South Africa, SCORPIO

Scorpio: Gupta Inc – It’s game on as fightback begins

By Jessica Bezuidenhout 20 February 2018

The Gupta empire has launched an audacious fightback against the National Prosecuting Authority – this as big brother Ajay finds himself confined to life in the shadows as an official fugitive from justice. By JESSICA BEZUIDENHOUT for SCORPIO.

In the quest to hang onto their alleged ill-gotten gains, the Guptas have taken the fight to the National Prosecuting Authority – and in the process, they revealed that the Bank of Baroda has also brought an urgent application against the state.

The Gupta companies are daring the prosecuting authority to produce matching bank statements as proof that some of the R220-million allegedly misappropriated from a Free State government Estina diary project in fact landed up with them.

Six of the Gupta empire’s most important companies are challenging a preservation order obtained by the the Asset Forfeiture Unit of the National Prosecuting Authority last month – this as big brother Ajay is on the run and uncertainty prevails over exactly who the Hawks are still hunting for.

Daily Maverick has confirmed that Aerohaven Trading, Oakbay Investments, Westdawn Investments, Islandsite Investments 180, Annex Distribution and Linkway Trading on 8 February filed a joint legal challenge of the preservation order granted by the High Court in Bloemfontein.

The directors of these companies previously included former President Jacob Zuma’s son, Duduzane, Atul Gupta and his wife, Chetali, his brother Rajesh (Tony), known lieutenant Ashok Narayan as well as a nephew, Varun Gupta, and Nazeem Howa, both of whom appeared in court in Bloemfontein on 15 February.

Linkway and Oakbay are two of the companies caught up in the accounting scandal that has tarnished global firm KPMG for allegedly allowing them to pass off expenses for a controversial 2013 Sun City wedding of one of the Gupta children as business-related moneys spent.

The multi-day wedding celebrations of Vega Gupta and Aakash Garg Jaharghia sparked an outcry after their wedding guests were allowed to land at the Waterkloof Air Force base, a national key point.

Attempts to reach attorneys acting for the Guptas companies in Bloemfontein and Pretoria on Monday were unsuccessful.

The application challenging the Bloemfontein court order was filed on the same day that Atul Gupta, possibly a suspect in the Estina dairy criminal case, signed off on his affidavit from far-away Dubai.

In his affidavit filed separately from the company application, Atul Gupta argues that the state did not provide the court with evidence to show that he received money that originated from various Estina bank accounts. Instead, the state had scrutinised three different Estina bank accounts and dealt with moneys flowing from there to various companies and individuals. Atul Gupta, in the affidavit, included details of a R10-million electronic transfer via a Bank of Baroda account, but says the state did not provide evidence that such an account was held or operated by him.

In what she described as a “hastily” prepared affidavit, the acting CEO of Oakbay, Ronica Ragavan, states that it is an application “for the reconsideration of property and seizure order granted on January 18”. They seek to have the order set aside and for the state to pay costs.

The initial order, granted in terms of the Prevention of Organised Crime Act, was based on the state’s contention that moneys meant for p0or black farmers had ended up with individuals and the various Gupta companies.

The state, in its application, argued that R10-million of that money landed up in an account linked to Atul Gupa, R21.2-million with Aerohaven, R24.5-million with Oakbay, R5-million with Islandsite and R6-million each with Islandsite, Westdawn and Annex Distribution.

Several other companies and individuals in the Gupta stable were alleged to have received additional amounts. It is unclear whether an additional legal challenge is pending in that regard.

Those transfers, the state argued during last month’s ex parte application, had been the proceeds of crime. In a move that coincided with the recall of former president Jacob Zuma, the NPA also initiated the first State Capture prosecution emanating from the Estina dairy case.

Ragavan is currently out on bail of R200,000 after being arrested along with seven others for her alleged role in the misappropriation of state funds that was meant to benefit poor black farmers in the Free State.

Her argument suggests that the Guptas believe the state was boxing blind, that it did not have access to the recipient bank accounts and as such had failed to make a case in respect of the companies cited in this application.

Ragavan states that the prosecuting authority had not substantiated its case by failing to produce a single bank statement to support its case that the six Gupta companies had received some of the proceeds of crime and had “misled” the court in respect of evidence presented in order to obtain the court order.

And, she argues, in some cases, the Gupta-linked companies had no knowledge of certain bank accounts cited in the initial application by the Asset Forfeiture Unit.

Regarding the Oakbay Absa account, I wish to state that Oakbay currently holds no Absa account.”

It is unclear from the court papers whether this may have been one of the accounts previously closed by Absa bank or whether Oakbay has never held an account with the bank, one of the four majors that shut down Gupta accounts in 2016.

Ragavan claimed that there were at least three other bank accounts referred to in the state’s papers which the Gupta companies “do not currently” hold.

She said the state, in its initial application, had only partially dealt with the flow of funds and had failed, or rather was “unable”, to demonstrate that the money landed up with the various Gupta companies.

She said the state had had a duty to present all material facts to the initial court during its application for the preservation order and that the non-disclosure or “suppression of facts” need not have been wilful to incur the “penalty of rescission”.

In her affidavit, Ragavan said she had “been advised that the Bank of Baroda has brought an urgent application against the NPA”.

Ragavan then refers to an affidavit by the Bank’s CEO, Manoj Kumar Jha, a copy of which Daily Maverick was not able to obtain on Monday. However, Ragavan refers to an extract of an Estina transactional account held at the Bank of Baroda, which presumably backs the case of the Gupta companies.

When everything is considered, Ragavan argued, the Asset Forfeiture Unit’s application was an “abuse of court process” that must be met with a punitive cost order.

Despite a brief political battle to keep open their bank accounts when the four major banks shut them out in 2016, this case marks the first instance of the Guptas taking on law enforcement authorities since the State Capture scandal engulfed their empire.

They are currently battling their lone banker, the Bank of Baroda, after it too terminated their accounts last year.

Baroda last week announced its intention to exit South Africa – more than 20 of the Gupta companies brought a High Court challenge in an effort to force the tiny bank to keep open their accounts last year. The case is pending but Baroda, in its response, had in devastating detail explained why it could no longer afford to operate the Gupta accounts. Baroda said it had flagged in excess of R4-billion in suspicious transactions to the Financial Intelligence Centre across Gupta company accounts for the period September 2016 to July 2017.

The latest application against the National Prosecuting Authority is scheduled to be heard on 1 March. DM


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