The #GuptaLeaks reveal that 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 were not privy to the veiled source of funds.

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 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 done and audit opinions issued.”

The Gupta family did not respond to our enquiries.

Gupta Radical Economic Transformation, courtesy Mosebenzi Zwane

AmaBhungane first revealed in 2013 how the Free State provincial government had gifted an unknown company, Estina, a free 99-year lease to a 4 400-hectare farm outside Vrede. Estina’s sole director was an IT salesman with no farming experience.

The government also promised Estina R114-million a year for three years to set up a farming operation and dairy, whose supposed purpose was to empower locals and boost provincial agriculture.

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’s home town. The project was not put out to public tender.

Zwane, among the Guptas’ most ardent defenders, recently claimed the #GuptaLeaks were an attack on committed government employees.

Zwane did not respond to our enquiries made earlier this week.

In 2013, amaBhungane established that Estina had an address that was also used by Gupta companies and that Kamal Vasram, its sole director, had ties to the Guptas. Despite these signs of Gupta involvement, the family denied any connection save for a R138 000 consulting contract performed by Linkway Trading – coincidentally or not the same company that features in this story.

Vasram repeated the Gupta line that the controversial family was not involved, telling amaBhungane at the time: “I wish to categorically state that they are not involved in any manner in this project.”

The #GuptaLeaks have unravelled these denials. Dozens of e-mails and other records show the family not only had significant control over the scheme, but diverted much of the provincial government’s funding to it for their own purposes.

The Guptas’ Dubai laundromat milks the Free State

When Zwane’s successor as agriculture MEC, Mamiki Qabathe, answered questions about the project in the provincial legislature in November 2013, she said that by then a total of R114-million of the government’s money – tranches of R30-million and R84-million – had been transferred to Estina.

Financial records in the #GuptaLeaks show that over a six-week period between August and September 2013, Estina had transferred US$8 348 700 (R84-million at the time) to the Dubai bank account of a Gupta-controlled United Arab Emirates (UAE) shell company, Gateway Limited.

That is, the entire R84-million second tranche transferred by the Free State government to Estina landed in a Gupta-controlled US dollar account at Standard Chartered Bank in Dubai.

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 was shortly bounced back to two Gupta companies in South Africa – including to pay for the wedding. It went like this:

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 July 31, 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, itemised invoicefor expenses for the “V & A Function … at Sun City” (the bride and groom were Vega and Aakash).

The items for which Linkway invoiced Accurate for 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 totalled a perfectly round R30 000 000. It was further noted that “this invoice is the equivalent of USD3 333 400”.

As of the date of Linkway’s invoice, Accurate had a mere US$15 811 in its account at Standard Chartered – a tiny fraction of the amount invoiced. But thanks to the Free State government and Estina, Accurate’s bank balance would soon improve drastically.

This is where the laundromat started spinning. If the details are confusing, it is because they were meant to, but it went like this:

• On August 11, 2013 Estina transferred US$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 day Gateway transferred US$1 600 000 of the Estina money to the Standard Chartered account of yet another Gupta UAE shell, Global Corporation LLC.

• The next day, 12 August, Global transferred US$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 Estina plus another $25 to round it off – US$400 000 – to Accurate’s Standard Chartered account.

• The end result of this financial Three-card Monte was that the Guptas’ Accurate now held US$1,990,000 of the US$1 999 975 of the Free State government’s cash, which had been transferred by Estina to Gateway the day before.

Accurate then immediately transferred US$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 US$3 333 400 by US$1 347 400.

Wash, rinse, repeat

And so, the Dubai laundry machines started spinning again:

• On September 5, 2013, the next tranche of Free State funds arrived from Estina in Gateway’s Dubai account: US$2 999 975.

• Four days later, on September 9, Gateway transferred US$1 400 000 of this cash to Accurate, which then immediately paid Linkway exactly US$1 347 400 – the balance of the wedding expense invoice.

The wedding bill, however, was not the end of the Guptas’ Free State gravy train.

Weeks later, on September 23, a further US$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 Estina to Gateway to yet another Gupta UAE front, Fidelity Enterprises Limited, which then transferred US$3.1-million to Oakbay Investments, the Gupta family holding company in South Africa.

