From the archives: amaBhungane & Scorpio #GuptaLeaks: The Dubai Laundromat – How millions milked from Free State government paid for Sun City wedding
- amaBhungane & Scorpio
- South Africa
- 30 Jun 2017 01:37 (South Africa)
The Guptas always denied that they were behind the infamous Vrede dairy project. Now leaked records show that public funds were laundered from the project via Dubai to pay for the family’s showcase wedding. By AMABHUNGANE and SCORPIO.
By all accounts, the 2013 Sun City nuptials of the Guptas’ niece, Vega, was a dazzling display of the family’s wealth.
Except it was not.
The #GuptaLeaks reveal that the Free State provincial government largely picked up the tab for the “event of the millennium”, as it was described by a guest, KPMG Africa then-chief executive Moses Kgosana.
“My wife and I were privileged to attend and enjoyed every moment and every occasion,” Kgosana gushed in a thank-you note to Atul Gupta. “I have never been to an event like that and probably will not because it was an event of the millennium.”
Surely, though, the long list of political and business figures attending the multi-day spectacular
Except KPMG’s Kgosana should have been.
KPMG were the auditors of the Guptas’ Linkway Trading (Pty) Ltd. This company, we shall see, played a crucial role in allowing the diversion of cash earmarked for the Free State’s Vrede dairy project to reimburse most of the wedding expenses – R30-million to be exact.
By allowing Linkway to account for the wedding as a “business expense”, KPMG further ensured that the Guptas paid zero taxes on their Free State government windfall. (See also: The Dubai Laundromat – How KPMG saw no evil at the Sun City wedding)
KPMG said this week it was normal for it to attend “client related events”.
“In this case, the wedding attendance was approved by our risk management and the accommodation costs were borne by KPMG…"
“We stand by our work
The Gupta family did not respond to our
Gupta Radical Economic Transformation, courtesy of Mosebenzi Zwane
amaBhungane first revealed in 2013 how the Free State provincial government had gifted an unknown company,
The government also promised
Mosebenzi Zwane, now South Africa's mineral resources minister and then Free State MEC for agriculture, drove the provincial government to adopt the dairy project. Vrede is
Zwane, among the Guptas’ most ardent defenders, recently claimed the #GuptaLeaks
Zwane did not respond to our
In 2013, amaBhungane established that
The #GuptaLeaks have
The Guptas’ Dubai Laundromat milks the Free State
Financial records in the #GuptaLeaks show that over a six-week period between August and September 2013,
That is, the entire R84-million second tranche transferred by the Free State government to
In a clear sign that Dubai was little more than a laundry stop, a forensic examination shows that at least three-quarters of that money
The wedding celebrations were held at Sun City over four days at the end of April and beginning of May 2013.
Three months later, on 31 July, the Guptas’ Linkway Trading, based in South Africa, presented Accurate Investments Ltd, a second Gupta-controlled shell company in the UAE, with a four-page,
The items for which Linkway invoiced Accurate ranged from R13,086 for chocolate truffles to R2.3-million for scarves, R247,848 for fireworks and R13.9-million for “event services”.
Including VAT, Linkway’s bill
As of the date of Linkway’s invoice, Accurate had a mere $15,811 in its account at Standard Chartered – a tiny fraction of the amount invoiced. But thanks to the Free State government and
This is where the laundromat started spinning. If the details are confusing, it is because they were meant to be, but it went like this:
- On 11 August 2013
Estinatransferred $1,999,975 of the Free State government’s cash to the Standard Chartered account of the Guptas’ Gateway Limited in Dubai.
- On the same
dayGateway transferred $1,600,000 of the Estinamoney to the Standard Chartered account of yet another Gupta UAE shell, Global Corporation LLC.
- The next day, 12 August, Global transferred $1,590,000 – that is the full amount it received less $10,000 – in two tranches to another Standard Chartered account: that of Accurate, the company that Linkway had invoiced for the Sun City wedding.
- That same day, Gateway itself transferred the balance of the funds it had received from
Estinaplus another $25 to round it off – $400,000 – to Accurate’s Standard Chartered account.
- The end result of this financial Three-card Monte was that the Guptas’ Accurate now held $1,990,000 of the $1,999 975 of the Free State government’s cash, which had been transferred by
Estinato Gateway the day before.
Accurate then immediately transferred $1,986,000 to Linkway’s account at the State Bank of India in Johannesburg. The wire transfer confirmation notes an invoice number identical to the one contained in Linkway’s wedding expense invoice presented to Accurate.
This 12 August payment of the Free State’s cash via Dubai, however, fell short of Linkway’s invoiced amount of $3,333,400 by $1,347,400.
Wash, rinse, repeat
And so, the Dubai laundry machines started spinning again:
- On 5 September
2013the next tranche of Free State funds arrived from Estinain Gateway’s Dubai account: $2,999,975.
- Four days later, on 9 September, Gateway transferred $1,400,000 of this cash to Accurate, which then immediately paid Linkway exactly $1,347,400 – the balance of the wedding expenses invoice.
The wedding bill, however, was not the end of the Guptas’ Free State gravy train.
Weeks later, on 23 September, a further $3.1-million of the Free State’s cash was washed and delivered to the Guptas in South Africa via Dubai.
This time, the cash flowed from
With so much of the Free State’s money ending up with the Guptas, it appears that very little ended up with actual suppliers to the project.
As we previously reported, $3,448,800 (about R34-million then) of the R84-million that was sucked from
#GuptaLeaks financial records, however, show only a tiny fraction of that – $165,610 – was transferred to Star Engineers during the course of 2013. Whether that was the full amount paid to Star remains unclear.
Back-to-back transfers like those seen in the Guptas’ Dubai accounts were obvious red flags. Indeed, Standard Chartered confirmed this week that it closed the accounts in early 2014, shortly after these transfers.
A spokesperson for the bank said: “Standard Chartered takes its responsibility to combat financial crime very seriously and is fully committed to doing business in accordance with local and international regulatory and legal requirements.”
By the time
Of that, it is now clear, the Guptas, and not the people of the Free State, were the major beneficiaries.
Amid the #GuptaLeaks revelations, Mineral Resources Minister Mosebenzi Zwane recently unveiled controversial changes to the Mining Charter. The proposed revisions seem to fit one particular family of Indian immigrants like a glove.
The Guptas started arriving in South Africa mere months before the 1994 elections.
Considering the colossal quantum of cash diverted from
Rather, he appears to have been an afterthought.
Possibly no other document in the #GuptaLeaks trove was circulated as widely, and revised so often, as the wedding’s guest list.
Yet, on the near-final guest list,
Even the Guptas’
While the fate of the mining charter revisions recently tabled by
For all his steadfast efforts to radically economically transform the Guptas, perhaps “Mosebebi” should at the very least demand pride of place at the next one. DM
Photo by Leezie via Flickr.
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