This administrative sleight of hand allowed the Guptas to import and employ foreign labour at the expense of local jobseekers, and conveniently sidestepped the onerous legal red tape meant to protect South African workers from being overlooked in favour of foreign employees.

Chawla was a key Gupta lieutenant and director of the now-bust Sahara Computers (Pty) Ltd (Sahara Computers), as well as its counterpart in India, Sahara Computer and Electronics Limited (SCEL).

Khosla was Chawla’s co-director at SES Technologies, another Indian company belonging to the Guptas. The #GuptaLeaks show how the pair abused their positions as directors to sign off on the dodgy contracts.

• READ: Second phase of Gupta naturalisation inquiry kicks off

Home Affairs

As Parliament’s home affairs committee last week heard officials explain the intricacies of the Gupta family’s dubious early naturalisation, it also emerged that scores of their non-South African employees were working locally using “intra-company transfer visas”.

Department of Home Affairs director general of immigration Jackson McKay told committee members in his written answers that none of the foreign employees employed by ANN7, or any other Gupta company, were working in South Africa using visitor or tourist visas.

Instead, these Indian nationals were issued with “intra-company transfer” permits. McKay told the committee that an earlier raid on the Gupta-owned television station found 31 Indian nationals working for ANN7 under such permits. A further nine were in South Africa using visitor’s permits, but only to attend meetings.

This means at least 40 foreign employees were working at ANN7 alone.

• READ: Home Affairs immigration head denies knowledge of Gupta visa ‘corruption’

In March this year, former ANN7 editor and Gupta-employee-turned-whistleblower Rajesh Sundaram published his book, Indentured: Behind the Scenes at Gupta TV. In it, he tells of his turbulent months working for the Gupta family as they tried to get the fledgling television news station off the ground. He also directly implicates Chawla in circumventing visa requirements.

“I had heard his (Chawla’s) name mentioned for the first time when I was asked to apply for my temporary residence permit under the intra-company transfer process before I left India for South Africa,” Sundaram wrote.

Sundaram tells of how an Indian executive of one of the main shareholders of Infinity Media, ANN7’s holding company, lamented the difficulties in obtaining a work visa for foreigners in South Africa.

“It can take months to get a South African work permit. It is a cumbersome process. We have to advertise the position in South African newspapers and then wait for six months, after which we provide evidence that we have not found a suitable local candidate. Only then can we start the process of getting a work permit. Even so, if there is an official who does not agree, the request for a work permit can still be rejected.”

But they had a plan.

• READ: Exclusive: Ex-editor reveals Jacob Zuma’s role in creating ANN7

“But Ashu-ji (Chawla) is a genius, and he has found a way around it. We will show the visas of people going to work in South Africa as intra-company transfer. Just fill in the visa form, get police and medical clearance and get back to my office. My office will issue papers certifying that you are an employee of Essel Media being transferred to South Africa.”

Later in the book, Sundaram asked the same Indian executive a question that hinted at how the operation worked:

“But all the people I have recruited to be the core team to launch ANN7 have got contracts from Infinity Media [in South Africa] and not Essel Media [in India]. They have never worked for Essel Media. I hope this is not illegal?”

Legal hoops

The Immigration Act, 2002, and its regulations require a South African business seeking to employ a foreign national to first jump through a plethora of legal hoops before the foreign employee can take up work in a local business.

Björn van Niekerk, operations director for Intergate Immigration, told News24 that a local employer needs to consider South African applicants for the position first.

“An employer intending to employ a foreigner is required to confirm that that they have first made a reasonable effort to find, interview and consider South African applicants for the position that is required to be filled. The employer must confirm that:

• they have conducted a diligent search for a suitable South African candidate;
• they were unable to find a suitable South African with the relevant skills, experience, etc.

The lengths to which the employer went to advertise the position nationally, how many South Africans were interviewed, and why the South African candidates interviewed were not considered would all be taken into account.

“These efforts are assessed by the Department of Labour which will offer a recommendation based on whether they consider the need for a foreigner to be employed, over any potential South African, to be justified. The applicant also needs to have their qualifications assessed and evaluated by SAQA (South African Qualifications Authority).”

These requirements are meant to protect South African jobseekers, and to prevent employers from simply shipping in cheap labour from overseas to do jobs local citizens can perform.

But the Gupta family found a way to circumvent these requirements.

• READ: Rajesh Sundaram: MultiChoice, ANN7 and the president’s stick

Intra-company transfers

By claiming that the applications were for “inter-company transfer visas” instead of “general work visas”, Chawla and his Sahara Computers only needed to show that these employees had been in the service of one of their Indian sister companies for a period of at least six months.

They did this by falsifying and backdating the Indian employment contracts struck with these workers.