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 US$3 448 800 (about R34-million then) of the R84-million that was sucked from Estina to Dubai in August and September 2013 was justified by a Gateway invoice for a milk pasteurisation plant to be supplied by Star Engineers, an engineering firm in the Guptas’ hometown of Saharanpur, India.

#GuptaLeaks financial records, however, show only a tiny fraction of that — US$165 610 –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 Estina was kicked off the project in 2014 following a national treasury probe and amaBhungane’s exposure of dead cows being dumped in a ditch, the provincial government had paid Estina about R210-million in taxpayers’ money.

Of that, it is now clear, the Guptas, and not the people of the Free State, were the major beneficiaries.

Zwane’s continuing committed public service

Amidst 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.

Naturalised black people would now also be deemed to have been previously disadvantaged by apartheid, thereby radically transforming the Guptas into prospective BEE partners.

The Guptas started arriving in South Africa mere months before the 1994 elections.

While Zwane appears to have repeatedly bent over backwards for the Guptas – even going as far as suggesting the #Guptaleaks were driven by anti-black racism targeting him – the leaked documents suggest that perhaps Zwane’s apparent blind loyalty to the Guptas is not entirely reciprocated.

Considering the colossal quantum of cash diverted from Zwane’s Vrede dairy project to the Gupta’s pockets, one would assume that Zwane was the Guptas’ guest of honour at the Sun City extravaganza.

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, Zwane’s name – a seemingly late addition near the very bottom (at row 242 out of 254) appearing under the subheading “Extra Guests” – was misspelled as “Mosebebi”, an error which endured throughout the drafts.

Even the Guptas’ now-mortal enemy, Peter Bruce, the former editor of Business Day, snagged a higher spot (235) than Zwane on the guest list.

While the fate of the mining charter revisions recently tabled by Zwane is uncertain, one thing is clear: with the next generation of Guptas now in their teens and twenties, weddings (and wedding expenses) will continue apace.

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.

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Magashule’s staff officially invited a senior Indian politician to South Africa on a Gupta associate’s request. His son Tshepiso “Gift” Magashule then forwarded the official correspondence to Tony Gupta.

The revelations are contained in the #GuptaLeaks, a trove of data leaked from the heart of the Guptas’ business network.

The leaks offer details on what appears to be the Guptas’ modus operandi for locking-in political loyalties.

In much the same way that Duduzane Zuma was apparently groomed, the #GuptaLeaks suggest that Magashule’s sons were similarly primed to become Gupta intermediaries.

At an Indian hotel in 2012, an employee briefing his colleagues by e-mail on the imminent arrival of Rajesh “Tony” Gupta and a Free State entourage described the Gupta brothers as being “known for their billionaire lifestyles and open-door access to the highest levels of government, including the president Jacob Zuma”.

Accompanying the group to India was future mining minister Mosebenzi Zwane. At the time he was Free State MEC for agriculture. 

Read the emails

* Tony Gupta fowards Mosebenzi Zwane’s CV to Duduzane Zuma. Read it here.
* Oakbay CEO Nazeem Howa drafts Zwane’s responses for him. Read them here.

Notes and e-mails indicate that Magashule’s son Tshepiso started working for the Guptas as a consultant in November 2010, the year after Duduzane was brought into the Gupta fold.

Tshepiso appears not to have made it to the same level as the young Zuma. The #GuptaLeaks show how Duduzane, a director in several Gupta companies, was raking in R300,000 a month by March 2015, while Tshepiso, a director in only one Gupta company, was getting R90,000 a month.

In earlier days the two were treated more evenly. The #GuptaLeaks provide details of an extravagant Gupta family holiday in December 2011.

Tshepiso and Duduzane joined the Gupta brothers Ajay, Rajesh, Atul and their families on a three-week holiday to New York City and Venice, Italy.

A lengthy e-mail exchange between an Indian-based company, JV Travels and Ashu Chawla, a senior Gupta employee, detailed the group’s itinerary as well as a list of who was to fly first class and who would go business class. The young Zuma and Magashule both got business class.

Chawla signed off on the flight schedules and airfares: the 11 first class seats cost roughly R700,000 and the eight business class seats around R407,000.

The group flew to New York from Delhi in India on December 3, 2011. They spent about a week in the Big Apple before heading east again to Venice in Italy for a few days before returning to Delhi on December 20.

The #GuptaLeaks shows Tshepiso has called in favours for the ruling party.

