Blame me, not Mr Atul: Ronica Ragavan’s astonishing legal intervention to shield her Gupta boss
When trouble hits the fan, most people might say: ‘It wasn’t me.’ But most people are not Ronica Ragavan, an employee and dedicated servant of the Gupta enterprise for more than two decades.
Ronica Ragavan has filed an extraordinary affidavit before the Free State High Court in an apparent bid to shield her boss, Atul Gupta, from further legal trouble.
Ragavan says it was her, and some of her former colleagues, and not the fugitive Gupta brother who controlled an Absa bank account that is at the centre of a multimillion-rand criminal investigation.
This is an astonishing admission in light of the State’s contention that the Absa Cash Focus account was used to facilitate the laundering of money flowing from an alleged unlawful deal involving the Free State government.
Atul Gupta and brother Rajesh, along with their wives Chetali and Arti, are the subjects of Interpol Red Notice requests that were filed by South African authorities in June 2021. They are wanted in connection with a R24.9-million criminal case.
The same case saw the arrest of three former Free State government officials and former Gupta associate Iqbal Sharma and his brother-in-law, Dinesh Patel, four months ago.
Sharma was a director of Nulane Investments 204, a company that landed the alleged unlawful contract, and immediately outsourced the job to Deloitte Consulting for R1.5-million.
The bulk of the balance, R19-million, ended up with Gateway Limited, a Dubai company which the State says is associated with the Gupta enterprise.
Nulane’s subcontract with Gateway Limited, the State contends, was a carbon copy of one it had entered into with Deloitte.
This second sub-contract, the State charges, was just a way to launder cash from the Free State government to the Dubai company for the ultimate benefit of the Guptas.
Ragavan is one of the longest-serving Gupta employees and is often described as a devotee due to her perceived loyalty to the family.
She took over as acting CEO of their flagship company, Oakbay Investments, in 2016 when the family fled South Africa amid the State Capture scandal.
Ragavan’s astonishing intervention comes in the form of a 54-page affidavit handed in at the Free State High Court.
Dated 12 August 2021, it was submitted as part of the Gupta family’s efforts to stop a draft restraint order against one of their companies from being made final.
Ragavan is still in South Africa and appears to be the Guptas’ local representative in many of their court battles.
The Investigating Directorate of the National Prosecuting Authority obtained the interim restraint order against the Gupta-owned Islandsite Investments 180 in early June 2021. This was to secure assets for a confiscation order the State hopes to apply for in the event of a successful prosecution.
The Guptas had hoped to block the restraint order from being made final but hit a major stumbling block when the court recently ruled that Ragavan, a director of Islandsite, did not have the power to act on behalf of the company.
This is because Islandsite is in business rescue and under the legal control of BR practitioners Kurt Knoop and Louis Klopper.
The restraint case is scheduled to return to court in November, although it is unclear at this stage what the Gupta family’s options are now that Ragavan may not litigate on its behalf.
The criminal case, in terms of which the restraint application was brought, is scheduled to return to the Bloemfontein Magistrate’s Court on Tuesday, 28 September.
‘Islandsite, a central reservoir of cash’
The State says the money scored from the Free State government was transferred back and forth between Sharma’s company, Nulane, and several other companies, without any apparent legitimate business purpose and in a convoluted series of transactions.
Atul Gupta controlled two of those companies, according to an affidavit filed by Hermione Cronje, head of the Investigating Directorate, in support of the State’s application for the restraint order.
Protesting the Gupta brother’s innocence, Ragavan provides a lengthy explanation of how the Gupta money machine functioned, in an attempt to justify the cash transfers as loans being dispensed or repaid.
Ragavan essentially sought to dismiss the State’s attempt to link the Guptas to criminality in this case, saying Islandsite had no business whatsoever with the Free State Department of Rural Development and Agriculture.
The company, says Ragavan, is not implicated with regard to the alleged fraudulent contract Nulane landed a decade ago.
“Rather, the NPA seeks to draw the inference that the fraud alleged to have been committed by Nulane, acting in concert with various officials employed by the Free State government, was for the ultimate benefit of the shareholders of Islandsite.”
Ragavan sets out the workings of the Gupta enterprise’s financial operation, partly to explain the “innocence” of both Islandsite and Atul Gupta.
She says the Absa bank account operated as a Sahara Computers Cash Focus account which allowed the account holder to link third party accounts to it.
- Both Islandsite and another company, Pragat Investments, were linked like this to be controlled on behalf of Sahara. Pragat received substantial payments from Nulane through this Gupta financial system.