The fraud was trivialised because Chawla was also the director of the Indian companies creating the forged records, as well as the South African Sahara Computers that employed them locally. The same occurred between Essel Media and Infinity Media, where the directors of the two companies arranged employment contracts for ANN7 staff from India.

Karan Singh

The documents and emails contained in the #GuptaLeaks shed some light on the logistics of the scheme. Between October 15 and December 15, 2014, 22-year old Karan Singh visited South Africa from his home country of India on the invitation of Sahara Computers and Chawla. He was later joined by his parents and sister: Sunil, Sunita and Vidushi Yadav were also invited by Sahara Computers on tourist visas from December 4 to 10, 2014.

The invitation letter to Singh’s parents claimed that Singh was an intern at Sahara Computers. This is despite a tourist visa prohibiting a foreigner from being employed in the country while issued with such a visa.

During his time in South Africa, Singh also met with Jitendra Tiwari, the human resources professional for Sahara Computers. Tiwari was responsible for the majority of the employment agreements between the foreign employees and Sahara, and the #GuptaLeaks show he was involved with most of the visa applications contained therein. Flight bookings contained in the #GuptaLeaks show that Tiwari accompanied Singh and his family on a flight from Johannesburg to Cape Town and back between December 8 and 10, 2014.

On December 16, 2014, the day after their return to India, Chawla forwarded Singh’s passport to Tiwari, who responded with a draft employment contract between Singh and South African Sahara Computers, appointing him as a “project manager” from January 12, 2015.

Shortly afterwards, Chawla sent an email to Khosla, a fellow director at SES Technologies in India, containing the passport of Singh.

“Please send me an appointment letter in SES for about eight months before as a project manager and I am doing inter-company transfer for him (sic).”

Khosla responded within hours, attaching a backdated appointment letter stating that Singh was appointed as a project manager at SES Technologies. SES Technologies is an Indian company of which Chawla and Khosla were co-directors.

Although the letter was backdated to May 16, 2014, the pair made a mistake. Singh’s commencement date with SES Technologies would only be on July 21, 2014, an error that was picked up on by the South African consulate. They refused Singh his visa on the basis that he had not been employed with SES Technologies for long enough, and on January 11, 2015, Singh wrote to Chawla:

“I will submit [my visa application] tomorrow. They had rejected the application before because the letter [you] had send earlier had date of joining as 21 July 2014, so [they rejected] it as it was not completing 6 months. Will submit it again tomorrow attaching the letter u had again sent me showing 21 May 2014 as the joining date for 6 months in India. Hope the embassy will not complain for the change in date (sic).”

The consulate didn’t complain, and Singh obtained his visa. He landed at OR Tambo International Airport on February 8, 2015. Two days later – on February 10, 2015 – Singh sent Chawla an email containing a scan of his passport and work permit, proudly displaying the words “intra-company transfer permit”.

• READ: ANC, ministers threatened Standard Bank to force it to keep Gupta accounts open, state capture commission hears 

Esheetaa Gupta

A second example originated late in March of 2014. Chawla received an email from Mr Sanjeev Gupta, enclosing his daughter Esheetaa’s resume and payslip for April 2014. Sanjeev Gupta, while unrelated to brothers Tony, Atul and Ajay, was closely connected with the Bank of Baroda’s chief executive officer in South Africa, Murari Lal Sharma. So close, in fact, that Esheetaa Gupta’s resume used Sharma’s mobile number as her South African contact number.

Esheetaa Gupta, an intellectual property lawyer working for a Wipro Technologies in India, was seemingly keen to secure work in South Africa.

On April 4, 2014, Chawla forwarded Esheetaa Gupta’s passport, CV and payslip to his secretary. Later that same day, she scanned and forwarded a bundle of documents signed by Chawla.

Among these was an employment agreement between Sahara Computers and Esheetaa Gupta, confirming she would be appointed as an “IP analyst” from May 15, 2014. It contained a letter from Sahara Computers to the South African consulate, stating the following:

“This letter serves to confirm that Ms Esheetaa Gupta will be transferred from SES Technologies to Sahara Computers (Pty) Ltd for a period of 24 months. This transfer qualifies as an intra-company transfer since these companies form part of the same global group. Esheetaa Gupta holds a foreign contract of employment with SES Technologies in India.”

It also contained a letter dated April 4, 2014, to the South African consulate (erroneously referred to as an “embassy”) from SES Technologies, the same company used to fabricate the employment contract for Singh. The letter from SES Technologies was also signed by Chawla and contained an exact copy of the paragraph confirming that Esheetaa Gupta was employed by SES Technologies.

These documents were sent to Esheetaa Gupta’s father on the same day. Esheetaa Gupta responded to Chawla on May 8, 2014, requesting additional documents, and in particular she required a “job offer letter from Indian company provided earlier at the time of employment”.

• READ: How the Guptas made money while being unbankable

A comedy of errors and mistakes followed, as Chawla and his secretary compiled the documents requested by Esheetaa Gupta.