In May 6, 2014, a day before the national elections, Tony Gupta received an e-mail via Tshepiso with an attachment titled “Air time list”.

The e-mail trail shows Tshepiso received the e-mail from a member of the Free State legislature. The subject was: “As discussed.”

The legislator wrote: “Good morning, Attached please receive a list of FS ANC party agents in need of airtime, they all use MTN. It will be appreciated if air time amounting to R120 per person could be loaded today, 06 May 2014. Hoping for your positive response.”

The attachment contained the names and cellphone numbers of 362 people – apparently all Free State ANC members.

However, for every quid there appears to be a quo. And when the Guptas needed access to the power of the premier’s office, they used Tshepiso. In November 2014, Gupta associate Ashok Narayan requested that Tshepiso print a document entitled “a drafted invitation”.

Narayan was a key figure in what amaBhungane previously reported appeared to be a money laundering scheme connected to the Guptas. He did not respond to requests for comment at the time.

Now Narayan told Tshepiso that he needed the document printed “on the official letterhead of the Office of the Premier”.

The attached invitation was to Devendra Fadnavis, chief minister of Maharashtra, Mumbai. “Ask them to fax and e-mail to the numbers provided in the letter once the Premier has signed. Please mail me a copy as well,” Narayan wrote.

Apparently heeding Narayan’s request, Tshepiso once again sent it to his father’s chief of staff, who responded: “Hi T, Please see the attached. I have the Chief Ministers e-mail address and can send it on directly should you wish me to. It may look better coming from an official premier e-mail address. Let me know.”

On the same day Tshepiso forwarded the response to Tony Gupta.

It was previously reported that Magashule did something similar just before the three-day Sun City wedding of a Gupta daughter on April 30, 2013, in an apparent attempt to tick the box of the plane full of wedding guests being an official flight.

The #GuptaLeaks confirm the invite from Magashule, on official letterhead, to Bhupinder Singh Hooda, the Chief Minister of Haryana state. They also confirm that the invite was linked to the Guptas, as it was forwarded to senior Gupta employee Ashok Narayan.

The invitation said: “I would like to cordially invite you to visit us in the Free State Province … to explore potential areas of mutual co-operation between our countries with specific emphasis on bi-lateral trade opportunities between the Province of the Free State and the State of Haryana.”

Other e-mails suggest Tshepiso received support from the Guptas, including a loan of R80,000.

His brother Thato Magashule apparently also received benefits. The e-mails show that the two brothers travelled to Dubai in December 2015, where they stayed at the luxurious Oberoi Hotel for eight days.

The hotel sent an AED10,240 (roughly R40,000 at the time) bill for the Magashule brothers’ stay directly to the Guptas’ Sahara Computers.

Despite such benefits, the Magashule brothers seem to have been treated as mid-level assets by the Guptas. At the time, Chawla instructed: “All these guest [sic] entire bills we have to pay so please arrange payments for all except Gift Magashule and Thato Magashule. For them just bed and breakfast.”

• Read Chawla’s instruction here.

Oberoi staff received similar instructions in October 2012 before Tony Gupta, Narayan and Zwane arrived in India for a part-choir, part-networking, week-long tour.

The group was booked into Oberoi Hotels throughout their stay. Shortly before their arrival, a hotel manager sent an e-mail to brief staff on the guests.

• Oberoi hotel invoice.
  

The manager said: “Dear all, this is in regards to the upcoming Sahara group at your respective hotels…

“Please note this is a VVIP group and Mr. Rajesh Gupta regularly stays at the Presidential Suite of the Taj in New Delhi.” And: “All mini bars to be locked for the entire group excepting Mr Rajesh Gupta and Ms Videsha Proothveerajh.”

At the time, Zwane was an MEC in the Free State. Zuma controversially appointed him as mining minister in 2015. Even before the October 2012 trip to India, Zwane was linked to the Guptas via a controversial dairy project in Vrede, Zwane’s home town.

In 2013, amaBhungane first learnt that Zwane was on this trip, that the New Age sponsored caps and T-shirts, and that members from the Umsingizane gospel choir and officials from the Free State’s agriculture department were part of the group.

Chawla took care of bills, which were scanned directly to him by the Oberoi hotel group.

Responses … and not

Zwane did not respond to queries from amaBhungane.