- Sahara’s directors had in 2008 authorised Atul Gupta to sign all documents relevant to electronic banking on behalf of Sahara.
- Atul Gupta was nominated as the system manager for Sahara’s Cash Focus account and completed certain password request forms in the years 2011 to 2013.
But, says Ragavan, it was the goal of the Sahara group to restrict exposure to bank charges such as overdraft interest, and to make the most intelligent use of the money generated by companies in the Sahara group.
Therefore, a “custom” had grown over a number of years to review the cash flow position of the various companies in the group and to move money between them as and when needed.
“Say company A was in relative terms flush with cash but company B was short of cash, there would be a transfer of cash between those two companies.”
Ultimately the executive employees, like herself, says Ragavan, developed a process where money would be channelled to Islandsite as a loan and Islandsite would in turn lend it to a related or sister company.
‘Incorrect’ to hold Atul Gupta responsible
When the money became payable, it would then be repaid to Islandsite.
“Prime lending rate interest was charged on inter-company loans. It is therefore so that there was a tremendous amount of money going in and out of Islandsite’s accounts as it played the role of anchor-company for the distribution of cash flow needs between the various companies.”
Ragavan says it’s “incorrect” to hold Atul Gupta responsible for moving the money around in the Cash Focus account as he did not approve any of the transactions raised by the State in the current case.
Ragavan maintains that she was the financial manager of Islandsite and, therefore, has direct knowledge of all the relevant transactions.
Meticulous records were kept of the various loans and, says Ragavan, her name “consistently” appears next to ledger entries relating to the Nulane cash transfers within the Absa account.
The State’s case is that Atul Gupta had ultimate control of the Islandsite and Pragat accounts at the time the Free State government made those payments.
“Atul Gupta was not responsible for these transfers,” says Ragavan. In a nutshell, the Free State government paid Nulane and it in turn made payments to Pragat.
State argues Pragat the ‘middleman’
Although Pragat was not part of the Sahara group, it was linked to the Absa Cash Focus account because the director of the company, Jagdish Parekh, was well-known and “trusted” by them, says Ragavan.
Parekh was a director of both Sahara and the Oakbay group of companies.
Linking Pragat’s account to the Gupta Absa account was simply an easy and convenient way to transfer money to him and to get cash from him, Ragavan says.
The State argues that Pragat was the “middleman” between Nulane and Islandsite.
Ultimately, R19-million of the Free State government cash went from Nulane to Pragat’s Bank of Baroda account before it was paid to Gateway in Dubai.
Ragavan maintains the Guptas have nothing to do with Gateway and describes the company as an entity run by a now-deceased employee, Sanjay Grover. Grover features extensively in the #GuptaLeaks as an administrator of sorts.
Atul merely a ‘proposed’ accused
South Africa obtained Interpol Red Notices for Parekh and longtime Gupta associate Ravi Nath, who had operated a Baroda bank account for Nulane, but applications in respect of the four Guptas remain pending.
Ragavan had hoped to convince the court that the State’s case against the Gupta company would crumble since there is seemingly no evidence that Islandsite had any connection with the dodgy transaction or the payments that flowed from the Free State deal.
As a result, she says, there is no merit to the State’s attempt to restrain the company in terms of the Prevention of Organised Crime Act.
She seems utterly underwhelmed by the State’s case and says there is no reasonable prospect of a conviction or any factual basis for the allegations against Islandsite.
“Other than the bald allegation of money laundering, there is simply nothing.”
The fact that the Guptas knew Sharma is “absolutely” no evidence of any form of criminal relationship.
She maintains that Islandsite has no knowledge of the details of the commercial arrangement between Nulane and the Free State government department.
“It is therefore impossible for Atul Gupta to express any view on the allegations made against Nulane.”
She describes Atul Gupta as merely a “proposed” accused person and that, for the reasons already given, it is wrong to say that Atul Gupta had control of the Sahara Cash Focus accounts.
He might, as a matter of legal power, have had the right to engage in transactions on the accounts. However, she says, “he did not do so”.
The State has opted to begin the criminal trial of Iqbal Sharma, his brother-in-law, Dinesh Patel, and former government officials Peter Thabethe, Limakatso Moorosi and Seipati Dhlamini, ahead of the prosecution of the Guptas. This is to protect their right to a speedy trial as the whereabouts of the Guptas are uncertain and a prosecution hinges on a successful extradition process.
Between them the accused face a range of charges including violations of the public finance management act, fraud and money laundering. DM