The pair could not keep their story straight. Suddenly, the employment confirmation letters and backdated employment offer, previously done on the SES Technologies letterhead, resurfaced sporting SCEL letterheads, Sahara Computer’s sister company in India.

The initial set of documents also claimed that Esheetaa Gupta had started working for SCEL as an IP analyst in 2010, a peculiar oddity considering that her resume claimed that she only began working in the intellectual property field a full year and a half later, in June of 2011. Her resume stated that at the time she was employed as a project trainee at Nucleus Software Exports Limited.

The final backdated employment offer sent to Esheetaa Gupta had a more reasonable commencement date of June 27, 2013, although this still does not explain why Esheetaa Gupta’s resume sent to Chawla in April 2014 does not mention either SES Technologies or SCEL in either her employment history or references.

It also does not explain how she obtained a payslip for April 2014 as an employee of Wipro Technologies, if she was an employee of either SCEL or SES Technologies at the time.

Comment requested

Both Esheetaa Gupta and Karan Singh were sent detailed questions regarding these allegations. They were asked to confirm their employment history with either SES Technologies or SCEL, and the reasons for the subsequent intra company transfers.

Despite follow-up requests, neither Singh nor Gupta have responded to our requests for comment.

Khosla was also requested to provide comment on the evidence contained in the #GuptaLeaks but did not respond to our questions.

Questions were also emailed and sent via WhatsApp to both Chawla and his wife, Harsh Chawla. No response has been forthcoming.

It appears that the company’s management has followed the example set by the controversial Gupta brothers and bolted for India. Mediosa recently made headlines, following revelations that the North West government had paid the medical technology company R30m in advance. Mediosa was also providing similar services in the Free State.

This was before Mediosa conducted any work for either province. “Yesterday we did not get paid and there was no communication whatsoever from management regarding not being paid,” Mediosa employee Noxolo Majola told News24.

“We called the lab and the staff said Dr Vijay Balani has gone back to India. We are now worried that all of them will run away to India and leave us hanging.”

Companies and Intellectual Property Commission (CIPC) records show Mediosa Health is managed by Indian nationals Sundeep Kalsi and Inish Merchant.

Staff claim both are out of the country and have not communicated with staff regarding the payment of their salaries.

Yesterday, the SABC reported that the Kalsi’s personal assistant told them that “Kalsi isn’t here, we clossing(sic)”.

Majola also claims that the head of human resources, Nalika Jugwanth, has been avoiding their calls.

Suman Kar, who is apparently running the business in the absence of Inish Merchant, has also failed to communicate with employees.

Clear relationship

The Gupta Leaks emails show a clear relationship between the Guptas, Mediosa and its directors.

The first semblance of what would become Mediosa is contained in an email from Sunil Sachdeva, sent on May 9, 2015 to Tony Gupta.

Attached to the mail is a PDF titled “Doctors on Wheels” which details plans for a “mobile medical unit” closely resembling Mediosa’s operations.

Anita Roy was the author of the document. Roy followed this up with a document titled “MOU-Free State” on June 2, 2015. Curiously though, the draft agreement was between an Indian company called Cureva Pvt Ltd, and the Free State Department of Health. Sachdeva is a director of Cureva India.

The MOU (memorandum of understanding) contained a clause stating “[Cureva India] requests The State to use its domain expertise in Legal and Regulatory subjects to facilitate the sourcing of the equipment from outside of South Africa and more particularly from India.

“[Cureva] also requests the State to streamline the process of manpower entry into the State from India and elsewhere for the duration of the mobile facility, subject to the accreditation and registration of the manpower in India by appropriate authority, and provided that such an entry shall be specific to the contract/agreement with the State.”

Mediosa’s management has links to the Guptas and several Indian-based companies. (Graphic: Jean le Roux.)

Cureva India was literally asking the Free State provincial government to pay it to procure goods, services and employees from India. In July 2015, the Guptas purchased a shelf company called Dinovert (Pty) Ltd.

Roy and Sunil Kumar were initially appointed as the directors of Dinovert.

Dinovert changed its name to Cureva (Pty) Ltd, and eventually to Mediosa Health (Pty) Ltd in late 2017. Roy was so inspired by her role in Mediosa that she penned a blog post on LinkedIn about her experience.

Over time, the directorship of Dinovert changed. Notably though, former Minister of Mineral Resources Mosebenzi Zwane’s special advisor Kubentheran Moodley was appointed as a director from August 25, 2015 until June 12, 2017.

Both Zwane and Moodley have links to the Guptas through the Optimum Coal Mine. At present, Inish Merchant and Sundeep Kalsi are the directors of Mediosa Health.

In early February, Merchant told City Press reporters that “there is no connection at all” between himself, Mediosa and the Gupta family.