Magashule’s spokesperson issued a statement saying he “has noted the so-called – communications…

“The Free State provincial government has noted that the relevant authorities, including the Directorate of Priority Crime Investigations (Hawks), have embarked on investigations which are intended to test the validity and authenticity of such e-mails.

“Until such investigations are concluded, the premier and the Free State provincial government shall not respond to enquiries relating to the sources, content or allegations emanating from these ‘leaked’ e-mails.”

Gupta lawyer Gert van der Merwe also responded in general terms, saying in a phone call that it would be “inappropriate” to comment on claims about his clients. “I will be more than just a cowboy to respond because I have no documents or context or instructions. It is inappropriate.”

Van der Merwe said: “One finds oneself in an unfortunate position, to answer on the record on the documents when people can’t say where they got the documents. It is unreasonable even in this day and age to answer to documents held in secrecy.”

He added that he had advised his clients to obtain the leaked emails and that they had on Saturday “mounted an effort to get hold of them.”

• The story was updated after publication to include a link to emails from the #GuptaLeaks.

Now we can show how taxpayers were bled via a controversial dairy project. The evidence shows:

• R84-million was sucked to a Gupta offshore company after the Free State government paid R114-million to a contractor.
• Mosebenzi Zwane went on a Gupta-sponsored India jaunt after the provincial agriculture department, where he was MEC, approved the project.

The #GuptaLeaks have unravelled four years worth of denials by the Gupta spin machine over the family’s involvement in the controversial dairy project at Vrede in the Free State.

The project got embroiled in controversy when it emerged in 2013 that the provincial government gave an unknown company, Estina (Pty) Ltd, free argricultural land and promised it hundreds of millions in funding, without a tender.

There were signs of Gupta involvement, but the family denied any connection save for a R138,000 consulting contract.

That, as it turns out, was a multimillion rand lie. Dozens of e-mails, invoices and other documents show the family had significant control over the scheme – and sucked some R84-million to a company they controlled in the United Arab Emirates (UAE).

The #GuptaLeaks also bolster evidence that provincial politicians were “captured” by the Guptas – including Mosebenzi Zwane, now South Africa’s mineral resources minister.

Zwane, then Free State MEC for agriculture, drove the provincial government to adopt the project in June 2012. In October that year, the Guptas took him and his gospel choir on an all-expenses-paid Indian tour.

amaBhungane revealed in 2013 how the provincial government had gifted Estina, whose sole director was an IT salesman with no farming experience, a free 99-year lease to a 4,400-hectare farm outside Vrede, Zwane’s home town.

It also promised Estina R114-million a year for three years to set up a farming operation and dairy, whose supposed purpose was to empower locals and boost provincial agriculture.

amaBhungane established at the time that Estina had an address also used by Gupta companies and that Kamal Vasram, its sole director, had ties to the Guptas.

Vasram repeated the Gupta line that the controversial family was not involved, telling amaBhungane at the time: “I wish to categorically state that they are not involved in any manner in this project.”

The #GuptaLeaks offer a different take: The Gupta brothers and a number of senior Gupta employees were involved in matters as diverse as recruiting staff for Estina from India; getting them work permits; approving a contract worker’s salary, and being approached for advice regarding an employee’s dismissal.

They also applied for a bank loan for Estina, while Gupta company Sahara hosted Estina’s accounting software.

Following the money

By the time Estina was kicked off the project in 2014 following a national Treasury probe and amaBhungane’s exposure of dead cows being dumped in a ditch, the provincial government had paid Estina about R184-million in taxpayers’ money.

The #GuptaLeaks open a window on what happened to a large chunk of that money, supporting the impression that the Guptas not only controlled Estina, but were the primary beneficiaries.

Zwane’s successor as agriculture MEC, Mamiki Qabathe, answered questions in the provincial legislature in November 2013, saying that by then a total of R114-million – tranches of R30-million and R84-million – had been transferred to Estina.

Spreadsheets in the #GuptaLeaks show a total of $8.35-million – equal to the R84-million second tranche at the exchange rate then – hitting the account of a company called Gateway Ltd in August and September 2013.

Gateway is is registered in Ras al-Khaima, one of seven emirates making up the UAE and a highly secretive offshore company jurisdiction.

Gateway appears to be little more than a Gupta front; it is among a number of UAE companies administered by a man who, the #GuptaLeaks show, is a Gupta subordinate.

