amaBhungane and Scorpio

It must have been good news for Piyoosh Goyal when the State Bank of India approved his Rs750m (R120m then) loan.

So good that he then sent his agent to a senior banker’s Mumbai home on a Sunday with two expensive watches and a fistful of cash. At least, this is what the Mumbai branch of the Central Bureau of Investigation (CBI) later claimed.

Their anti-corruption investigators had lain in wait, that November 2013, and they arrested Goyal’s alleged agent when he emerged from the banker’s home.

Then they raided the home where they said they found the two watches and the cash. Simultaneously, they raided Goyal’s premises, where they claimed to have found “incriminating documents”.

The investigators laid charges of bribery and collusion against Goyal, his alleged agent and the banker.

Find all you need to know about #GuptaLeaks here

According to Indian journalists, the investigators’ evidence included more than 70 hours of recorded conversations. They also interrogated Goyal’s agent for half a day.

Goyal’s Delhi-based scrap metal company, Worlds Window Impex India, issued a statement the next day denying the allegations.

The bank got two senior staffers to investigate. Within days, they cleared their colleague of wrongdoing.

But the CBI continued to investigate and, in January 2015, it filed a charge sheet with a Mumbai judge, a spokesperson told us.

“The matter is sub judice,” he said, meaning CBI would not comment as the case was still before court.

Goyal’s questionable Indian bank loan was just the tip of an iceberg.

In this article, we reveal that by the time CBI charged Goyal, he and Worlds Window had for four years helped the South African Guptas to move the equivalent of hundreds of millions of rand between China, India, SA and the UAE, using hundreds of suspicious transactions.

Devotee, entrepreneur

Goyal founded Worlds Window in Delhi in the 1990s. He was in his early 20s. Business people described him as a “first generation entrepreneur” and a “young and dynamic businessman”.

He started by importing and trading scrap metal. Then he expanded the group into logistics, manufacturing and – after he met the Guptas in 2010 – coal mining in SA.

In 2008, Britain’s biggest metal recycler, European Metal Recycling (EMR), bought a 49% Worlds Window stake from Goyal and other shareholders. EMR holds the stake to this day, and has regularly injected cash into the business (see story below: #GuptaLeaks: Liverpool company owns 49% of Indian firm implicated in kickback scheme).

EMR told us: “EMR is disturbed to hear press reports of the alleged involvement of Worlds Windows in money laundering, which we became aware of late last year through #GuptaLeaks. We are currently carefully looking at this investment as a consequence.”

SEE: The Guptas’ bogus Dubai businesses

Worlds Window has claimed to be one of India’s largest scrap importers; however its financials suggest it was a relatively modest operation.

In the financial year ending in March 2011, the group’s holding company, Worlds Window Impex India, bought scrap worth R1.7bn. This was about 5% of the total Indian imports at the time. It said it sold a little more than this and, after operating costs, was left with R57m.

We note these numbers because, as we shall see, they were small compared to the tide of money then washing between Goyal-linked companies and the Guptas.

Before the CBI bust, Goyal had kept a modest profile. He appeared on podiums and in a few puffy news pieces as the esteemed company executive. Otherwise, he occasionally graced the pages of International Society for Krishna Consciousness newsletters.

The society described him as a donor, “senior devotee” and the “midday meal director” for Sri Sri Radha Parthasarathi Temple’s feeding programme, in south Delhi.

^{Piyoosh Goyal, right.}

He told us that because he had resigned, he could not answer our questions on Worlds Window’s behalf.

Yet, analysts at an Indian credit agency still describe Goyal as Worlds Window’s promoter. His father stayed on after 2013 as “group mentor” and a “key person”, according to its website. And at least 41 Worlds Window companies remain registered to the address Goyal declared on his 2012 tax return.

Goyal gave us limited written comment for this article, and Worlds Window ignored us despite repeated attempts to elicit a response.

However, one man came forward to offer a spirited and detailed defence for them. He did not want to be named, so we shall call him Mr Patel.

Meeting the Zuptas

Mr Patel is a senior figure in Worlds Window.

He said Goyal first met the South African Guptas through a common friend in India in 2010. The Guptas then introduced Goyal to their business partner Duduzane Zuma, the president’s son.

They encouraged Goyal to invest in SA, telling him: “We have lots of mines, and you will not face any problem. We know everybody.”

Worlds Window quickly joined the “Zupta” party, it appeared.

An August 2010 accounting record from the #GuptaLeaks described that someone from Worlds Window spent more than Rs700 000 (about R100 000 then) on “SA… President’s Clothes (Cash)… India”. The Guptas later paid them back. Jacob Zuma had officially visited India two months earlier.

We asked Mr Patel if they had bought clothes for Zuma. He said: “I can remember cloth has been purchased for Zuma and his wife. There is chances payment made by us [sic]. Don’t remember exactly. It was more than eight or 10 sets for each.”

He added: “As I remember, president used Indian cloth in India, so assuming paid by Gupta as we never met president in India [sic].”

Jacob and Duduzane Zuma and the Guptas failed to reply to our questions. South African brother Atul Gupta previously told the BBC the #GuptaLeaks were fake.

That same month in 2010, Goyal and the Guptas did one of their first big deals.

WATCH: Inside the controversial Gupta Free State dairy farm

It was dressed up as Worlds Window investing in two South African coal mines, but it appeared to be a sham, as we previously reported.

In the deal, a subsidiary of Worlds Window Impex India, the group’s flagship, transferred $4.43m (R31.5m then) to the Guptas’ Oakbay Investments in SA.

That was a lot of money for Worlds Window Impex; in fact, it was more than half of its operating profit for that year, so you would expect its subsidiary would have placed a reasonably sure bet.

Apparently not.

Worlds Window had paid for minority shares in two dormant companies that owned two questionable coal prospecting rights in SA – worse, share registers show the Guptas did not transfer the shares to Worlds Window.

Even worse, it appeared that there was no coal and the project was abandoned two years later.

Oakbay got money for nothing.

^{A purported coal deal in 2010, in which Worlds Window gave the Guptas money for nothing and never got it back.}

Our recent report compared this to two nearly identical Gupta deals in which they appeared to launder stolen Transnet and Free State provincial government money back home. It appeared to be a modus operandi.

But Mr Patel denied Worlds Window was party to a sham. He said the R31.5m was “for profitable mining”. He said: “They issued the share to us, but they might have done a fraud [sic].” He sent us a copy of Worlds Window’s purported share certificates.

Worlds Window sent its South African lawyers to investigate the fate of their money – but it only did this a full six years later, after the Gupta scandal blew up in SA. Mr Patel said the group was now considering taking legal action to recover the money.

Flying high

By early 2011, Worlds Window had registered two subsidiary companies here, and Goyal was a regular visitor.

The #GuptaLeaks show how Gupta employees made sure his travels were comfortable. They arranged his luxury airport pickups and Saxonwold meetings with South African Gupta brother Tony.

They hosted Goyal and his wife at their luxury Clifftop Lodge in Welgevonden Game Reserve in Limpopo. A helicopter was to transport the Goyals there, and the Guptas booked them into the lodge’s honeymoon suite, according to the leaks.

In 2011, Gupta staff chartered flights to carry the Gupta and Goyal families from Delhi to watch the Cricket World Cup final in Mumbai. They were joined by the family of a powerful Indian politician who was at the time a cabinet minister.

India beat Sri Lanka by six wickets.

Later that year, Goyal and the Guptas handled some travel arrangements for the politician’s adult son and the son’s wife when the couple visited Cape Town for Christmas and New Year. The Guptas paid for their stay at the luxurious Queen Victoria Hotel at the V&A Waterfront, the #GuptaLeaks show.

READ: Tegeta buyer ‘hid’ Gupta assets before

More recently, Worlds Window transferred ownership of one of its shell companies to the politician – who refused to explain the deal to us (see story below: #amaBhungane: Indian politician’s deal with Gupta partner).

In 2014, when Tony Gupta needed a helicopter for a 250km trip in the western Indian state of Gujarat, he called upon Goyal. Goyal wielded his apparently significant influence there: A senior Gupta staffer emailed him the travel details and Goyal forwarded this to billionaire industrialist Gautam Adani.

Adani and his global industrial group of the same name form a political and financial powerhouse in India. He is reported to be close to Indian Prime Minister Narendra Modi.

Goyal wrote to Adani to vouch for the Gupta staffer: “He is Ajay’s [one of the Guptas] brother can you help pls. Thx nd rgds.”

Adani quickly wrote back: “I don’t have helicopter, but if he require the plane let me know and will provide him… Gautam.”

Not two years later, the Guptas and Adani cobbled together a would-be weapons deal that, as we previously reported, was set up to enrich them at the expense of South African state arms manufacturer Denel.

Down to business

Worlds Window’s apparently pseudo mining investments and Goyal’s South African visits seem to have set the framework for a more lucrative business – money laundry.

Some time back, amaBhungane received an anonymous tipoff implicating Worlds Window and the Guptas in ports corruption in South Africa in 2011.

It said: “ZPMC has been inflating prices of their cranes at the ports, particularly the seven cranes purchased for port of Durban, by more than 15% to accommodate bribes that included many senior Transnet officials.”

ZPMC is the name commonly used by Chinese state-owned crane manufacturer Shanghai Zhenhua Heavy Industries.

Our anonymous tipster described the alleged role of “a representative of the Guptas” who arranged kickbacks through a Worlds Window account in the UAE.

This was Naveen Agrawal, a long-time director of the Worlds Window group. He did not respond to our questions.

We found one chain of correspondence in which a group of people discussed ZPMC’s crane bid. They named a “Naveen” who appeared to advise ZPMC on how to engage with Transnet on another crane tender.

We also found an “agent agreement” – often of a cover for bribes and kickbacks – between ZPMC and a UAE-registered company called JJ Trading. The contract and related documents explain how the cranes were only worth $81m (R570m then), but ZPMC inflated the price to $92m (R650m then) to make room for “commissions and fees” for JJ.

The person who signed on behalf of JJ was not identified.

At about the same time, a senior Gupta staffer emailed Goyal a confidential Transnet document, outlining a separate, upcoming crane tender.

The document metadata indicates it was drafted by an employee in Transnet’s Office of the Chairperson and Group CEO. Then Transnet chief executive Brian Molefe told us he did not know how the Guptas got it. For years, Molefe has been questioned for his proximity to the Guptas.

ZPMC denied it was party to corruption; Transnet said it was investigating, and Goyal did not explain the latter email exchange when we asked.

So, who was JJ Trading, the company that had signed the “agent” agreement with ZPMC? Was it controlled by Worlds Window as the tipoff suggested?

A desert mystery

Ram Ratan Jagati probably did not intend to become the public face of an international money laundromat.

His social media profiles identify him as “manager at JJ Trading”, but no-one answered his or JJ’s phones or emails. We were left to piece together his profile using snippets of information online and in the #GuptaLeaks.

JJ’s website advertises its experience as a trader of scrap metal, rice, beans and other commodities.

Jagati’s social media profiles show him to be balding, moustached, bespectacled and neatly dressed. He appears to live in Sharjah, in the UAE, but states that he comes from Ahmedabad in India.

                                               ^{Ram Ratan Jagati, JJ Trading “manager”.}

JJ is registered in the UAE’s Hamriyah Free Zone, a financial haven that keeps company owners’ identities a strict secret.

Jagati lists at least 41 Worlds Window staffers and directors as his Facebook friends – but emails in the #GuptaLeaks show he was more than just a “friend” to the group, particularly when moving money for the Guptas.

In one email to Jagati, a Worlds Window director said: “Dear Ram Ratan. Please provide [$1m] to Arctos.” The director copied in a Worlds Window administrative employee.

Arctos Trading is one of the two Worlds Window subsidiaries established in SA. It managed a Gupta mine in Mpumalanga.

Jagati replied with proof of a $1m wire transfer from the UAE-registered IMR General Trading to Arctos. He copied two Worlds Window staffers.