READ: Gupta friends in state’s health pie

But the Gupta Leaks contradicts this claim.

On June 15, 2015, Ashu Chawla was requested to provide a visa invitation letter for Merchant’s visit to South Africa.

Chawla cleared this with Tony Gupta, and on June 17, 2015 a letter was sent to the South African High Commission in New Delhi.

Sporting a Sahara Computers logo, it requested the High Commission to issue a business visa for Merchant.

A similar letter dated 4rd (sic) February 2016 is also contained in the Gupta Leaks emails.

Both letters indicated that Merchant would be staying in Saxonwold Drive for the duration of his stay.

Indian companies Dinovert’s sole shareholder was a company called SAS Global Services Limited, a Dubai-based company.

In a previous investigation, News24 reporters were unable to find any physical presence of the company in Dubai.

Staff at the 39-story office block listed as its address had never heard of SAS Global.

READ: Dubai: the Guptas’ city of shells

But Indian company records show Sundeep Kalsi is a director of several companies, including SAS Infrabuild, SAS Servizio, SAS Infotech and SAS Heights.

In the majority of these companies, Sunil Sachdeva, the Cureva India director, is Kalsi’s co-director. Company records also show that Cureva India’s contact email is “sas@sasgroup.in”.

A company called Ramsons Projects ties all of this together. Sachdeva and Kalsi are two of the directors of the company. Ramsons’ 2016/2017 Annual Report listed Roy is a director of the firm, and between Sachdeva’s and his companies, he controls 45% of the shareholding.

Ramsons’ business address is the same as the one used to register the sasgroup.in domain name, used in Cureva India’s email contact.

Goodbye

On Friday, Minister of Health Dr Aaron Motsoaledi called on the North West Premier Supra Mahumapelo to sack the province’s health department head, describing Mediosa as an ATM used to loot from the state.

None of this will reassure the employees of Mediosa that they will be paid.

Management informed staff they would be paid on March 6 at the earliest, but this was before the apparent abscondment of the firm’s management.

Payment troubles have haunted Gupta-linked companies in recent weeks. Staff at the Optimum mine in Mpumalanga downed tools last week after not being paid on time.

The mining company is one of eight companies with ties to the Guptas that initiated business rescue proceedings last week. Staff at The New Age and ANN7 were also paid late this month. Management of the media companies ascribed the delays to a “payment glitch”.

The Guptas sold the media companies to Mzwanele Manyi’s Lodidox last year in a vendor financed arrangement.

The Guptas are well known for their alleged role in state capture in South Africa. But the #GuptaLeaks show how Gupta lieutenants allegedly went about capturing an Indian aviation company.

Heritage Aviation is an Indian aviation company with no apparent direct links to the Guptas or South Africa. The company was formed in 2009, operating mostly chartered pilgrimage and temple tours from a small helipad in the unfortunately named town of Guptkashi.

But the leaked Gupta emails show how its sole director, Rohit Mathur, was duped, browbeaten and eventually strong-armed into giving up control of Heritage to the Guptas.

– See the GuptaLeaks site

A fiddling enterprise

To set the scene, we take a step back. Last year, News24 journalists Pieter-Louis Myburgh and Angelique Serrao attempted to crack open the City of Shells. Tellingly, it was what they didn’t find in Dubai that was of significance: of the six Gupta associated companies linked to Dubai, only one, Griphon Line Trading, had an actual office. And even that office appeared permanently closed.

Dubai is a low-disclosure jurisdiction, which means obtaining official records of company shareholding and directorships is extremely difficult, if not impossible.

One of the shell companies News24 journalists could not find in Dubai was Fidelity Enterprises Ltd. Fidelity was traced, using information in the #GuptaLeaks, to Al Quoz, an industrial district in the western reaches of the city. There the trail went cold among the dusty warehouses: locals had never heard of Fidelity, nor did they have any idea where its business address was.

READ: Dubai: the Guptas’ city of shells

Except for a brief mention in Oakbay Resources and Energy’s pre-listing documentation, no apparent links exist between the businessmen from the rural town of Saharanpur and Fidelity.

Until the #GuptaLeaks.

Fidelity is first mentioned in the #GuptaLeaks in a string of dodgy transactions between Gupta-linked companies starting June 1, 2011. SES Technologies (SES), another Gupta-linked company based in India, transferred US$400 000 to Fidelity, with the payment confirmation sent to Ashu Chawla. Chawla was a director of SES at the time and a known Gupta lieutenant. On February 15, 2018, Chawla appeared in the Bloemfontein Magistrate’s Court on charges relating to the Estina dairy farm, where millions in state funds intended for developing emerging farmers were funnelled to the Guptas.