Part of the R84-million appears to have gone to an engineering firm in Saharanpur, the Guptas’ home town in India.

It went like this: Star Engineering, based in Saharanpur, sent a letter to Ajay Gupta in 2012, thanking him for meeting and “taking interest in our line of production of super quality dairy equipments”.

In September 2013, Gateway, the Gupta UAE company, invoiced Estina for a milk pasteurising plant at US$3.45-million (about R34-million then). A little over a week later a similar amount from Estina hit Gateway’s account.

Further correspondence shows that Gateway ordered the plant from Star Engineering in Saharanpur. A representative from the firm asked for questions to be emailed, but had not replied by the time of publication.

And so, it appears that of the R84-million remitted to the UAE, R34-million was for actual dairy equipment – although how much was paid to Star Engineering and how much Gateway kept as a mark-up remains to be seen.

What happened to the remaining R50-million Estina remitted to Gateway is not clear.

Although there was some construction at the farm and some cows were bought, the full use of the remaining R100-million from the total R184-million that the province paid Estina also remains unclear.

On visits to Vrede at the time, amaBhungane did not encounter development suggested by that level of expenditure.

Who pays the piper

Further evidence of the Guptas’ control over the project is revealed by #GuptaLeaks information about some Gupta firms’ relationship with Vasram, Estina’s director.

During the Estina saga, there were ongoing large orders from the Guptas’ Sahara Computers for IT equipment from Toshiba, represented by Vasram. E-mails also listed apparent transfers totalling millions of rand from Gupta companies to Vasram.

Separately Vasram, using his Estina e-mail address, invoiced Gupta company Linkway Trading monthly for “services rendered”. Linkway is the company the Guptas acknowledged had done “consulting” on the dairy project in its early stages.

Vasram’s invoices, initially at R11,000 a month, started in May 2011, when Estina was negotiating the project with Zwane’s Free State agriculture department, and continued until at least August 2012.

In early 2013 there were two more invoices from Vasram to Linkway, for amounts of around R50,000 each.

These invoices suggest that the Gupta consulting company paid Vasram fees for the Estina work – again upending his and the Guptas’ insistence that Estina was his business and not theirs.

The #GuptaLeaks also give a view on the family’s extensive political connectivity in the Free State. A June 2014 document titled “Indian delegation” described a Gupta employee – one of those involved in the Estina project – as “adviser to Free State Premier”Ace Magashule.

Magashule’s son, meanwhile, was on the Gupta payroll – see The ‘Gift’ that keeps on giving.

As for Zwane’s October 2012 India trip, e-mails and associated records show bookings for 24 or more travellers, including Zwane, at Oberoi hotels in different parts of India.

At one point, “M Zwan <zwanemail@gmail.com>” personally sent a list detailing which members of the party should share rooms and who should get their own. Tour programmes circulated included visits to the Taj Mahal and the “Kingdom of Dreams”, as well as “Mr Gupta house for dinner”.

In 2013, amaBhungane received information that Zwane was on the trip; that Gupta newspaper The New Age had sponsored caps and T-shirts, and that members from the Umsingizane gospel choir and officials from the Free State’s agriculture department were part of the group.

Umsingizane was apparently the brainchild of Zwane, who used it to develop and promote gospel musicians. His agriculture department subsequently adopted the choir.

Responses

Vasram and Zwane did not respond to queries from amaBhungane.

Magashule’s spokesperson issued a statement saying he “has noted the so-called email communications…“The Free State provincial government has noted that the relevant authorities, including the Directorate of Priority Crime Investigations (Hawks), have embarked on investigations which are intended to test the validity and authenticity of such e-mails.

“Until such investigations are concluded, the premier and the Free State provincial government shall not respond to enquiries relating to the sources, content or allegations emanating from these ‘leaked’ e-mails.”

Gupta lawyer Gert van der Merwe also responded in general terms, saying in a phone call that it would be “inappropriate” to comment on claims about his clients: “I will be more than just a cowboy to respond because I have no documents or context or instructions. It is inappropriate.”

Van der Merwe said: “One finds oneself in an unfortunate position, to answer on the record on the documents when people can’t say where they got the documents. It is unreasonable even in this day and age to answer to documents held in secrecy.”

He added that he had advised his clients to obtain the leaked e-mails – and that they had on Saturday “mounted an effort to get hold of them”.