Goyal at least part owned IMR, the #GuptaLeaks show. One online UAE business list recorded “ramratanjati@yahoo.com” as IMR’s contact – a misspelling of Jagati’s actual email address. Another listed “admin@worldswindow.cc”.

Jagati’s proof of payment from IMR to Arctos claimed the money was for the “purchase of metal scrap”, but a Worlds Window staffer then forwarded this to a Gupta manager “for your reference”. A trailing email notes that it was “payment for [Bank of Baroda] instalment” – contradicting Jagati.

In other words, money had moved but the commercial explanation was a fiction. And the sequence of events reveals Jagati to have been a Worlds Window and Goyal factotum.

^{Another apparently fictional deal, handled by JJ Trading’s manager Jagati for Goyal and Worlds Window, evidencing Jagati’s place in their international network.}

More emails underscored this.

Shortly after Transnet gave ZPMC the crane contract, a #GuptaLeaks accounting document appears to record JJ’s receipt of $969 086 (R8m then). It is described as “Shanghai Zhenhua Heavy Industries”, ZPMC’s full name.

Shortly after this, a Gupta accountant emailed his colleagues instructions on how to distribute a larger sum – $3.3m, apparently including the ZPMC payment – to three Gupta-owned companies in India.

One of the Gupta staffers then sent the email to Jagati and a senior Worlds Window accountant, and JJ promptly wired the funds from its account at HSBC to the three Gupta companies.

JJ and, again, Jagati appeared to answer to Worlds Window.

                     ^{Worlds Window and the Guptas used JJ Trading and Jagati to move kickbacks.}

It wasn’t me

No, answered Goyal. “I am not the director, promoter or even employee of JJ. We [Worlds Window] never received any money either from JJ or Gupta [or] ZPMC.

“I have neither met any officer/executive of ZPMC or Transnet, [and] we were never involved in any Transnet related business so I will be highly obliged if you don’t link my name.”

He added: “For your satisfaction, we may provide you even certificate from chartered accountant that whatever business Worlds Window did with Gupta, it was 100% as per law. Even we declare all investment in our account books or whenever required informed government authorities also [sic].”

For several weeks, he did not come up with the promised accountant’s certificate. Then, in response to final questions last week, he again promised to produce one, supposedly to clear Worlds Window.

He told us: “You are misusing your writing power. With all respect, I have doubt on your intention.”

He later appeared to accuse us of drafting fiction: “Let me appreciate you are good story maker.”

Transnet spending spree

The next year, 2012, the Chinese state-owned locomotive manufacturer China South Rail (CSR) was bidding to sell Transnet 95 new locomotives.

Goyal and the Guptas got involved, #GuptaLeaks emails show.

In January, a CSR deputy director emailed Transnet CEO Molefe and CSR’s vice president. He attached a letter requesting to visit Transnet sites in South Africa.

The CSR deputy director forwarded the email to a Worlds Window group director, Rupesh Bansal.

Bansal forwarded the email to a Worlds Window staffer, commenting in broken English: “Please provide this letter copy along with update on previous email as required by Piyoosh Ji.” Recall that this is Goyal’s first name. “Please suggest him that this is the letter is sent and the points mentioned in letter are practical and to be pursued by CSR.”

The Worlds Window staffer passed the email to Goyal’s assistant, who passed it on to a senior Gupta manager and to Ajay Gupta’s son.

Meanwhile, Molefe responded – politely and appropriately – to CSR. Someone also sent this email to Worlds Window and Goyal’s assistant. She passed it on to the Guptas.

Evidently, Goyal and the Guptas’ mutual interests extended well beyond mining.

Goyal failed to explain when we asked him too.

CRRC Corporation Limited, which absorbed CSR in 2015, has not answered our questions.

We could not reach Bansal for comment.

Kickbacks

In October 2012, Transnet awarded CSR the R2.7bn 95-locomotive contract.

And, as we previously reported, CSR then started kicking 20% of the contract back to JJ and a related company called Century General Trading.

Century General is also registered in a UAE financial secrecy haven. Like JJ, its website claims that it trades scrap metal, grains and beans. And Ramratan Jagati – the JJ “general manager” who takes orders from Worlds Window and spends Goyal’s company’s money – registered its website.

A joint Worlds Window-Gupta accounting document, discussed later, shows CSR made one of its first payments – $6m (R50m then) –  to Century General in December 2012. In the following weeks, JJ and Century General wired at least $2m (R17m then) from their accounts at HSBC in Dubai to the Guptas’ front companies.

Next, Transnet ordered another 100 locomotives from CSR. These ones cost Transnet R4.4bn, and CSR started paying 21% of this to Jagati’s JJ and Century General.

And in 2014, Transnet ordered another 359 locomotives for R18.1bn. CSR started funnelling a further 21% to JJ and Century General.

All in, these non-descript little UAE metal, rice and bean dealers stood to earn a whopping R5.3bn in CSR payments. By comparison, this was more than three times the R1.7bn annual turnover for Worlds Window Impex, at the time.

JJ and Century General were to keep a 15% fee (R795m) on the Chinese kickbacks, the leaks show, way outperforming Worlds Window’s 3% operating margins (R57m) on its scrap metal.

The laundromat appeared to dwarf the Worlds Window front office.

Corporate espionage?

But Mr Patel, the Worlds Window insider, tried to convince us there was nothing out of the ordinary here.

He said of JJ: “They are professional consultant. They are associated with CSR for the last 10 years.

“JJ is not involved with Transnet deal. JJ has nothing to do with Gupta or anybody, and I don’t think you will find any deal between JJ and Gupta.

“CSR used to take help of JJ. They used to take help in Europe, Africa, India, Pak…, everywhere JJ’s consulting for them.”

We thought JJ just traded metal, rice and beans.

Nevertheless, things went awry in South Africa, Mr Patel said: “In South Africa, CSR cancelled their agreement with JJ. They say we cannot go ahead with you in South Africa. In this case JJ did lot of hard work. They have lot of expenditure for CSR, before tender.”

What sort of work?

“They hired eight or 10 guys in South Africa also, and they selected, they interviewed four or five black partners for them.”

How would a UAE scrap metal trader or its non-descript manager Jagati qualify for that job?

“Because CSR used to tell them: ‘Can we hire this consultant?’ Because being a government company, CSR cannot pay any money before tender.

“So, before tender they were required to hire so many people to do the research and consultancy and internal information. So, they hire JJ to finance all this information.

“So they hire people for intelligence. So, how much Bombardier will quote? How much GE [General Electric] will quote? So, even for this type of information, they hire people.”

Bombardier and GE were competing bidders on the Transnet locomotive contracts.

“They [JJ] have some intelligence system, as per my knowledge. Definitely they use someone to spy on somebody. Definitely. As per my knowledge. So many services.”

So many.

It was unfortunate that Mr Patel did not want to be named or explain more clearly the source of his apparent knowledge about JJ, so we asked him if he could get us documents detailing the alleged dispute between JJ and CSR.

He chuckled nervously: “Awww, ha ha ha. Why you want to? I will prefer if you write all Gupta instead of JJ. I would rather not.”

How can we reach JJ?

“Let me check, because I don’t want there to be any harm to JJ. Because I know because of internal story, JJ is in loss because of this deal, because they have been cheated by [CSR].”

“Flying Money”

Intrigued, we dug deep into the #GuptaLeaks to try to understand Worlds Window and the Guptas’ dealings.

We found huge sums of money flowing between the two groups.

Some of it was for legitimate business, as Goyal claimed. For example, Worlds Window subsidiary Arctos formed coal mining partnerships with two Gupta companies and managed their coal mine in Mpumalanga.

But other money flows were suspicious.

For example, we found a spreadsheet in the #GuptaLeaks, titled “Worlds Window”. It was attached to an email from one Gupta executive to her senior colleague. In the email, the executive typed: “Is this what u looking for?” No further context was given.

The spreadsheet is a ledger, recording 251 transactions from January 2010 until February 2013.

It looks a lot like traditional “hawala” bookkeeping.

DOWNLOAD: The Hawala alternative remittance system and its role in money laundering

Hawala is the name for an ancient form of money transfer developed in south Asia. It is still used today, often legitimately, as an alternative to formal banking systems. But because the money is not remitted through formal channels, it is a popular way to launder money.

The Chinese developed a similar system, known as “flying money”.

As a simple example, a man in the UAE wants to pay a woman in South Africa. He gives his money to an Emirati hawala broker, or “hawaladar”.

The Emirati broker will then send a message to a South African broker who will give the money to the woman there, minus a fee.

Both brokers will have many clients remitting money in both directions. Each broker will keep a running balance of how much he owes the other broker. Over time, the brokers will settle the difference.

The Gupta-Worlds Window “hawala” ledger describes a group of Worlds Windows-linked entities in one column. Other columns describe the transactions. Sometimes the explanations are cryptic, and sometimes they are clear. Overall, it appears as if the Worlds Window-linked “brokers” were transacting with Gupta-linked entities to remit money to and from South Africa, India and the UAE.

In some entries, it is easy to see how Gupta companies paid Worlds Windows companies in one country, and on the same day, the Worlds Window companies paid the Guptas the same amount in another country, and vice versa.

Thus, money was effectively “beamed” across borders.

Just like a traditional hawala ledger, this one keeps a dollar balance of how much the Guptas owed Worlds Window.

In total, $74m (R660m then) flowed into the account, and $74m flowed out, settling up the balance over time.

While the ultimate source and destination of the transactions is not always clear, some ZPMC and CSR payments can be traced from the Chinese companies, through JJ and Century General, for remittance to the Guptas in India, the UAE and South Africa.

^{The Worlds Window-Gupta “hawala” transactions, including remittances derived from Transnet contractors.}

A R76m roundabout

A number of transactions over six days in November and December 2011 were noteworthy. The transfers were recorded in the “hawala” ledger and are largely corroborated by other records in the #GuptaLeaks.

On November 30 and December 1, Gupta mining company Westdawn Investments transferred R44m to Worlds Window’s South African subsidiary Arctos. This was broken into four smaller amounts.

Immediately, Arctos transferred R44m to the Guptas’ Tegeta, broken into four differently apportioned amounts.

Tegeta kept R14.1m and immediately transferred R29.9m to the Guptas’ Oakbay Investments, which quickly parked R20m in an account at the Bank of Baroda in Sandton.

^{Over six days, the Guptas suspiciously roundtripped R76m through their group companies, routing all of it through a Worlds Window subsidiary.}

Four days later, Oakbay and a Gupta company described as “Islandsite” transferred R32m to Worlds Window’s Arctos. This was broken into five smaller amounts. Immediately, Arctos passed this on to Idwala Coal, a Gupta company, broken into three amounts.

Idwala immediately passed the R32m on to Oakbay, again broken into three amounts.

All in, the Guptas had routed R76m in a circle, through a number of their own companies, funnelling all of it through Arctos and back to their Tegeta and Oakbay.

The money flows appear to be artificial. We do not know their purpose, but in the process, the Guptas and Arctos employed three techniques common to illicit finance.

“Smurfing”: A money launderer breaks up and moves the money in small amounts to avoid detection.

“Layering”: Money is moved between numerous different accounts to obscure its source and destination.

“Roundtripping”: A series of transactions is made between companies serving to boost their revenues without real commercial benefit.

Middlemen

Gupta and Worlds Window companies often appeared to lend each other money, but the circumstances were suspicious, raising the concern that the loans could have been a fake cover for money movement.

If so, we again do not know the true motivation behind the flows.

In one example in 2013, Oakbay appeared to pay Arctos R86m. But the Guptas’ staff had a problem six months later: Their auditors needed documents to legitimately explain the payment, but there were none.

So, a Gupta executive emailed a Worlds Window manager a loan contract with non-descript terms. She said: “Please sign agreement as we did last year also.”

In at least two other cases, Worlds Window’s South African subsidiaries appeared to lend Gupta companies R16m and about $32.6m (R250m then).

In fact, the Worlds Window’s subsidiaries again appeared to act as unnecessary middlemen.

They channelled loans, originally from Bank of Baroda to the Worlds Window subsidiaries, straight on to the Gupta companies. The Gupta companies in turn repaid 9% interest to the Worlds Window companies, which passed this back to the bank.