A relationship between Fidelity and the Guptas could also be witnessed in several other transactions. A US$1m payment was made to Oakbay Investments on March 5, 2014. An unsigned loan agreement was sent to Gupta lieutenant Ronica Ragavan’s JIC Mining email address. In the agreement Fidelity undertook to lend $15m to an as-yet-to-be-identified borrower. It is clear from the #GuptaLeaks that service providers were frequently requested to invoice Fidelity for trips undertaken by the Gupta brothers.

In February 2012, Gupta-owned Sahara Computers paid Fidelity US$1m for “software”. A few days later Sahara paid another US$180 000 into Fidelity’s dollar account, as well as EUR320 000. Considering the exchange rate at the time, Sahara paid Fidelity at least R12.2m in February 2012 alone.

Not bad for a business without an address.

Pre-flight inspection

Fidelity’s lofty aviation aspirations took off in mid-2014. On June 6, 2014, Fidelity sent a letter of interest to Green Lane Capital Corporation. This expressed Fidelity’s interest in purchasing a 2005 Agusta A109E helicopter.

While Fidelity had an aircraft, it still needed an operator in India licensed to use the helicopter over there.

Heritage Aviation, headquartered in India, had previously managed another aircraft on behalf of Sahara Computers. Sahara leased its Beechcraft King Air B300 (bearing registration number VT-ACD) airplane to Indian company Air Charter Services. Heritage was without a licence at the time, and was mainly responsible for the logistical arrangements around the aircraft.

After obtaining its own licence in May 2014, Heritage Aviation’s Mathur requested Ajay Gupta “to kindly give me an opportunity about the lease of aircraft to my company so that I can start the procedure in DGCA (director-general of civil aviation) immediately”. The director-general of civil aviation supplied a no-objection letter to Heritage Aviation on October 9, 2014, giving it the green light to operate.

The problem was simple: Fidelity had the aircraft, but needed an operator in India; Heritage had an operator licence, but needed aircraft to fly. Their solution was to have Fidelity lease its aircraft to Heritage, thereby securing Fidelity an income while allowing Heritage to pocket any profit it made after the cost of the lease was accounted for. Heritage would fly charter services, charging wealthy individuals for the privilege of private flights.

Fidelity was greedy: as a foreign company, Fidelity would be taxed 25% of the lease revenue in terms of Indian tax legislation. Its tax obligations could be reduced to only 10% if the transactions were funnelled through a permanent account number (PAN) member. As Suresh Tuteja, former chief financial officer of Sahara Systems in South Africa, pointed out in correspondence to Chawla, Fidelity either had to apply for a PAN itself, or make use of another entity that was already a PAN member.

On October 16, 2014, Gupta lawyer Martinus van der Merwe, of the firm Van der Merwe and Associates, supplied Chawla with a new lease agreement between Fidelity, Heritage and Islandsite Investments 180. This appears to be an attempt to structure the agreement as per Tuteja’s instructions. Islandsite is a Gupta investment holding company, and owns, among others, the Guptas’ Sahara building in Midrand and the family’s R17m Constantia compound in Cape Town.

READ: The Guptas’ Saxonwold-lite home in Cape Town seems to be heavy on water

The plan was abandoned when it became clear that Islandsite would be in the same position as Fidelity in terms of its tax obligations, and that Heritage had already informed aviation authorities that the aircraft would be leased from Fidelity.

The deal was decidedly global. The seller was in the United States. The buyer, a company in Dubai, managed from South Africa. An operator was waiting in India, eager to take on the helicopter waiting in Rio de Janeiro. The contractual wrangling between Green Lane Capital, various brokers, Fidelity and eventually Heritage was facilitated by the Guptas’ lawyers in South Africa at the time.

Headwinds

Heritage’s Mathur attempted to negotiate better terms for himself and his company in respect of the lease agreement.

His attempts were shut down by Chawla and Tuteja. On November 24, 2014, Tuteja drafted an email to Mathur on behalf of Chawla.

“I am really surprised to receive your mail in which you mentioned that you need below mentioned amendments in the signed agreement which you have already signed and received from FEL (Fidelity). Now once the helicopter is in transit you need the amendment in agreement without any reason for it.”

Fidelity and Heritage finalised the lease agreement on Chawla and Tuteja’s terms on January 20, 2015. Heritage would lease the aircraft for 20 million rupees per annum, payable in quarterly instalments of 5 million rupees. This equated to R3.6m per year, payable in quarterly instalments.

Turbulence

At around the time that Mathur signed the lease agreement for the Agusta helicopter, Chawla and Tuteja were engaging Airbus Helicopters to purchase another two aircraft. On February 21, 2018, Airbus invoiced Fidelity Enterprises for two Airbus AS350 B3e helicopters. The purchase price for the aircraft was just short of R51m and R2.5m was paid to Airbus on February 23, 2015, securing the brace of aircraft.

The legal vetting was once again undertaken by the Guptas’ attorney, Van der Merwe. Mathur’s Heritage Aviation was approached to lease the aircraft, and the deal was finally concluded on March 5, 2015.

