The Investigating Directorate of the National Prosecuting Authority is today – Friday, 4 June 2021 – executing a wide-ranging restraint order for assets belonging to the Guptas and their former associate, Iqbal Sharma.
The interim order (see below) was obtained following an ex parte application at the Bloemfontein High Court on Wednesday.
A curator has been appointed to take control of and preserve the assets pending the outcome of a criminal case against Sharma, Gupta brothers Atul and Ajay, their wives Chetali and Arti and several others, including three former Free State government officials.
If convicted, Sharma and the Guptas stand to lose the affected assets, as the National Director of Public Prosecutions will apply for a confiscation order against them to recoup the value of benefits derived from the offences and criminal activities.
In this case the alleged crime amounts to roughly R25-million but testimony before the Zondo Commission has estimated the alleged Gupta gains from State Capture to be nearly R50 000 000 000.
Assets being restrained include Islandsite Investments One Hundred and Eighty, an asset-rich company in the Gupta stable.
Islandsite, which is accused number 17 in the Free State criminal case, is one of eight Gupta-owned companies in business rescue and owns Gupta properties in Saxonwold and Constantia worth a combined R34-million.
The NPA’s freezing order, granted in terms of the Prevention of Organised Crime Act, is being executed at the affected properties.
In the case of the Guptas, the assets are mostly under the control of business rescue practitioners Kurt Knoop and Louis Klopper.
It is understood that Sharma will be served in the police holding cells in the Free State where he is being kept until his formal bail application on Monday, 7 June 2021.
The former Transnet board member faces charges of fraud and money laundering and has not been asked to plead in connection with the Free State case.
Sharma’s assets that form part of the inventory include his R12-million Sandton home owned through a United Arab Emirates-registered company, Issar Global, as well as moveable property worth R500,000 and a R1.3-million sectional title home in Sandton.
The Investigating Directorate has confirmed one of Sharma’s affected properties is the Johannesburg home previously featured on the TV lifestyle show Top Billing.
Court papers state that the Investigating Directorate had watched the clip featuring the property and identified some of the assets. They include granite carved statues of elements imported from India, several Persian carpets, “antique royal lounge chairs” imported from Jaipur Palace in India and which had been given to Sharma and his wife, Tarina, by the Rajah, a lounge suite from another palace in Gujarat and a collection of paintings and art works.
A press release issued by the Investigating Directorate head, Hermione Cronje, said: “The [Investigating Directorate’s] approach is to use an arsenal of tactics to address serious and complex corruption. Along with the criminal prosecution, we will make every effort to retrieve the funds intended for service delivery.”
This strike by the Investigating Directorate comes as the Guptas battle the effects of US sanctions, a fresh extradition bid from South Africa and arrest warrants that could pave the way for Interpol Red Notices. (Red Notices are usually applied for and issued for fugitives wanted for prosecution or to serve a sentence).
The Guptas, believed to be living between Dubai and India, have had mountains of legal trouble since 2016. They have also been battling a lawsuit brought by the Industrial Development Corporation in New York and another R105-million claim from the South African Revenue Service.
They have also been embroiled in multiple legal skirmishes with BRPs Knoop and Klopper who have been in control of their companies since 2018. Assets under the BRPs’ control include the Guptas’ Tegeta Resources which owns Optimum Coal Mine, Optimum Coal Terminal and the Koornfontein Mines.
This week’s restraint order coincided with the arrest of Sharma and others over the alleged scam that had sucked millions out of the Free State department of agriculture – much of the cash allegedly landing up with Gupta-linked or controlled entities.
Described as a dry run for what would ultimately become the Estina dairy scandal, the project was essentially a due diligence for the controversial project that resulted in the misappropriation of R288-million of funds meant for poor black farmers.
Sharma’s company Nulane Investments 204 was a shelf company with little or no track record when it was picked for the due diligence.
The State charges that his company outsourced the job to Deloitte for a fee of just R1.5-million – a fraction of the R24.9-million Nulane had charged the provincial department.
Sharma’s company then allegedly entered into a subcontract for the exact services (bought from Deloitte) with a UAE-based, Gupta-linked company, Gateway Limited, which ended up scoring R19-million from the deal.
The indictment in the criminal case details how money from this project moved through various entities and bank accounts – ultimately landing up with entities or bank accounts under the control of the Guptas.
Gupta brothers Atul and Rajesh are accused in the criminal case along with the Gupta-owned Islandsite Investments, which suspectedly owns about 40% of their flagship company, Oakbay Investments.
Oakbay is the only Gupta-owned company that is not in business rescue – the rest were placed into rescue following commercial insolvency caused by the decision of South Africa’s major banks to terminate all their banking facilities in South Africa.
The restraint order is a vital strike by Cronje’s team as it goes to the heart of Gupta Inc.
The Gupta family’s relationship with former president Jacob Zuma has been the subject of a drawn-out public inquiry headed by Deputy Chief Justice Raymond Zondo.
Court papers set out the State’s reasons for the restraint application and part of it demonstrates the significance of this move against the Guptas in what is likely to become a much broader case down the line.
The Investigating Directorate had gone to court to preserve Islandsite, in part because there appears to be confusion over who precisely is in charge of the various Gupta companies as the Gutpas and/or their local proxies have been fighting the BRPs for control and a Constitutional Court application by the family is pending.
“The concern is that in this interim period of uncertainty as to the control of Islandsite, assets of Islandsite may be dissipated and the risk underscores the urgency of the present application,” court papers state.
The restraint is a draft order and the case is scheduled to return to court in August when affected parties are likely to show why it should not be made final.
In the meantime, control of the assets will vest with the court-appointed curator, Dinesh Appavoo of Dredin Consulting.
Iqbal Sharma and one of his co-accused, Peter Thabethe, are scheduled to appear in court in Bloemfontein on Monday when they are expected to apply for bail. The NPA is on record about its intention to oppose bail in the case of Sharma. It is understood that he is deemed to be a flight risk. DM
This is a developing story and was updated at 3.15pm on Friday, 4 June, 2021.