In a 2014 email, a senior Gupta manager explained to Tony Gupta that, at times, Piyoosh Goyal had paid them “through [Baroda] loan”.

If so, it is possible Goyal or Worlds Window placed a fixed deposit with Baroda abroad. Baroda in South Africa then lent the money to the Worlds Window subsidiaries, which passed it on to the Guptas.

Indeed, Baroda described the $32.6m as a “loan against fixed deposit”.

If Worlds Window in South Africa failed to repay Baroda the underlying loan amount, the bank could simply claim the fixed deposit. Thus, money would have been moved from abroad to the Guptas under the guise of a loan, and Baroda would have earned itself a 9% fee.

We have found no evidence that the underlying loans were repaid to Baroda.

Loans from banks against fixed deposits are used for various legitimate reasons, but they tend to be between related companies, not unrelated parties in different countries.

The technique can also be abused to quietly move money across borders without detection, stymieing money laundering investigators who call this a “loan back”.

                      ^{Worlds Window appeared to use a “loan back” scheme to get money to the Guptas.}

The Guptas used Baroda loan backs to move money in other suspicious circumstances, the #GuptaLeaks show.

For instance, the Guptas at times placed hundreds of millions of rand sourced from JJ and the Transnet kickbacks into fixed-term deposits at Baroda in both Dubai and South Africa. Using these deposits as collateral, Baroda would typically lend 95% of the value of the fixed deposit to another Gupta company.

Without the #GuptaLeaks revealing the connections between the fixed deposit made by Gupta Company A to the loan made by Baroda to another Gupta Company B, it would be difficult for an investigator to follow the money trail from Company A to Company B as there would be no direct transfer.

Baroda’s intermediating the effective transfer between the two appears often to have served to obscure such money flows. Baroda did not respond to our questions.

Fallout

In the end, things did not work out for the Worlds Window launderers.

“Gupta’s have not just cheated South Africans but also cheated Indians,” Goyal told us.

“We went into partnership with the Gupta brothers for mining, and we were cheated by them in the business.”

Regarding one of their coal deals, he said: “After [them] receiving our payment, they have not allowed us to get any proceeds from the mine. We were not allowed to go on the property, and also they threatened us for not to even enter South Africa as they control things in the country [sic].”

He said the Guptas were now “illegally” selling Worlds Window’s coal.

“I have not even visited South Africa since last four years and we are now pursuing legal cases against Guptas.”

Worlds Window laid a criminal charge with the Hawks against a senior Gupta manager who allegedly stole R7.2m from one of its South African accounts in 2015. A Hawks officer confirmed he was investigating the charge.

Goyal told us: “You know very well I am in fighting with Gupta since approximately March/April 2013. But in your story, you are mentioning [payments in] 2014/2015. May I know the reason of that? I assume definitely 2013 is not fitting in your story so you prefer 2015.”

Indeed, records of Goyal’s trips to South Africa cease in the #GuptaLeaks from April 2013. But the leaks also suggest that, until late 2014, the money continued to flow between Oakbay and Arctos and JJ continued to pay into the Guptas’ UAE accounts.

But, nearly three years after the first Transnet kickbacks flowed to JJ’s accounts, HSBC shut down JJ and Century General’s accounts, according to a recent Wall Street Journal article.

HSBC told us: “To the best of our knowledge, HSBC previously exited, is in the process of exiting, or never had a banking relationship with JJ Trading [or] Century General Trading.”

But HSBC’s action seemed to be a minor inconvenience for the Guptas, who rerouted the kickback flow from JJ and Century General in Dubai to the HSBC accounts of a Gupta-related company, Tequesta, in Hong Kong.

By then, CSR had paid JJ and Century R1.6bn of the intended R5.3bn – and the #GuptaLeaks show substantial evidence of this flowing into the Guptas’ offshore accounts.

In a 2015 email, Worlds Window director Rupesh Bansal – the same one who received earlier CSR-Transnet correspondence and passed it on to Goyal – emailed CSR’s vice president. Bansal attached a spreadsheet that consolidated CSR’s payments to JJ and Century General.

The CSR man forwarded this spreadsheet to a Gupta email address.

Last week, Goyal said: “I repeat, Worlds Window neither control JJ nor Century General and never taken even a single penny from anybody on account of supply to Transnet.

“Apart from mining,” he added, “we had no areas of mutual interest with [the Guptas]”.

#GuptaLeaks: Liverpool company owns 49% of Indian firm implicated in kickback scheme

The Guptas used what looks like an international money laundering network to move their wealth. The network reaches back to the UK.

^{amaBhungane and Scorpio}

Britain’s biggest metal recycling firm holds a 49% stake in Indian firm Worlds Window, which moved hundreds of millions in kickbacks around the world for the Guptas.

The money flows are exposed in a new amaBhungane and Scorpio investigation (scroll up), based in large part on the #GuptaLeaks.

The British firm, European Metal Recycling (EMR), is a Liverpool-based business. It says its “heritage” reaches back to the 1940s. It turns over more than £2bn a year, and is largely owned and run by one family, the Sheppards.

EMR bought 49% of Worlds Window Impex India (the parent company) in 2008. EMR’s audited financials state that it “exercises significant influence over the operating and financial policies of” Worlds Window.

EMR has regularly injected capital into Worlds Window, EMR’s financials and other records show.

There is no evidence that EMR knowingly contributed to Worlds Window’s suspicious financial activity.

Between 2010 and 2015, Worlds Window directors and staff involved themselves in private bids for multibillion-rand crane and locomotive tenders at state-owned logistics company Transnet.

Offshore shell companies

The Worlds Window directors and staff then worked with offshore shell companies, which received “agent fees” – structured like kickbacks – and helped to disperse the money around the world, including to businesses associated with the Gupta family in South Africa and abroad.

Together, the Guptas and Worlds Window also moved more millions in many suspicious transactions, according to our investigation. These transactions bore multiple hallmarks of money laundering, although the source of the money was not always known.

The Guptas are friends with president Jacob Zuma and kept Zuma’s son on their payroll. They have been accused of grand corruption here.

This week, the Asset Forfeiture Unit moved to seize R1.6bn in assets linked to the Guptas and firms they did business with. It said it hoped to seize at least R50bn in 17 related cases under investigation.

ALSO READ: 14 Gupta linked companies and individuals to have their assets frozen

EMR responded to our initial questions. It said that before 2008, it had “a pretty long established trading relationship with Worlds Window who effectively acted as a sales agent into India”.

It said: “EMR is disturbed to hear press reports of the alleged involvement of Worlds Windows in money laundering, which we became aware of late last year through #GuptaLeaks. We are currently carefully looking at this investment as a consequence.”

We had asked EMR if it also had a business relationship with a number of offshore companies central to the laundering of Transnet kickbacks. These included JJ Trading, Century General Trading and IMR General Trading, all registered in UAE financial havens.

EMR’s response was confusing. It said: “EMR has no involvement with any of the companies mentioned, however a few companies have been counterparties in the legitimate trade of scrap metal.”

We asked it to explain, name its trading partners and provide evidence of legitimate business. It did not.

EMR spokesperson Olivia Healey sent us a general response, referring to a statement in EMR’s audited financials in which it classifies Worlds Window companies as “associate undertakings” because EMR “exercises significant influence over the operating and financial policies of the company”.

She said this statement “misrepresents the reality of this situation”.

She continued: “When consolidating our accounts, we work on standard assumptions as follows: ‘An associate is an entity in which the group has significant influence, but not control, over the operating and financial policies of the entity. Significant influence is presumed to exist when the investor holds between 20% and 50% of the equity voting rights.’ The important word in here is presumed. So, for the purpose of accounting, Worlds Windows is presumed to fall into this category as we have a significant minority interest.

“The reality of the situation is that [EMR] had no board representation and exercised no management control over the business. This financial investment was effectively managed by a post audit financial review which had not raised any red flags to date.

“So unfortunately we are simply unable to assist you any further with your enquiries.”

Among our questions, we had asked EMR whether it knew about or had influence over Worlds Window’s business relationship with the Guptas, the apparent laundering of kickbacks via JJ and Century General and whether it condoned other suspicious money flows, outlined in our investigation (scroll up).

#amaBhungane: Indian politician’s deal with Gupta partner

The Guptas chartered Cricket World Cup flights and bankrolled a luxury hotel stay for the family of Kapil Sibal.

^{amaBhungane and Scorpio}

Former Indian government minister and leading Congress Party politician Kapil Sibal has refused to explain a business deal with Worlds Window, a firm that apparently helped the South African Guptas to launder hundreds of millions around the world.

The suspicious money flows are explained in a new investigation (scroll up) by amaBhungane and Scorpio, based mainly on the #GuptaLeaks.

There is no evidence that Sibal was party to money laundering or corruption, but it is worth noting his refusal to explain a deal with Worlds Window, an Indian scrap metal and logistics conglomerate.

Sibal is also a top lawyer in India.

Between 2010 and 2015, hundreds of millions of rand flowed between companies linked to the Guptas and Worlds Window.

The money included Chinese kickbacks for Transnet crane and locomotive contracts. The transactions moved money between South Africa, China, UAE and India.

Lacking commercial substance

Many transactions appeared to lack commercial substance, although the source of the money was not always known.

Worlds Window was founded by Indian national Piyoosh Goyal.

After entering business with the Guptas in 2010, Goyal visited South Africa often. The Guptas also visited India.

In 2011, Gupta staff chartered flights to ferry the families of Sibal, Goyal and the Guptas between Delhi and Mumbai, for a Cricket World Cup match.

Sibal had been a government minister since 2004 and was, at that time, in charge of two portfolios: communications and information technology and human resource development. He was also a member of parliament.

Sibal was joined by his wife and adult son Akhil, also a lawyer.

Sibal senior said: “I have never had any dealings financial or otherwise with the Guptas. I have met Mr Gupta in Delhi only once when my friend Piyoosh Goyal invited me to watch the Cricket World Cup.

No Gupta invite

“We did not travel on the invitation of Mr Gupta nor am I aware of any charter by him. My wife, Akhil and I went on the invitation of Piyoosh. Even while watching the match we did not sit with Mr Gupta nor go to the ground with him.”

Akhil also said he did not know the Guptas had chartered the flight.

Later that year, the Guptas paid for Akhil and his wife to stay at the luxurious Queen Victoria Hotel at Cape Town’s V&A Waterfront over Christmas and New Year, the #GuptaLeaks show.

Akhil said: “I had requested Mr Goyal to help with arranging a car in Cape Town, and offered to pay the charges… I have known him for several years, and he is my client.”

The leaks show Goyal passed the request on to Gupta staffers, who arranged the car.

Akhil said he tried to pay in full for the hotel accommodation.

But, he said: “At the time of checking out of the hotel in Cape Town, when we asked to settle the bill for incidental expenses at the hotel, apart from the room rate, which was already settled by us in advance, the hotel staff informed us that the incidentals had been settled at the instance of Mr Goyal.

“Subsequent to my return to India, I discovered the pre-paid charges for the accommodation were also reversed. None of this was done at my request. Despite my remonstrations with Mr Goyal, on his insistence, I accepted his generous gesture.”

The #GuptaLeaks show the Guptas’ company Sahara actually paid. Akhil said he had no knowledge of this.

In November 2013, India’s Central Bureau of Investigation (CBI) charged Goyal with allegedly bribing a senior state banker for a loan.

The CBI reports to a number of ministries, including law and justice. Kapil Sibal was law and justice minister from May 2013 to May 2014.

There is no evidence to suggest Sibal interfered in Goyal’s case. In fact, CBI told us that it filed a charge sheet with a Mumbai court in 2015.

The case is still outstanding.

The Grande Castello deal

Indian corporate records show that, in February 2017, Sibal became a director of Grande Castello. Until then, Grande Castello had been a 100% Worlds Window subsidiary. It appeared to be a shell company, without assets or revenues.

We asked Sibal to explain his directorship of “Worlds Window subsidiary Grande Castello”.