On March 7, 2015, Mathur once again attempted to negotiate better terms in respect of the lease agreement between Fidelity and Heritage.

“I don’t want to make any commitment to you which becomes difficult for us to honour. I am also providing first 50 hours as absolutely free of flying charges. Therefore Rs 2.5 Crores (25 million rupees) lease will be too much for my company and so I will sincerely request you agree to my suggestion,” he pleaded.

Chawla and Tuteja pushed ahead remorselessly.

At the same time, Chawla and Tuteja arranged for Heritage to take over the lease of Sahara Computer’s Hawker Beechcraft Beechjet 400XP for another 7.5 million rupees per annum.

The aircraft was transferred from Lanseria’s Execujet (using registration number ZS-POT) to Heritage Aircraft (using registration VT-HBX). Heritage entered into a lease agreement with Sahara Computers at 7.5 million rupees per annum. The transfer was concluded in mid-2015.

The final lease agreements saw Heritage coughing up US$400 000 to lease each of the two B3s, 5 million rupees per year for the Agusta and another 7.5 million rupees per year to lease the Beechcraft. Heritage had been bound to a total annual obligation of almost R25m per year towards the Guptas.

Brace for impact

Between November 2014 and June 2015, Fidelity engaged Heritage with a view to establish a joint venture between the two companies. It made business sense: Fidelity had planes, and Heritage had the licence needed to operate in India the planes it had leased from Fidelity.

From correspondence in the #GuptaLeaks, it is established that Heritage insisted on a 50/50 partnership. Ajay Gupta, Chawla and Tuteja were however pushing Mathur to settle for a 51/49 partnership in their favour, in essence giving them control over Heritage. On April 6, 2015, a final joint venture agreement was sent to Mathur. He appears to grudgingly agree to the 51/49 ownership.

It is unclear if the joint venture went ahead. But on September 12, 2015, Heritage hit turbulence.

In a letter dated September 11, 2015, addressed to Heritage, Fidelity informed Heritage it was in breach of the lease agreements it signed. Fidelity required Heritage to pay 15 million rupees and US$400 000 in terms of the first and second lease agreements respectively, within three days. Should Heritage fail to pay, Fidelity would terminate the lease agreements and inform the DGCA, resulting in a termination of Heritage’s operating licence. Heritage had to find a way to pay nearly R9m within three days, or lose everything upon cancellation of the leases.

Four days later Tuteja and Naresh Khosla, a former employee of Sahara Computers in India, met with Mathur, and attempted to convince him to hand over his financial control of Heritage to Tuteja. Mathur would only be allowed to keep operational powers.

“Tuteja ji also… threatened in a subtle way that if I don’t agree to his suggestion, bosses will take a decision on closing the operation,” Mathur confided to Chawla later that day. Chawla promptly forwarded the message to Tuteja.

“When we were discussing final points of JV [joint venture] with Ajay Sir around 22 April you were also on the phone line. Ajay Sir told me that I must agree for giving 51% stake to Sahara and in return all management rights will always remain with me. I am very eager to understand why after 1 – 2 months of getting NSOP (operator permit) I am being pressured to give away financial powers. Why there is a drastic change in your stand?” The response and eventual agreement reached with Mathur is not clear.

It was a case of Heritage needing Fidelity’s aircraft more than Fidelity needed Heritage to operate them. While Fidelity could easily lease its aircraft to another operator, Heritage was entirely dependent on Fidelity’s aircraft for its income. Heritage could either agree to the Guptas’ demands, or stand to lose its sole means of generating revenue while still owing millions to Fidelity.

Disarm doors and crosscheck

Less than two months later, Indian company records show Mukul Tekchandani was appointed as a director of Heritage Aviation. Tekchandani is also a director of SES Technologies, a company directed by Chawla’s wife, Harsh.

In the weeks following his appointment, Tekchendani sends weekly financial reports and cash flow statements to Chawla. Mathur’s correspondence dwindles and is limited to operational matters – pilot’s salaries, maintenance expenses and insurance costs for the company.

Mathur is still listed as the contact person for Heritage Aviation. As of February 1, 2018, aviation records show that Heritage sports an additional two Airbus Helicopters EC130 helicopters that have been added to the fleet, as well as the Beechcraft B300 that Mathur used to manage on Sahara’s behalf. This brings the operator’s fleet to a total of five helicopters and two airplanes.

Despite requests for comment, neither Mathur nor Chawla responded. Detailed questions to Van der Merwe and Associates were also not responded to.

It remains unclear exactly how much money the Guptas have allegedly ferreted out of the country. The web of shell companies, opaque shareholding and the Gupta’s use of their lieutenants make tracking down their companies difficult. But if their conduct in Heritage Aviation is anything to go by, millions of state funds could already be locked away in entities without any clear links to the Guptas.

