a sub-contractor.

They may not have guessed it, but the Oppenheimers were on a hiding to nothing. In March 2016, a month past the date that Gigaba had apparently promised to green-light Fireblade’s international customs and immigration service, Denel was shilling its services at India’s Defense Expo under the “Denel Asia” banner. Nicky Oppenheimer wouldn’t have cared that Salim Essa and Iqbal Sharma were hoping for big sales, but he might’ve cared that Sharma appeared to be good buddies with Gigaba, who’d tried (but failed) to get him appointed to the Transnet chairperson post in 2011. Either way, in February 2016, Denel and the Department of Home Affairs had unilaterally deemed that Fireblade didn’t have the proper security clearance to run an international customs service. Which was real weird, because in April 2016, six days after the Guptas fled South Africa on a late night flight for Dubai, a Gupta business jet tried to leave the Fireblade Aviation terminal with a box full of (wait for it) diamonds. 

Yup, South Africa the Completely Fucking Bizarre. According to Amabhungane and Business Day, the Fireblade X-ray scanners flagged the contraband inside a suitcase, a Fireblade security officer inspected the contents of the suitcase, and a Fireblade employee immediately reported the incident to OR Tambo, where ACSA and the South African Revenue Service would be responsible for the breech—the same Fireblade, to reiterate, that Denel and Gigaba, at the presumed behest of the Guptas, declared unfit “for security reasons” to run an international  customs operation.   

What were the Guptas playing at? Given that they’ve denied everything, including the Denel capture and the Transnet link and the diamond-smuggling attempt at the airport terminal run by the former chairman of De Beers, we can only speculate: they were playing at being The Winners. Did they wring some joy out of showing the Oppenheimers that there was a new first family in town? Hard to think not. Did they see in the FBO facility a business-for-the-taking that serviced a captive and glamorous market? Odds are. Was their underlying impetus the simple fact that Fireblade Aviation was the perfect platform from which to send anything—diamonds, small arms, cabinet ministers, anything—out of the country in a rush? C’mon. This was a rerun of the Waterkloof Air Force Base incident, except in reverse, and this time, since they ‘owned’ (allegedly) the company that owned the land, there would be no fake news, no questions in parliament, no nothing but a place at the front of the feeding queue until the end of the world.

“I am appalled and horrified to be part of such a thing,” said the Oppenheimer paterfamilias, once again, when the junket was coming to a close. He had said the same thing at the start of the afternoon, and we’d all known what (and whom) he had meant, even if he’d long before decided that discretion was the smarter play.         

The Guptas, them-who-would-not-be-named. Nicky Oppenheimer’s battle, he insisted, was first and foremost with Gigaba—who had since claimed that the meeting on 28 January 2016 “never happened”, that Fireblade’s minutes were a “fabrication”. As for Denel, the fourth respondent in the case (after the director general of home affairs and SARS), they would state in an answering affidavit, signed by acting CEO Zwelakhe Ntshepe on11 February 2017, the following:

“The malicious allegations [in the media] regarding Denel’s alleged associations with the Guptas and its motivations have caused reputational damage to Denel, are defamatory and are prejudicial.”

III. Landing

Nobody, it seemed, wanted anything to do with the Guptas—not even their own new state-sponsored arms company, not in public.

“We’re going nowhere,” said Oppenheimer, “our business plan is not working.” Which meant that employment for up to 200 people (as against the current 50), skills transfer from potential international partners, additional capacity for ACSA commercial business aviation, and mooted foreign direct investment off of second phase development, was all still in proposal form. Since January 2016, when Gigaba allegedly gave (and retracted) the go-ahead, Fireblade had been losing R3 million per month.

“The country is not supposed to fall this way,” offered Manny Dipico when the events for the day were done. “If something like this can happen to us, what can happen to other people?”

Asked in private to the Daily Maverick, it wasn’t entirely a rhetorical question. Still, if a partner of the Oppenheimers couldn’t answer it, neither could anyone else. The Oppenheimers, after all, were the family that had inherited—as per a famous piece of documentary journalism published in The Atlantic magazine in 1982—“the most successful cartel arrangement in the annals of modern commerce.” So successful was De Beers, noted the magazine, so immune was its product to price fluctuations caused by the vagaries of the open market, that in the late 1970s an investment in diamonds was viewed as a safeguard against recession.

The new world, then, was a place where the old-world monopolies no longer applied, where nothing was a safeguard against the finitude of the planet’s resources. Is that what the Guptas were saying when they chose to smuggle diamonds through the Oppenheimers’ airport? Was it possible they were being that sophisticated? It didn’t matter, because the message wasn’t theirs to give. The finale for all-you-can-eat capitalism wasn’t just a South African thing—all over the world, there were super-elites like the Guptas who understood that the restaurant was about to close. Politesse, propriety, noblesse oblige; those things didn’t matter to the men (almost all men, almost all fat men) who at 2am on a Monday were still hogging it out at the buffet.

Past tense. If only. From twenty years in the future, we might’ve been able to finish off like this… And then the restaurant did close, and the super-elites had nothing to eat, and for a while there we thought that we would starve too, but we were wrong, because the super-elites never fed us anyway, they only convinced us they did, and then…

Yes, and then we woke up. DM

Photo: Fireblade’s hangar.

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