He was curt: “You don’t seem to have your facts right.”

We provided him with details from the corporate records and asked him which facts were incorrect.

He stonewalled again, saying: “I have never been a director of any subsidiary company of any company.”

We provided proof the corporate register listed him, not a different Kapil Sibal.

He did not respond.

On further investigation, we discovered that Worlds Window had transferred ownership of Grande Castello into Sibal’s name in November 2016.

We explained this to him asked him to explain in light of his previous responses. We also asked him to explain substantial new loans on Grande Castello’s balance sheet and name the lender.

He said: “From your last mail, it is apparent that your assertion regarding Grande Castello in your first mail was incorrect. You now abandon that position, assert a new fact, and still wrongfully accuse me of lying.

“Sans a relevant factual foundation, you nevertheless proceed from conjecture to wild speculation and deem it reasonable to ask unwarranted questions, entirely ignoring the categorical responses already provided to you, which sufficiently answer your queries.

“I am now convinced that your intent is mischievous and your approach less than objective. I don’t intend to correspond with you any further.”

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Transnet bought seven of the world’s most expensive port cranes because its Chinese state-owned supplier inflated the price to pay off the Guptas, a kickback contract shows.

Shanghai Zhenhua Heavy Industries (ZPMC) delivered the cranes to Durban container terminal in 2012 and 2013.

When Transnet awarded the contract in September 2011, the cranes were worth no more than $81-million (R570-million then), but ZPMC inflated the price to $92-million (R650-million then) to make room for “commissions and fees”.

This is according to an “agent agreement” between ZPMC and a Dubai company called JJ Trading (JJT).

JJT stood to take most of the crane price increase, plus an extra cut, altogether totalling $12-million (R84-million). In return, JJT would make sure ZPMC got its contract.

However, financial records in the #GuptaLeaks show that JJT was largely a cut-out for the Guptas, who got most of the JJT money.

The implication is that ZPMC paid bribes to the Guptas, who somehow influenced Transnet to give it the contract.

A crane expert described this as “the most expensive crane sale of its type ever recorded”. (The expert did not want to be named.)

This kickback contract adds to a mounting body of evidence that the Guptas were gatekeepers of Transnet contracts from which they extracted enormous tolls.

JJT styles itself as a scrap metal trader, but the #GuptaLeaks suggest it runs a brisk money laundering service.

Transnet said it was investigating.

China: ‘What corruption?’

This is the third Gupta-Transnet alleged kickback contract we have found. The others involved locomotive manufacturer China South Rail (CSR) and German software giant SAP.

Global firms SAP, KPMG, McKinsey and Bell Pottinger responded to the #GuptaLeaks by removing top executives and investigating. Bell Pottinger clients fled and it fell into business administration.

By stark contrast, the two state-owned Chinese firms, which are among the most seriously implicated, just shrugged off the allegations.

CRRC Corporation Limited, which absorbed CSR in 2015, ignored our questions.

After repeated emails and two preceding articles, ZPMC said: “What you intend to report relevant to ZPMC is untrue. We have no business or other relationship with the Guptas, your president Jacob Zuma or his family.”

It declined to explain its relationship with JJT but demanded that we retract our preceding articles.

The Gupta brothers Atul, Ajay and Tony are close to Zuma, bought a house for one of his wives and are in business with his son.

The Guptas have consistently declined to answer questions, but Atul did tell the BBC the #GuptaLeaks were fake.

Agents of ‘graft’

In late 2010, Transnet tendered to buy two ship-to-shore gantry cranes to move containers to and from ships at Durban container terminal.

Brian Molefe was Transnet’s chief executive officer from February 2011. Last week, he told us: “A lot of the shipping companies were at pains to tell us about the congestion at Durban port, and it was not possible to work with the cranes. They were very old. They were already breaking down, and there were huge delays, so the port needed new cranes.”

Meanwhile, a shadowy group of agents got to work on the tender behind the scenes.

A port insider with knowledge of Transnet’s crane deals alleged that the agents lobbied Transnet to change the crane specifications to suit certain bidders and to increase the number of cranes from two to seven.

The insider also alleged that the agents obtained and shared confidential documents, including port budgets, upcoming procurement plans and competing bidders’ proposals.

Such inside information could make or break competitors’ bids.

The #GuptaLeaks show that in December 2011, a senior Gupta manager emailed a person linked to JJT a confidential Transnet document outlining an upcoming crane tender.

The document metadata indicates that it was drafted by an employee in Transnet’s Office of the Chairperson and Group CEO. Then CEO Molefe told us he did not know how the Guptas got it.

‘Nothing to see here’

Transnet spokesperson Molatwane Likhethe said the company knew of nothing untoward: “A technical assessment indicated that the two 20-metre gauge rail cranes that the company initially planned to buy would not meet the weight requirements for the quay wall due to excessive wheel loads.

“The study revealed that the quay wall could only handle nine cranes of a lighter specification, two of which could only be purchased after the completion of the berth deepening project.”

So, Transnet cancelled the two-crane tender and issued a second one in 2011 for seven more expensive “tandem lift” ship-to-shore cranes.

But, the crane expert said: “The first two cranes Transnet planned to buy were dramatically lighter than the ones they ended up buying. Also, you can always add more wheels to disperse the weight and comply with individual wheel loads. Anyone that knows anything about cranes knows that.”

Transnet did not respond to follow-up questions.

Success fee

In June 2011, ZPMC marketing manager Aqwa Chen signed an “agent agreement” with an unidentified JJT representative.

It describes Transnet’s tender for the seven tandem-lift cranes and states that JJT “has agreed to assist [ZPMC] as an agent to facilitate in this bid”.

The contract describes an apparently innocent role for JJT.

JJT would “facilitate” and “handle” ZPMC’s bid “and other relevant matters”. It would communicate with Transnet on behalf of ZPMC and help the Chinese staff to understand South African laws, codes and customs. JJT would even send out invitation letters, make hotel reservations and arrange airport shuttles.

But, critically, ZPMC would only pay JJT on condition that Transnet gave it the contract.

Four months later, Transnet awarded the contract to ZPMC.

• Read the #GuptaLeaks documents here.

Ribbon cutting

There was much fanfare when ZPMC delivered the cranes in 2012 and 2013. Molefe and then public enterprises minister Malusi Gigaba attended the ceremony.

News reports said these were the first tandem-lift cranes to be installed in the southern hemisphere.

World Cargo News reported that no one outside of China used them, except for a Dubai port, which had by then adopted a different solution.

But the crane expert told us this was for a good reason: “Why did Transnet need the most expensive type of crane ZPMC makes when the Port of Los Angeles and the Port of Long Beach, which are premier high efficiency ports, don’t use it? Everyone knows they don’t work that well.”

They said that port logistics crews often battled to manage the double lift, so the efficiencies were seldom realised.

But, last week, Molefe told us: “We decided on the tandem-lift cranes of that size because the type of vessels that were calling into Durban were quite wide, and our cranes could not reach to the other side of the vessels. These new cranes can, and they can take two containers at a time instead of one.”

He said this would double the cranes’ efficiency.

Again, the crane expert disagreed: “Most cranes can do the double container lifts.” The tandem lift capability was not necessary for this.

Kickbacks

Ultimately, it is not clear if Transnet’s decision to buy expensive cranes from ZPMC made technical and economic sense, but if it did not make sense, as alleged, that is probably because ZPMC was paying off the Guptas.

We recently reported that JJT and related shell companies received about R1.5-billion in Transnet kickbacks.

CSR paid most of this. The first Gupta kickback contract we published showed that the payments were in return for the “agents” making sure Transnet gave CSR a locomotive contract. Most of this was paid on to Gupta-controlled companies in the United Arab Emirates.

From other JJT transfers, we identified about R55-million that ZPMC paid to the Guptas, through JJT, between 2011 and 2013.

Now that we have the ZPMC-JJT kickback contract, it is clear that ZPMC was in fact paying the Guptas to make sure it got the Transnet contract.

Together, the kickback contract and a related document explain that JJT was to be paid $12-million (R84-million then) – if ZPMC won the Transnet contract.

The documents explained that even though ZPMC “offered” to sell its cranes for $81-million, Transnet would pay an inflated price of $92-million, to make room for the “commissions”.

JJT would keep 85% of the increase plus 3% of the Transnet price – this all totals $12-million.

It is not clear who got the remaining 15% of the increase – $1.7-million.

We previously reported that during the tenures of Molefe and Anoj Singh, Transnet’s former chief financial officer, Transnet spent about R30-billion on contracts against which suppliers kicked back about R5.6-billion to the Guptas.

Meanwhile, the Guptas bankrolled Singh’s alleged girlfriend, hosted him in luxury in Dubai six or seven times, opened a secret offshore shell company for him and, the #GuptaLeaks suggest, gave him large amounts of cash.

Singh and Molefe said they were not bribed.

We have not traced anyone who admits to representing JJT.

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Suspended Eskom chief financial officer Anoj Singh allowed billions in public money to slip through his fingers and into the Guptas’ pockets while they paid him offshore, the #GuptaLeaks suggest.

We have identified around R30-billion in crane, train and other Transnet contracts against which Gupta companies stood to get about R5.6-billion in kickbacks.

These were all during Singh’s tenure at Transnet, alongside chief executive Brian Molefe, where the Gupta-friendly duo executed a spending plan worth hundreds of billions.

Meanwhile, the Guptas opened a shell company for Singh in a highly secretive United Arab Emirates (UAE) jurisdiction – just after Transnet kickbacks started rolling into their accounts.

The #GuptaLeaks contain glimpses of the Guptas paying someone who appears to be Singh hundreds of thousands in cash in Dubai.

They also show that the Guptas employed Singh’s alleged mistress and seemingly helped her to buy a house with a loan.

Meanwhile, the Guptas bankrolled six or seven luxury Dubai stays for Singh (and at least one for his alleged mistress), some of which coincided with key decisions he made in their favour.

When he moved from Transnet to Eskom in 2015, Singh’s conflicting interests – the Guptas’ versus South Africans’ – followed him and found expression in his actions there.

Eskom’s lenders recently demanded Singh’s removal, and he was suspended in July.

Both the opposition Democratic Alliance and the lobby group Organisation Undoing Tax Abuse have laid criminal charges against him for his actions at Eskom. Three Eskom-commissioned investigations and another by the National Treasury indicated he has a case to answer.

Did he look away on purpose? Did he get his hands dirty? The evidence suggests both, though Singh says he is clean.

He told us he would cooperate with law enforcement authorities, but at the time of writing they had not yet approached him.

If they ever do, he has a lot to explain.

“Just a soapie”

On July 19, this year, Singh presented Eskom’s financial results.

They were bad, and Eskom’s auditors provided a gruesome account of the company’s internal controls, which were so weak that the bean counters could not be sure which expenses were regular and which were not.

On the day, we asked Singh a few questions.

Why did the Guptas repeatedly host him in Dubai? Why did they pay many thousands for his massages there? Why did they pay him money offshore? Was he bribed?

The usually smooth-talking CFO leaned uncomfortably on the table as he spoke into the microphone.

“I can go on record to say I have not received a bribe of any sort or taken a bribe from anybody,” he said. “I think, as it relates to the gifts, I will be submitting a tell-all document, so let’s just wait for that, and we will see where that lands up.”

Seven weeks later, Singh has yet to produce the document.

But Singh was irritated.

In response to written questions, he said: “As you may remember, during the Eskom results presentation, speculative information was presented by a journalist to me in this very public platform, which had very little relevance to the substantive issues raised but was presented nonetheless in a very deliberate way designed to impugn my character and reputation in the court of public opinion.

“In this vein,” he said, “I [will] not participate in the soap­-opra-­fication (for lack of a better word) of my alleged role in alleged corruption in the companies that I’ve worked in.”

He said: “Issues of corruption are currently subject to forensic investigation. The [National Prosecuting Authority] and the Hawks have recently indicated that they are beginning an investigation into these matters, and I will cooperate with any law enforcement authority if required to do so.”