In March this year, Indian revenue authorities raided several of the Gupta brothers’ properties on charges of money laundering and tax evasion.

The temple was among these properties.

SPECIAL REPORT: Gupta Leaks

Despite the Guptas themselves footing the bill for the construction of the temple, a local Indian politician, Mansoor Badar, and Sanjay Grover, a known Gupta lieutenant in Dubai, were used as the “donors” of the money earmarked for the temple’s construction.

In this multi-part investigation, we consider how the Gupta family laundered money using companies set up in Dubai and India, freeing them up to fund the temple’s construction.

First stop: Saharanpur

Construction started on the Shiva Dham temple, located in the northern outskirts of the Gupta brothers’ hometown of Saharanpur, in June 2014. The temple complex consists of several buildings, including the main temple itself, and a hall designed by architectural firm Trivedi Corporation in India.

The temple was still under construction in January this year.

And while documents in the Gupta leaks claim that Badar and Grover are the sole funders of the temple’s construction, at least a portion of the donations were bankrolled by the Guptas themselves, making fools of Indian revenue authorities in the process.

To get the money into India, the Guptas needed a plan. The Gupta leaks show that Tony Gupta expressed an interest in establishing the family’s own religious trust early in 2014. The Guptas also discussed ways of transferring money out of the country with their auditors at the time, KPMG.

“We also note there is a desire to investigate the feasibility of transferring funds off-shore, especially to India, to be utilised as religious donations (as part of funding to build the temple in the vicinity of your home town in India) as well as for business purposes,” wrote Muhammad Saloojee, director and head of corporate tax at KPMG, on June 30, 2014.

ALSO READ: Guptas dodge another tax deadline

Between June 2014 and December 2014, the family appeared to have abandoned establishing their own trust and focused on using an existing religious trust instead. The Gupta leaks show that the temple’s construction was overseen and paid for by an entity called Sh Siv Mandir Gor Sankar Vishwana Banunth Dham & Samsa Bumi Prabndak Saba (the Siv Mandir trust), a religious trust founded in 1990. The Siv Mandir trust was responsible for paying service providers and labourers for the construction of the temple.

The reasoning behind using a trust was economic: in terms of Indian tax laws, a religious trust can apply for favourable treatment of its own income as well as any donations made by its funders.

On December 10, 2014, Atul and Tony Gupta drafted a letter on behalf of their mother, the Gupta matriarch Angoori Gupta. The letter begged the Indian revenue authorities to grant the Siv Mandir trust exemptions from certain tax regimes.

Atul Gupta and his mother Angoori at the laying of the temple foundation stone. (www.shivadham.in)

“This temple is being constructed at the total project cost of Rs 100 Crores (about R180m), the donation for which will be contributed by all individual persons in Saharanpur and [a] major portion of this donation will come from Smt Angoori Devi Gupta and her family members and friends from all over the world.

“Trust has also applied for Income Tax Exemptions u/s 12 A of [Income] Tax Act and will also apply for exemption u/s 80 G of Income Tax Act. Once these exemptions are granted by the appropriate authority’s donation [sic] from all across the world will start flowing in.”

The letter was addressed to the tourism minister in Uttar Pradesh, the province of the Guptas’ hometown of Saharanpur, appealing to the minister to intervene with the tax authorities.

The letter makes it clear that the Guptas intended funding the construction of the temple using donations from their “friends and family”.

With a tax efficient and opaque trust set up to receive its donations, the Guptas could begin funding it.

Funnelling the funds

The Gupta leaks show that the temple had two intended sources of income. The first funder was Badar, a municipal councillor in Saharanpur. Badar was earmarked to provide Rs 23 million (rupees) towards the construction of the temple.

As part of the donation, Badar was required to submit a letter containing very specific wording to the revenue authorities. The accountant for the family’s businesses in India, Ashok Khandelwal, drafted an example of the letter to be used.

Khandelwal initially denied any role in the funding of the temple construction.

“Without going into the merits of your allegations, we have absolutely nothing to do with the so-called Temple construction with which you are trying to associate our name,” he wrote in an email.

“We would have no problems if you were publishing the truth, but publishing false stories without any facts should not be done. If you have any evidence, of our involvement in this, kindly share the details of the same with us before publishing the story in order for us to respond, because your inference of the information, if any, that you have seems to be absolutely wrong.”

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Khandelwal failed to respond when confronted with a copy of the donation letter he drafted. He also failed to clarify why he drafted the letter under instructions from Gupta family associates if the donor was Badar, an apparently unrelated party. Instead, Khandelwal threatened legal action on the basis of defamation and blackmail in response to the questions posed.

Badar’s motivation appears to have been political. In December 2014, Gupta lieutenant Ashu Chawla received two letters introducing Badar to the leader of a local political organisation. The letters, which had to be translated, introduce Badar to the leader of the Samajwadi Party, Akhilesh Yadav, and propose Badar as an ideal candidate for the elections to be held the following year.

Both Yadav and Badar also attended the Gupta family’s infamous Waterkloof wedding in 2013. Attempts to reach either Yadav or Badar for comment have been met with no response.

But Badar was not about to use his own money to fund the temple, and this is where the laundromat kicked in. The Gupta leaks indicate how it worked.

The laundering cycle used to fund Mansoor Badar his donations to the temple trust. (Graphic: Jean le Roux and Jaco Grobbelaar)

By making several back-to-back payments, the true source of the funding would be hidden behind several layers of transactions. All of these companies are either under the direct control of Gupta family members, or their close associates.

The next day the cycle is repeated. ITJ Retails pays LCR Investments, who in turn pays Anil Gupta. Anil Gupta arranges for the funds to be transferred by unknown means to Badar, who in turn pays ITJ Retails.

This cycle was repeated for several days until about Rs 21 million was paid towards ITJ Retails by Badar.

But the trick lies herein: Badar never paid ITJ Retails. By skipping the last link in the chain, Badar would in effect “borrow” the money from ITJ Retails by not paying it over. This was confirmed by the balance sheet for ITJ Retails, which showed that as at March 4, 2014, Badar was owed exactly Rs 23 million, the same amount contained in the planned budget for the temple.

The modus operandi becomes even clearer in another string of transactions or journal entries ordered a year later.

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On March 6, 2015, another Gupta lieutenant, Suresh Tuteja, again requested that several payments be reflected, either as transactions or journal entries in the books of the affected entities. Among these payments was Rs 17.6 million that Akash Khandelwal, the accountant-on-call for the Guptas, was to receive from “Sanjay ji”. This presumably referred to Sanjay Grover, the former Gupta associate in Dubai.

This amount would then be transferred to ITJ Retails, who would in turn “repay” Badar the Rs 23 million he borrowed ITJ Retails. Badar would then make a Rs 23 million payment to “Temple”.

Akash Khandelwal denied that he received or made any such payments, but would not explain why these payment instructions would be made using his name as the recipient of the money to be paid to ITJ Retails.

The entries also showed that the “Temple” would in turn be used to settle a vehicle loan for the benefit of SES Technologies, another Gupta-linked company that will feature prominently in the next instalment.

We can now trace a trail from the temple trust to Badar and eventually LCR Investments and SES Technologies.

Going global

The source of the money received from LCR Investments and SES is a bit murkier. But the Gupta leaks show how these companies were used to launder money paid from several overseas sources.

The first of these sources were donations paid by the Gupta family from South Africa. In late 2013, Rajesh Gupta, his wife Aarti, and Atul’s wife, Shivani, each gifted R1m to their sister in India, Achlia.

Achlia Gupta is the sister of brothers Ajay, Atul and Rajesh, and is married to the same Anil Gupta mentioned above that provided Badar with the money to pay ITJ Retails. The donations made in late 2014 appear to have been made directly into Achlia’s account.

The donations made to Achlia would invariably find their way back into the LCR Investments and SES Technologies laundry cycle. Bank records for SES show that Achlia frequently made large deposits into its account, which were subsequently funnelled away. Achlia, and other members of the Gupta family, frequently made large unsecured loans to Gupta-linked companies, among them LCR Investments.

Payments made to LCR Investments by Gupta-owned companies in Dubai were a second source of foreign income. In 2014, Indian tax authorities queried the source of funds used to provide several unsecured loans provided by the family and its companies to LCR Investments during the previous financial year.

Anil, Achlia and Doon Leisure and Hospitality (an Indian company owned by the Guptas, previously known as Sahara Computers and Electronics) were queried in this matter.

In response, Achlia referred to a donation made to her by Shivani “out of her natural love and affection for me and the same has been accepted by me”.

Yet this heart-warming gesture of charity was not paid directly to Achlia. Instead, the money was paid from her sister’s Bank of Baroda account into that of the Dubai-based Global Corporation LLC. Global Corporation would in turn pay this into the bank account of LCR Investments, again funding the cycle.

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Global Corporation was one several Gupta-linked shelf companies that a News24 investigation last year was unable to track down, despite journalists spending a week in Dubai.

A third source of funds was direct payments from the Guptas’ Dubai-based companies. An elaborate example of the way the money is laundered is found in the Gupta leaks, and involves several companies that the Guptas have direct control over.

This launder process will be delved into in the next instalment of Pillars of Sand, as well as its links to the family’s Dubai operations.

Since submitting our enquiries to the affected parties, the temple’s website has been taken down. Archived versions of the website can be found here and here.

OVERVIEW: The laundry cycle used to fund the Gupta temple in India. (Graphic: Jean le Roux and Jaco Grobbelaar)