In a recent BBC Radio 4 interview, Gupta brother Atul denied wrongdoing. He said: “Let’s talk Gupta leaks; there is no authenticity of Gupta leaks at all. They are all everyday deception-mongering to drive their own agenda.”

The Gupta brothers and their associates have otherwise consistently declined to comment on detailed #GuptaLeaks allegations.

A servant of the people

Singh, now 44, is a qualified chartered accountant. He studied at the University of Durban-Westville (now University of KwaZulu-Natal) before working as an accountant in the Spar group. Later, he headed big accounts at the auditing firm Deloitte.

He joined Transnet in 2003 where he worked as a senior financial manager in the company’s biggest operating division, Transnet Freight Rail. He later moved into the Transnet group head office where, in 2009, he became acting CFO.

In an email to us, Singh, described the “pivotal role” he thought state-owned companies played in South Africa’s economic transformation. “Tens of millions of people rely on the services, which has a direct bearing on their quality of life, opportunities and economic prospects.

“This is why I chose a career in the public sector.”

People who know or have worked with Singh said he was charming, persuasive and fiendishly clever. One said he was “a frikken genius at fundraising”.

In a 2012 interview, CFO South Africa asked Singh what he was most proud of. He said: “My role as the CFO at Transnet. We recently launched a R300 billion capital investment programme, the Market Demand Strategy. It is an ambitious plan that is expected to create 588 000 economy-wide jobs and transform Transnet Freight Rail into the world’s fifth biggest rail freight company.”

But it was exactly this R300-billion strategy that made the Guptas inordinately wealthy.

Seven Chinese cranes

Let us begin in 2011.

A Transnet operating division, Transnet Port Terminals, bought seven cranes to lift containers from ships at Durban harbour.

The Chinese state-owned Shanghai Zhenhua Heavy Industries (ZPMC) supplied the cranes for $92-million (R650-million then).

At the same time, ZPMC started paying off a Dubai shell company called JJ Trading, which quickly paid similar amounts to Gupta companies in the UAE and South Africa.

We shall see that the Guptas frequently used JJ Trading, whose beneficial ownership is unclear, to wash kickbacks.

Singh said of this and a later crane deal: “If a procurement activity has gone through all the process checks and balances, why would any CFO question it on face value? I as CFO had very little involvement in the process per my delegation of authority.”

ZPMC said: “We have no business or any other relationship with Guptas.”

It asked us to retract our earlier article about it, but then declined to explain the JJ Trading payments.

95 Chinese locomotives

In 2012, Transnet appointed Singh permanently. He and CEO Brian Molefe then launched their legacy project, the R300-billion capital investment plan.

Later in 2012, Transnet signed one of the first big contracts under the plan. Another Chinese firm, China South Rail (CSR), would supply 95 electric locomotives for R2.7-billion.

Against this, CSR agreed to pay R537-million in kickbacks to Gupta front companies in Dubai and Hong Kong.

JJ Trading washed a lot of this money, again.

CSR did not respond to questions.

Intangibles

Molefe and Singh were still planning to buy another 1 064 locomotives, at about R50-billion.

In preparation, Singh needed to raise cash, so in December 2012, Transnet went to tender and appointed a consortium of financial advisors.

The consortium was to be led by McKinsey, a renowned corporate advisory firm, that is today in hot water over Eskom benefits it allegedly channelled to the Gupta-linked company Trillian, now led by one Eric Wood.

Back in 2012, Wood was a partner at Regiments Fund Managers. Regiments was supposed to be McKinsey’s minority partner at Transnet, for roughly a R10-million cut.

Instead, Regiments effectively elbowed McKinsey out of the way and took over the job. Its scope and cost of services blossomed to about R266-million.

Singh and Molefe provided the fertiliser through a series of motivations and approvals.

For example, in a letter to McKinsey, Singh wrote that the main scope of the McKinsey engagement would be reallocated to Regiments.

A subsequent contract addendum purported to be between Transnet and McKinsey, but Wood scratched out “McKinsey” and signed for Regiments. Singh signed alongside, increasing Regiments’ portion of the contract to R21-million.

In a later memorandum, Singh retrospectively motivated for Regiments to be paid an extra R89-million. Molefe approved.

Along the way, Regiments picked up other Transnet contracts worth at least R219-million.

There were no open tenders for the extra contracts, but Regiments said all was above board.

Over the same period, Regiments paid at least R84-million to a Gupta shell company in South Africa called Homix.

Homix, we shall see, was also used by the Guptas to wash kickbacks for other Transnet contracts.

100 Chinese locomotives

Around the end of 2013, Transnet decided to buy another 160 locomotives, supposedly because the big 1 064 purchase was delayed. China South Rail would provide 100 of these. There is no evidence of an open tender.

Once again, the #GutpaLeaks show, CSR agreed to kick back to JJ Trading and other Gupta fronts offshore: R924-million against a R4.4-billion Transnet contract.

22 Swiss cranes

In February 2014, Transnet contracted to buy 22 more cranes for Durban harbour, this time from the Swiss firm Liebherr.

On the day that the contract was awarded, one of several Liebherr payments hit the Guptas’ UAE accounts. In the #GuptaLeaks, we identified payments totalling $4.2-million (about R46-million then).

After we published this in July, Liebherr said it was investigating: “We take the allegations very seriously. The business practices described in the article are unacceptable to us. We currently expect the investigation’s results during next week.”

That was 10 weeks ago. Liebherr did not respond to subsequent emails.

359 Chinese locomotives

The next month, March 2014, Transnet announced the big one.

Transnet had chosen four companies to supply the 1 064 electric and diesel locomotives. China South Rail got the biggest chunk: 359 locomotives at about R18-billion.

Against this, CSR was to pay a staggering R3.8-billion to JJ Trading and other Gupta fronts.

On Monday, April 21, 2014, one month after the contract, JJ Trading paid the Guptas 7.3-million Emirati dirham (AED; R20.9-million then) in cash, the #GuptaLeaks show.

On Wednesday, it paid another AED 1.8-million (R5.1-million), this time to one of their Bank of Baroda accounts. Another AED 3.3-million (R9.4-million) followed on Thursday. And so on.

A month later, JJ Trading had already paid the Guptas about R590-million.

Singh’s little secret

On March 20, 2014, just three days after Transnet awarded China South Rail the 359-locomotive contract, the Guptas opened up a shell company in the UAE.

It was called Venus Limited, and it cost the Guptas AED 11 000 (R32 000 then) in administrative fees to open.

Venus was registered in the name of a man who regularly worked for the Guptas. This man, the #GuptaLeaks show, sometimes moved huge amounts of cash into their Dubai accounts for them – a textbook “bagman”, it seems.

Five weeks later, just after the JJ Trading money landed with the Guptas, Singh boarded a plane to Dubai.

There, the Guptas hosted him at the Oberoi hotel where, the #GuptaLeaks have shown, the Gupta brothers regularly looked after South African cabinet ministers, politicians, fixers and officials.

Singh was joined at the Oberoi by brother Tony Gupta and their business partner Salim Essa, travel bookings show. While they were there together, the Gupta “bagman” transferred Venus into Singh’s name.

Where “Confidentiality is King!”

Venus is registered in Ras Al Khaimah, one of the seven emirates of the UAE.

It is notorious – or “popular” – for two reasons: Financial secrecy and tax avoidance.

Online websites that tout Ras Al Khaimah explain “the surprising level of banking privacy” in “RAK”, where “Confidentiality is King!”

According to one: “RAK Offshore sets the bar very high in terms of internal, local, federal and international compliance yet keeping customers’ confidentiality at the heart of the system” (their emphasis).

In other words, should someone send illicit funds to Singh’s new company, no one would know.

Singh declined to explain the company’s purpose.

“Mr A Singh’s” cash

We have seen no financials for Venus and do not know if the Guptas or their associates paid money to it. However, they appear to have given him cash around that time.

On June 6, 2014, Singh jetted off to Dubai for his second Gupta sojourn. There he spent two nights at the Oberoi with Tony Gupta.

One month later, the Guptas booked Singh in for a third stay at the Oberoi, although evidence suggests he may not have made this appointment.

But Singh was back in Dubai on August 29, his travel records show, when Tony Gupta appeared to give him AED 200 000 (R578 000 then) cash.

This is according to the Guptas’ internal accounting records, where a spreadsheet appears to record expenses incurred by Tony Gupta. The entry notes: “Mr A Singh Atlantis”.

It appears “Mr A Singh” was paid at Atlantis, The Palm, an ostentatious resort in Dubai.

This spreadsheet records 97 transactions. They are not listed chronologically, so it is suggestive that immediately below the AED 200 000 paid to “Mr A Singh”, a second record notes that AED 200 000 (R584 000 then) was paid to “AS Global” a few weeks earlier.

Putting aside the possibility that “AS” refers to Singh’s initials, a reliable source told us this company was for Singh’s benefit. We could not independently verify this.

Singh declined to explain these payments.

Dirty fingers?

On November 7, 2014, Singh was back at the Dubai Oberoi to spend two nights. Again, travel booking records suggest Tony Gupta and Essa were there too.

Coincidentally, at that point, the South African telecommunications network company Neotel was trying to clinch a big deal to service Transnet.

According to a report later commissioned by Neotel’s board, the negotiations had been tough. Transnet and Neotel were caught on a few “sticking points”.

These were surmountable, Neotel’s investigators noted, but a month later, Transnet “inexplicably” informed Neotel that negotiations were off.

So Neotel CEO Sunil Joshi sat down with Singh in the seedy, subterranean gloom of SLOW Lounge, Sandton on December 11, 2014.

Describing Joshi’s account, Neotel’s investigators reported that Singh confirmed the deal was off.

“Mr. Joshi was shocked and failed to comprehend how there could have been such a change in attitude from Transnet,” they reported.

Returning to Neotel’s offices, Joshi asked his staff to call up a company called Homix – the same company that Regiments paid R84-million, and who we now know to have been little more than a Gupta money cleaner.

Joshi was already acquainted with Homix because, earlier that year, Neotel paid it a R35-million “success fee” to close a different Transnet contract, the investigators reported.

That evening and twice the following morning, a Neotel manager met with someone from Homix. The two agreed that Neotel would pay Homix 2% of the Transnet contract plus R25-million later.

Like magic, the negotiations were back on track, and the R1.8-billion contract was signed a few days later.

But again?

Two months later, Transnet had Neotel in a bind once more, and again Singh featured.

In February 2015, Neotel and Homix signed a “business consultancy agreement” to finally give effect to the promise to throw Homix its pound of flesh: R36 million, or 2% of the contract.

Neotel took so long to finalise this because, unsurprisingly, its compliance staff were unhappy with the arrangement.

Come February 25, 2015 the company had not yet paid Homix.

That same day, it so happened Singh was back at the Dubai Oberoi for another two-night stay with Tony Gupta.

Coincidentally, on that day, Transnet failed to pay Neotel for its January and February services.

This was on the “express instruction” of Singh himself, Neotel staff told the investigators – and “precisely” because Neotel had not paid Homix.

The logjam was broken when Transnet paid Neotel and Neotel paid Homix in succession – while Singh and Tony Gupta were together in Dubai.

Transnet and Neotel’s relationship evidently improved because, the following month, Transnet ordered CCTV cameras worth R505-million from Neotel.

True to the pattern, Neotel’s subcontractor on the CCTV job then funnelled R15-million to The New Age, then the Guptas’ newspaper company.

Singh’s “girlfriend”

Two unconnected people told us how, during his Transnet days, Singh travelled to Dubai with a “girlfriend” who once worked at Transnet.

We have identified a woman matching this description in the #GuptaLeaks. She is not the same person as Singh’s wife.

The leaks showed this woman was listed to attend a Gupta company year-end party in Sandton with Singh as her “partner”.

Singh, who confirmed knowing her, asked us not to name her because he was concerned about her state of mind. Having spoken to her ourselves, we agreed. She declined to comment on the substantive issues.

The #GuptaLeaks reveal that Sahara Computers employed Singh’s “girlfriend” as a project manager in January 2015.

At Sahara, the woman’s monthly salary was R50 000. This was the seventeenth highest salary of 260 employees, equalling that of her line manager – in spite of an apparently non-descript role.

Other documents in the leaks show that Sahara lent her R400 000 later that year, filling the hole between her bank loan and the price tag on her second house, a R1.36-million property in Midrand.

Such generous treatment was uncharacteristic for Sahara, a usually stingy company. The suggestion is that, for some reason, the Guptas appeared to take a particularly special interest in caring for Singh’s alleged mistress.

In an email found in the leaks, the woman wrote to her line manager on February 25 to tell him: “I will be away from office tomorrow and Friday as Mr T Gupta has requested me to go to Dubai.”

Singh was already in Dubai. When she landed there the next day, her airport pickup, accommodation and meals were charged to his room.

Singh’s total invoice was for AED 18 310 (R60 000 then). Singh was recorded as being from the Gupta company Sahara Computers, and the bill was paid for with a Gupta employee’s credit card.

Feeling loco

There was one more thing about Singh’s February 2015 Dubai trip that raises questions.

His Oberoi stay was extended for three days. During this extra time, the Guptas arranged for one of China South Rail’s vice presidents to join him there, #GuptaLeaks emails show.

At that time CSR was still paying kickbacks to Gupta-linked companies for contracts awarded by Singh’s Transnet.

The confluence of these three people, orchestrated by the Guptas, is notable.

Two weeks later, the CSR vice president, Tony Gupta and Essa, the Guptas’ partner, travelled together on a chartered flight in India.

A few days after this, an email from the CSR vice president was recirculated among senior Gupta personnel. Attached to the email was a spreadsheet that reconciled kickbacks CSR owed and had already paid to JJ Trading on the three Transnet locomotive contracts.

Not long after, Essa and CSR signed a new kickback contract. According to this, the CSR kickbacks would be diverted from JJ Trading to an Essa company in Hong Kong.

Singh declined to explain.

Ructions at Eskom

Not two weeks after Singh returned from that Dubai trip, on March 12, 2015, the Eskom board suspended its CEO, finance director and two other executives.

Eskom’s then chairman said this was to make way for an investigation into Eskom’s poor power generation performance and related problems. He said: “There is nothing sinister happening. This is a fact-finding inquiry … which will last for three months.”

But many viewed the suspensions as a sham to get executives out of the way. Indeed, three of them soon resigned. President Jacob Zuma later apologised to the former CEO.

The upshot, however, was that the way was cleared for the tag team of Brian Molefe and Anoj Singh to take over at the public power utility – where the Guptas and their associates had battled to close coal and financial contracts.

Molefe was seconded to Eskom in March 2015 as acting CEO. Singh moved across, also in an acting role, a little later – but not before another trip to the Dubai Oberoi.

An Eskom briefing?

Singh flew back to Dubai on June 11, 2015. This was his sixth trip to be arranged by the Guptas.

As usual, Tony Gupta was there.

In the circumstances, it seems reasonable to ask: Was Singh there to receive his Eskom briefing?

One month later, Singh was seconded to Eskom – and two days after that, Tony Gupta, Ajay Gupta’s son Kamal, and Jacob Zuma’s son Duduzane were all present at the Oberoi.

The Guptas and Duduzane were about to benefit hugely under the new Eskom regime.

Just two weeks later, Molefe and Ajay Gupta spoke on the phone. This was first of 78 phone interactions between Molefe and the Guptas that were reported on by the former public protector in her “State of Capture” investigation.

“Anoj’s cigarette”

In the closing months of 2015, the Gupta partner Essa founded the financial advisory firm Trillian Capital Partners.

Recall that on at least two of Singh’s trips to the Dubai Oberoi, Essa was booked in alongside him, so the two were likely acquainted.

Earlier, the Guptas had tried to buy Regiments – the company that Transnet enriched through questionable payments on Singh’s watch and which had made dubious payments to Gupta front companies.

But Eric Wood’s partners at Regiments had turned the Guptas away.

So, Wood started moving his affairs to Essa’s new group, Trillian.

The details of Wood’s transfer to Trillian are entangled in controversy. Regiments’s remaining partners have claimed that both Transnet and Eskom paid Trillian for work their company had done.

Among the disputed Transnet payments was R94-million to Trillian that December, for work allegedly done by Regiments.

Even though Singh was at Eskom by then, people close to Transnet described such payments as “the cigarette that Anoj left burning in the ashtray when he left”.

Got a light?

Over at Eskom, with Singh and Molefe in place, Wood and Essa appeared to peel open a new pack of cigarettes.

Eskom and McKinsey signed an agreement in September 2015 to work on an Eskom corporate plan. Regiments worked directly on the plan alongside McKinsey, with the intention that the former would become the latter’s supplier development partner.

It was Singh who allegedly asked Regiments to help prepare Eskom’s corporate plan, according to a recent investigation by Advocate Geoff Budlender, conducted on the Trillian chair’s instruction.

McKinsey said the Regiments supplier development contract was never formalised.

But as Wood began to split away from Regiments to establish Trillian with Essa, McKinsey followed suit. It adopted Trillian as its intended supplier development partner on another big Eskom project, “the turnaround plan”.

Eskom has said Singh was not responsible for later signing a master services agreement for this plan, but one well-placed source said he was responsible for key negotiations.

McKinsey said: “Trillian ultimately failed McKinsey’s due diligence and the consultancy terminated its discussions with Trillian in March 2016.”

Eskom has admitted that it paid Trillian, however.

Wood and his staff, whether as Regiments or Trillian, also appeared to do other work at Eskom under Singh.

For example, senior Eskom staffers told us how, after Singh arrived, he started touting Regiments’ services for various jobs.

Their standard response was: “But we’ve already done that.” Or: “But we can do that ourselves.”

Then, the staffers alleged, Singh went quiet, and they learned indirectly that he had Wood doing jobs behind their backs.

In December 2015, Singh introduced Wood to Eskom’s insurers, who were covering a blown boiler, and Wood and his staff apparently advised Eskom on this project.

But some McKinsey staff appeared to feel that Wood and his colleagues were simply along for the ride or an “unwanted piece of baggage”, as one Trillian executive described it to Budlender.

For example, the Trillian executive recounted how, in a meeting, a McKinsey employee said: “Regardless of the [Trillian] resources allocated to projects, Trillian will still get their 30%”, and: “It doesn’t really matter as long as you get your percentage.”

Budlender concluded: “The Eskom contract price included 30% for Trillian, which from those [McKinsey] representatives’ point of view served little purpose other than to provide a substantial financial benefit to Trillian and its shareholders — and presumably to induce Eskom to award the contract to McKinsey”.

McKinsey replied that it took “supplier development and professional standards seriously, and that it would only ever consider entering into a supplier development partnership which would achieve impact and value for its clients, and build local capabilities in parallel”.

“Singh’s got our back”

Budlender also described an encounter between Wood and a Trillian executive, as recounted by her. She had fretted because a McKinsey due diligence concluded that Trillian was too politically exposed because of Essa’s relationship with the Guptas.

Budlender reported: “[She] said that she discussed this with Dr Wood in April 2016. He said that she was not to worry, as he would discuss the matter with Mr Anoj Singh of Eskom. He said that Trillian had responded to an Eskom request for proposals, and Mr Singh would appoint Trillian through that process.

“The obvious question which arises is how [Wood] could be so confident that Eskom would appoint Trillian.”

Eskom has admitted to paying R495-million to Trillian without contracts. We understand the true figure to be nearly R600-million.

Trillian has denied wrongdoing and said it “delivered a high standard of work to its clients”.

Optimum circumstances

Another well-told story, involving Singh and the Guptas, is how, over 2015 and early 2016, Eskom sandwiched Glencore, the owner of Optimum Coal Holdings, between a gigantic fine for poor quality coal and a tough negotiating position on Optimum’s coal prices – all while the Guptas tried to buy Optimum’s mine and related assets.

The former public protector chronicled this in her “State of Capture” report.

She showed how Eskom CEO Molefe and mines minister Mosebenzi Zwane were in close contact with the Guptas while putting the squeeze on Glencore.

Singh showed his hand a few times.

He provided a boost to the Gupta balance sheets when, late in December 2015 – when most of his staffers were on holiday – he arranged a R1.6-billion Eskom guarantee against the Guptas’ future coal supplies.

An insider explained to us that it was not unusual for Eskom to give such guarantees to help establish new mines and therefore secure future coal supplies.

What was questionable in this case (aside from Singh’s close and beneficial relationship with the Guptas), was that Optimum was already up and running. No capital investment was necessary to secure its coal supplies, they said.

Singh reaches out again

In “State of Capture”, the public protector analysed bank records and alleged that Trillian ultimately contributed R235-million towards the Guptas’ Optimum purchase consideration. Trillian denied this, although a recent report suggested a financial regulator has corroborated the public protector’s finding.

Much of Trillian’s money was presumably derived from Eskom and Transnet payments, made under Singh’s watch. But at least one invoice, for R30.6-million, was sent directly to Singh on April 14, 2016 – the same day that the Guptas’ Tegeta Exploration and Resources had to pay R2.1-billion for Optimum.

The Guptas were struggling to come up with the cash, so this payment may have been urgent for them.

The invoice was stamped “paid” on the same day that Singh received it.

At the same time, the Guptas were battling to come up with the last R600-million they needed to close the deal.

The banks would not help, and Eskom’s board tender committee held an eleventh-hour meeting and agreed that Eskom would prepay the Guptas R659-million for coal to be provided in the future.

Singh’s job included making sure the Guptas’ coal was not overpriced. Treasury investigators have complained that it was and that Singh failed to do a proper due-diligence, while accepting gifts from the Guptas in the form of the Oberoi stays.

In a recent report, they said an investigation was needed into whether Singh accepted “gratuities” to improperly influence his decisions.

The Guptas immediately used Eskom’s cash to buy Optimum.

Eskom has countered that the coal was fairly priced, that it was supplied and that Tegeta offered shares as security.

Eskom also said it urgently needed the coal to avert load shedding – yet, just two weeks earlier, public enterprises minister Lynne Brown told parliament: “Load shedding has become a thing of the past… The group chief executive officer, Brian Molefe, has assured me that there is no prognosis for load shedding over the winter months,”

Singh and the “state capture year-end party”

In December and January 2015, the Guptas invited a long list of officials, politicians and fixers to join them at the Oberoi.

Over a few weeks, they were joined by Duduzane Zuma, former finance minister Des van Rooyen (he had been appointed and fired a few days before arriving in Dubai), Free State Premier Ace Magashule’s sons, arms deal and Gupta fixer Fana Hlongwana, then deputy minister of public service and administration Ayanda Dlodlo (Hlongwana paid for himself and Dlodlo), public enterprises minister Lynne Brown’s allegedly powerful personal assistant, Denel chairman Dan Mantsha and Eskom’s group executive for generation, Matshela Koko.

Sars commissioner Tom Moyane also happened to be in town, according to news reports. But this was purely coincidental, he said.

Singh was there too.

Most of the people listed have been linked to benefits that the Guptas and their partners derived from the state.

And given that President Jacob Zuma had just attempted (but failed) to install a Gupta friend to the finance ministry, it is tempting to view the Oberoi gathering as a “state capture year-end party” – albeit with the finance minister glitch.

Singh’s attendance was significant given the events then playing out at Eskom involving Regiments, Trillian and the Optimum coal deal.

“The overlord”

On the morning after Eskom’s results presentation in July this year, Singh appeared on the TV talk showMorning Live.

The host, Peter Ndoro, asked Singh about his relationship with the Guptas and his trips to Dubai.

Singh ducked: “As I indicated yesterday, there is a document that I am currently preparing that will reveal the nature of the trips…”

Ndoro interrupted: “But Anoj, this isn’t brain surgery. You either went or you didn’t. Did you go?”

“No. I mean, yes, I did.”

“Did the Guptas pay for it?”

“No they didn’t.”

“But they didn’t give you any gifts whatsoever?”

“No.”

“So what is your relationship with the Guptas?”

“Well I think it’s like any other South African business person. I know them. I’ve been with them. I’ve met them, by and large as a result of the The New Age breakfasts, so ja.”

“So nothing unusual is going to come up in these emails to suggest that an impropriety or a relationship that is inappropriate between someone who is doing work for Transnet and then the CFO… Because you should have distanced yourself a little bit more once they had contracts with you, right?”

Anoj blinked hard, then screwed up his face thoughtfully: “Well if you look at the Transnet environment, I don’t think there was any contracts with Sahara that Transnet had entered into.”

Nobody said there were.

Singh continued: “Maybe on the Eskom side a bit more diligence would have been required. And the emails currently paint a relatively… a picture, and I think that’s the reason for the document being prepared to give perspective in terms of what the actual reality was.”

By then, Singh looked as if he felt a little hot under the collar.

Leaked emails show beyond doubt that Gupta employees arranged seven bookings at the Oberoi for Singh. They received his invoices, haggled over his rates and, in four cases, we have evidence that they paid using company credit cards.

The invoices included Singh’s numerous massages, airport limo pickups, meals and his alleged mistress’s charges, in one instance.

Once, an Oberoi staffer wrote to a Gupta employee: “Please note that with approval of Mr Gupta we also charged the credit card which you provided to us for Mr Singh charges.”

On another occasion, one Gupta employee told another to “please swipe the card for all charges” against Singh’s expenses.

And after another trip, a Gupta employee sent Singh’s Oberoi bill to Tony Gupta who responded: “Ok.”

In response to our long list of written questions, Singh conceded that, “with regard to procurement, the buck does stop with me”.

And: “With the benefit of hindsight and new facts (assuming they are correct) – presented by amaBhungane and other journalists – which I was not aware of at the time, these transactions could look suspicious and may very well be irregular,” he said.

But he thinks journalists are treating him unfairly.

“What has been distressing for me,” he said, “are speculative reports about my role in alleged corruption, concluded through largely speculative reporting written in a pointed way to substantiate the ‘state capture’ narrative. As if to say that I am some overlord that wields a magic pen and blank a cheque book at will.”

We could not have phrased it better.

* This story was edited after publication to correct the circumstances of McKinsey’s relationship with Regiments and Trillian at Eskom and to include extended comment from McKinsey.

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The #GuptaLeaks have already revealed how German software multinational SAP turned to the Guptas in their hour of need to clinch a R100-million contract from Transnet.

Now emails and documents show a second German company, Software AG, entered into an apparent kickback agreement with a Gupta-controlled company in an attempt to secure a R180-million contract from Transnet Freight Rail.

In a pattern that is becoming familiar, Software AG agreed to pay Global Softech Solutions (GSS) up to 35% of the value of the contracts it secured with Transnet, the department of correctional services, Mangaung municipality, Sasol and MultiChoice.

The Guptas’ Sahara Systems was in the process of buying into GSS, an IT services company, at the time.

But, as the saying goes, there is no honour amongst thieves.

The #GuptaLeaks also provides evidence that Software AG’s high-powered sales director, Riaaz Jeena, created a second sales commission agreement seemingly to ensure that he too would receive a slice of the pie.

Software AG is one of Europe’s largest software companies – last year it boasted €872-million (R13-billion) in worldwide revenue.

Like SAP, Software AG appeals to have been willing to pay huge amounts of money to a Gupta-controlled company under the guise of “commissions” in the hope of unlocking huge contracts from the state.

In SAP’s case, this meant paying R100-million to CAD House, a small outpost of the Gupta empire that sells 3D printers.

With both SAP and Software AG there is little evidence that the Gupta companies contributed much beyond their political influence.

The Guptas did not respond to requests for comment. Software AG confirmed the partnership with GSS, but denied wrongdoing.

October 2014: The Mangaung deal

In 2014, Software AG was trying to replicate a fantastically lucrative deal it signed with Ekurhuleni – this time with Mangaung municipality in the Free State.

Ironically, it was Lawrence Kandaswami, the now-suspended managing director of SAP South Africa, who first introduced Software AG to GSS in October that year.

Although SAP and Software AG are competitors, Kandaswami appears to have been willing to act as go-between, passing information about the Software AG deal to GSS and the Guptas’ Sahara Systems, which was in the process of buying a 50% stake in GSS.

After receiving Kandaswami’s emails, Sahara’s Santosh Choubey passed them up the chain to Gupta lieutenant Salim Essa with the message: “The same can be replicated exact solution in North West and Limpopo.”

Software AG was close to finalising the Mangaung deal, Kandaswami explained, but was now facing opposition from the municipality’s chief financial officer, who wanted an open tender. (The municipality insists it went no further than an initial presentation.)

The #GuptaLeaks provide no detail of what Essa did with this information, but the #GuptaLeaks reveal that in the months to follow, GSS became Software AG’s chosen partner on a number of potentially lucrative opportunities.

March 2015: Sensational signs of a retro-kickback

Although Sahara Systems would only formally take up its shareholding in GSS by September 2015, minutes of monthly meetings show that by March that year already it was firmly in control of GSS.

On 4 March, Choubey sent GSS’s new budget to Essa and Tony Gupta. It included four Software AG deals with potential revenue just for GSS of R56.9-million by December 2015 and another R54-million by December 2016.

The largest was a R180-million project for Transnet Freight Rail. The Mangaung deal that Software AG was having trouble closing was also on the list.

The commission agreement that Software AG would eventually sign with GSS allowed GSS to claim “referral fees” and “sales assist fees” for helping Software AG identify leads and helping Software AG close these deals.

But it appears someone else was also cutting themselves a slice of the commission payments.

Attached to a 9 March 2015 email sent by Choubey to another Gupta lieutenant, Ashu Chawla, is a draft agreement between GSS and Sensational Signs, a small company in the south of Johannesburg that manufactures steel frames for billboards.

A partnership between a Gupta IT company and a billboard company is odd enough, but the content of the draft agreement is even more suspect.

Dubbed a “Prospect Lead Provider Fee Agreement”, it promised to pay a “finder’s fee” of between 4 and 15% to Sensational Signs for identifying potential software deals or “leads” for GSS.

“In the event that [Sensational Signs] identifies Lead but elects to not actively pursue the sales cycle itself, but rather to refer such Leads to GSS, Sensational Signs shall be eligible to receive a Lead Provider Fee,” the agreement reads.

The obvious question is what kind of leads would Sensational Signs be able to identify for an IT company?

The answer is hidden in the metadata.

Since Sensational Signs was registered in September 2014 Mohamed Mobeen Jeena has been its sole director. He happens to share a surname with Software AG sales director Riaaz Jeena.

It is not clear what their exact relationship is, but records show that at various times the two Jeenas have listed the same unit in a complex in Winchester Hills as their residential address.

Although the draft agreement was between GSS and Sensational Signs, the document properties showthat it was Riaaz Jeena who drew up the document on his Software AG computer.

And although Software AG was not mentioned by name anywhere in the agreement, the wording of the Sensational Signs agreement appears to have been lifted directly from Software AG’s own contracts.

Also, the potential deals listed in the four-page annexure are the same four leads listed in the GSS budget that Software AG was already pursuing: Transnet, Mangaung municipality, Sasol and MultiChoice.

It appears that what Riaaz Jeena was effectively putting in place was a retro-kickback agreement – a scheme designed to make sure that the person paying a kickback gets some of it back for himself or a nominee.

On the Transnet Freight Rail deal, for instance, GSS was potentially agreeing to pay R27-million to Sensational Signs as a “finder’s fee” for supposedly identifying the lead and passing it on to GSS.

On the Mangaung deal, the Sensational Signs agreement anticipated that GSS would take a 35 percent (R13.65-million) cut from Software AG while Sensational Signs, though not even in existence when the German multinational made its initial pitch to Mangaung, would be entitled to 10 percent (R3.9-million) supposedly for “finding” the deal.

Detailed questions were emailed to both Riaaz and Mohamed Jeena. Riaaz Jeena was “out of the office” all week and did not answer calls on his cellphone, while Mohamed Jeena terminated the call when told it was from amaBhungane.

May – July 2015: Software AG rolls out the red carpet

By May 2015, as the opportunities rolled in, Software AG and GSS were still formalising their new partnership.

Unlike CAD House, the Gupta-company implicated in the SAP scandal, GSS at least had a track record in the software industry.

“As part of extending the company skill set I attended the training courses … in Software AG learning academy,” GSS’s founder and one-time chief executive Leela Yemineni explained via email. “I started the partnership application with Software AG in November 2013 and company attained partnership in February 2014.”

But a “Power Up Partnership” agreement that was presented to GSS in May that year represented a major step up. In terms of the agreement, GSS would be recognised as a “co-sell” partner.

• Read the draft agreement between Software AG and GSS that would give the Gupta-controlled company a significant chunk of the German company’s software deals.

The Power Up agreement did not detail the percentage that GSS would earn from Software AG, but the Sensational Signs document estimated that GSS’s share would be between 22.5% and 35%.

Software AG sales director Riaaz Jeena now also had an additional connection to GSS – in April, his wife, Fehmeda Alibhai, had started working for Sahara Systems. Minutes show Alibhai was now present in all the GSS monthly meetings where the Software AG deals were discussed.

Although the Power Up agreement between Software AG and GSS was in most respects a standard sales commission agreement, the question is what GSS brought to the party to justify the more than R100-million in commissions it expected to make according to its budget.

The agreement was clear that “Software AG will not accept leads that have already been … identified by Software AG itself.”

In the case of the Mangaung, it is clear that Software AG had identified the deal long before GSS came into the picture.

This was confirmed by Mangaung communications manager Qondile Khedama, who said in an email: “Software AG South Africa … made a presentation to the city’s management team in July 2014.”

The Sensational Signs document also makes it clear that the deals on the list were not new – some were scheduled to be finalised in less than 30 days.

However, in terms of the Power Up agreement GSS could still earn a sales assist fee if it “actively drives [the] majority of the sales cycle with Customer”.

However, most of the customers we approached claimed never to have heard of GSS.

The Sasol deal

Sasol’s group head of media relations, Alex Anderson, said Sasol first approached Software AG in February 2015 and later invited Software AG and three other bidders to submit proposals.

“Sasol was not aware of GSS as an organisation nor of GSS’ involvement and association with Software AG. Sasol did not engage at all with GSS… All engagements … were through Software AG directly,” Anderson said in an email.

Despite both GSS and Sensational Signs being missing in action according to Sasol, the Sensational Signs document shows that GSS, the company controlled by the Guptas, expected to earn R10.5-million from the Sasol contract, R4.2-million of which would flow to Sensational Signs, the billboard company.

Sasol said no contract was awarded in the end.

The MultiChoice deal

Like Sasol, MultiChoice says it had also never heard of GSS or Sensational Signs.

“MultiChoice concluded a contract with Software AG in 2015 for the provision … of a number of IT related services,” general manager of corporate affairs Jackie Rakitla said.

“All payments in terms of the contract are made to Software AG and to no other entity. Global Softech Solutions (GSS) is not mentioned in the above contract. MultiChoice has no relationship with GSS…

MultiChoice is also unaware of any alleged agreement between Software AG and GSS. As far as we can ascertain, none of our employees or authorised representatives have met with GSS or Sensational Signs.”

Yet, according to the Sensational Signs document, GSS expected to earn R4.5-million from Software AG for the contract, of which Sensational Signs would get R1.5-million for “finding” the lead.

• Read the Sensational Signs agreement here.

Unlike Sasol, the MultiChoice deal did actually go ahead and a GSS spreadsheet details how the money appears to have flowed.

On 2 July 2015, Software AG paid R3 805 597 to GSS with the reference “MultiChoice deal”. The following day, GSS made two payments: One of R1.71-million (R1.5-million plus VAT) to Sensational Signs and another of R1.48-million to a company called Forsure Consultants. Both listed as a reference “MultiChoice deal”.

Little is known about Forsure Consultants except that it shares an address in Mayfair and a former director with Homix, the Gupta-linked letterbox company that amaBhungane previously revealed received kickbacks from Neotel and other companies on Transnet contracts.

The #GuptaLeaks spreadsheet also recorded that GSS transferred another R798 000 to Sahara Systems with the reference “MultiChoice deal”.

The Transnet deal

The only instance where GSS seems to have played an active role was at Transnet Freight Rail.

“Transnet received an unsolicited proposal from Software AG and Global [Softech] Solutions for the provision of a demurrage system…” Transnet spokesperson Viwe Tlaleane confirmed.

Transnet bills clients for demurrage fees when a scheduled rail trip cannot go ahead because of delays on the client’s side. The proposed system would help Transnet to increase the amounts it collects.

“At the time, [Transnet] did not have a structured way of determining demurrage fees, and saw the value in having a system that would enable it to ensure effective and optimal use of its rolling stock,” Tlaleane said.

This resulted in Transnet entering a pilot project with Software AG and GSS in 2015.

“The contract is commission based and fees will be determined by revenue generated by Transnet on a percentage that is less than 50%.”

The draft agreement between GSS and Transnet found in the #GuptaLeaks indicates that GSS would receive between 49.5% and 50% of the revenue generated for Transnet: a potential R263-million in total. Software AG would receive a royalty for providing the software.

Although GSS was supposed to be the main partner on the deal, email exchanges show that it was Software AG and Jeena, its sales director, that drew up GSS’s proposal for Transnet.

Although Transnet said the pilot project was ongoing, Software AG’s Cassoojee denied any knowledge of it: “Software AG has not generated revenue from any of the references made in your request … apart from one Private Sector transaction which we cannot disclose… All other Proposals have subsequently expired and we have not entered into any additional agreements with GSS since December 2015.”

The prisoner deal

In addition to the four opportunities already identified in GSS’s budget and the Sensational Signs agreement, emails show Software AG was also pushing for Sahara Systems to submit a bid for a prisoner tracking system.

Software AG appears to have been hoping to sell Software AG’s products and GSS’s services to the department of correctional services (DCS) by using its new partner’s political connections.

“I want you guys to get all the services business more than anything else on this deal… I don’t have an idea on the size of the [software] license deal implications as yet, but the services would be huge on a deal like this!” Software AG partner manager Joanne Foster told Sahara’s Choubey in an email, before adding: “Do you have contacts and leverage @ DCS?”

• Email from Joanne Foster regarding the DCS deal.

Foster ignored requests to comment. AmaBhungane previously reported the contract was awarded to another politically-connected company.

Another kickback?

It is not clear how much flowed from Software AG to GSS as several of the opportunities identified did not materialise. But there is very little evidence that GSS earned its fees by identifying leads or doing the sales legwork.

As with SAP, the Software AG commission agreement comes across as stage-managed to disguise payments to politically-connected people and their companies, in essence an apparent kickback for helping Software AG to secure business.

Software AG South Africa’s Cassoojee responded in writing: “Software AG prospective Partners undergo a stringent verification process that ensures Partners are able to add value to the customer… Software AG is committed to conducting its business fairly, impartially, in an ethical and proper manner, and in compliance with all laws and regulations.”

Cassoojee did not, however, offer any insight into how GSS added value to its customers when three out of four potential customers claimed not to have heard of the company.

We also asked if Software AG sanctioned Jeena’s side deal between GSS and Sensational Signs. Cassoojee did not respond and none of the questions sent to Software AG’s head of corporate communications globally, Byung-Hun Park, went answered since our first email on 26 June.

We also put this allegation to Yemineni. He said via email: “Sincerely I was not involved in sales and finance from mid of 2014. Apologies.” He also said he had formally left the company in 2016.

In May 2016, Sahara Systems sold its 50% stake in GSS to Futureteq, which at the time was owned on paper by Imtiaz Emmamally and Fehmeda Alibhai. Circumstantial and source evidence suggests, however, that Futureteq is effectively controlled by the Guptas.

Either way, this potentially places Alibhai — Jeena’s wife — in prime position to benefit if the Transnet contract goes ahead.

Transnet’s Tlaleane told us: “The trial period is set to expire late this year and [Transnet] will make a decision on whether or not to roll out the project in full.”

For now, however, GSS seems to be keeping a low profile. Its phones went unanswered all week; emails sent to official GSS email addresses bounced back; and a visit to GSS in Rivonia turned up an empty office.

Detailed questions were put to Emmamally, Alibhai and Gupta spokesperson Gary Naidoo, but none responded.

Meanwhile, SAP has confirmed that the international law firm it hired to investigate allegations that it paid kickbacks to the Guptas will also look at a December 2015 bid amaBhungane previously reported on, where SAP planned to subcontracted 60% of an R800-million Transnet software contract to GSS as its “supplier development partner”.

SAP’s Ansohpie Strydom said: “The investigations cover SAP’s entire South African operation, and include a review of all contracts… SAP has committed to sharing the results of the investigations once they have been completed.”

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But the Guptas’ repeated use of US dollars to move their kickbacks around the globe, along with previously hidden ties to US companies, may render the Hawks’ efforts (or lack thereof) irrelevant.

Under American anti-bribery and anti-money laundering laws, one link to the United States could expose all members of any broader conspiracy to the jurisdiction of American courts.

In addition to personal US criminal liability, ill-gotten gains are also at risk.

The US Department of Justice’s Kleptocracy Asset Recovery Initiative recently seized billions of dollars of assets – including bank accounts, real estate, art, jewelry, aircraft and yachts – located around the world.

When announcing the latest such seizure last Friday – stemming from contracts corruptly obtained by bribing Nigeria’s former oil minister – a senior official at the US Department of Justice remarked: “Corrupt foreign officials and business executives should make no mistake: if illicit funds are within the reach of the United States, we will seek to forfeit them and to return them to the victims from whom they were stolen.”

US-listed companies

The Guptas’ dealings with software giant SAP potentially provides US authorities with a clear means of getting their foot in the door.

Although headquartered in Germany, SAP’s stock trades on the New York Stock Exchange, thus making the company subject to various US laws, including the Foreign Corrupt Practices Act (FCPA).

Last week, amaBhungane and Scorpio revealed that SAP paid R100-million to Gupta-linked CAD House.

By the end of the week, SAP had replaced its executive team in South Africa and had launched both internal and external investigations, the latter being led by US law firm Baker McKenzie.

To receive maximum credit for cooperating – thereby potentially reducing recommended fines by half – companies are expected to thoroughly investigate and self-report FCPA violations to US authorities.

To be eligible for any such credit, companies are further required to hand over “all relevant facts about individuals involved in corporate misconduct” to the US Department of Justice.

US Dollar and Gmail snares

Forthcoming instalments of the #GuptaLeaks will further detail the Guptas’ frequent transactions in US dollars – the Guptas’ currency of choice of when moving hundreds of millions of dollars to and from its Dubai bank accounts.

For instance, the #GuptaLeaks reveal that much of cash sloshing through the Dubai accounts are the proceeds of so-called “consulting” contracts such as the China South Rail-Transnet contract previously detailed by amaBhungane.

The #GuptaLeaks also reveal that communications related to the CSR kickbacks were carried out using US-based email providers.

Major US law firm, White & Case, explained how such US-dollar transactions and even emails can put someone within the very long reach of US laws, including anti-bribery laws.

“Many US laws — including the Foreign Corrupt Practices Act in certain circumstances and various antifraud statutes — may establish jurisdiction over a crime whenever it involves the use of any ‘means or instrumentality of interstate or foreign commerce’.

“The term is broadly defined by US authorities and may cover any communication or movement that crosses state or international borders, including wire transfers, emails, phone calls, mail and travel.

“Given the reach of US commerce, from free email servers to correspondent banks that clear US dollars for non-US based banks, such a broad definition can significantly increase the reach of US law.”

Beyond transferring many millions of dollars through US-based correspondent banks, the Guptas, their associates and many political figures linked to them frequently used US-based email providers, such as Gmail, Yahoo and Hotmail.

These US-based email accounts were used to communicate on a wide variety of topics including the Sun City wedding expenses, the near-daily US dollar movements to and from Dubai, as well as to make arrangements with parties in the United States who received funds from the Guptas’ accounts in Dubai.

US money laundering Laws

Regarding US anti-money laundering laws, White & Case notes: “US law makes it a criminal offense to engage in or attempt to engage in a financial transaction involving funds that are known to be the proceeds of certain unlawful activities, or to engage in a financial transaction that provides funds for the commission of a crime (such as terrorist financing or sending a bribe payment).

“This offense is called ‘money laundering,’ and non-US corporations and foreign nationals may be subject to prosecution under US federal anti-money laundering statutes if they are involved in the transfer or attempted transfer of illegally obtained funds or funds used to further criminal activity.”

The Guptas’ forwarding their ill-gotten gains to a US-incorporated company could potentially run afoul of such laws.

AmaBhungane and Scorpio revealed that over US$1-million paid by Swiss crane manufacturer Liebherr ultimately ended up in a US company, Brookfield Consulting, owned by apparent US-citizen relatives of the Guptas.

• Read #GuptaLeaks: More multinationals ensnared in Transnet kickback web 

Roughly another US$9-million – apparently originating with China South Rail’s “consulting” contract – was also wired to Brookfield in the United States.

Conspiracy Charges

Individuals comfortably sitting in South Africa or Dubai might be unaware of the US legal risks created by the actions of merely one member of a broader conspiracy.

White & Case further explains that one link to the United States could expose all members of any broader conspiracy. “Conspiracy law may subject non-US companies or individuals who have not committed an act within the United States to US criminal jurisdiction.

“If the United States can establish jurisdiction over a single conspirator, it may have jurisdiction over all conspirators, whether companies or individuals, wherever they may be found.”

Asset Forfeiture

US officials have described the FCPA and the Kleptocracy Asset Recovery Initiative as “two sides of the same anti-corruption coin.”

Former US Attorney General Loretta Lynch explained: “Since it was established in 2010, the Kleptocracy Asset Recovery Initiative has been an effective tool in our ongoing efforts to curb high-level public corruption around the world. As we move forward, the Department of Justice will remain committed to using all the resources at its disposal to ensure that government funds go to their lawful purposes; that stolen assets are returned to state coffers; and that corrupt officials are held fully accountable for abusing their positions.”

Over the past few years alone, the US has seized many billions of dollars of ill-gotten cash and assets.

Two of the largest seizures – totaling US$2.5-billion to date – involve far-reaching, complex corruption in Uzbekistan and Malaysia.

In Uzbekistan, the daughter of the former president received over US$800-million from telecom companies. US authorities seized US$850-million sitting in accounts in Switzerland, Belgium, Ireland and Luxembourg.

The mere fact that these funds were moved in US dollars – and thus transmitted through the US – was sufficient to seek their forfeiture.

The US Department of Justice noted that the president’s daughter’s “associates laundered the corruption proceeds through accounts held in Latvia, the United Kingdom, Hong Kong, Ireland, Belgium, Luxembourg and Switzerland. The illicit funds were transmitted through financial institutions in the United States before they were deposited into accounts in these countries, thereby subjecting them to US jurisdiction.”

Last month, the US announced the latest in a series of seizures related to Malaysia’s 1MDB scandal – bringing the total grabbed by US authorities in that case alone to $1.7-billion.

The US Department of Justice’s characterization of the Malaysian scheme undoubtedly rings true for many South Africans:

“Today’s complaints reveal another chapter of this multi-year, multi-billion-dollar fraud scheme, bringing the total identified stolen proceeds to $4.5 billion. This money financed the lavish lifestyles of the alleged co-conspirators at the expense and detriment of the Malaysian people. We are unwavering in our commitment to ensure the United States is not a safe haven for corrupt individuals and kleptocrats to hide their ill-gotten wealth or money, and that recovered assets be returned to the victims from which they were taken.”

“These cases involve billions of dollars that should have been used to help the people of Malaysia, but instead was used by a small number of individuals to fuel their astonishing greed.”

“The misappropriation of 1MDB funds was accomplished with an extravagant web of lies and bogus transactions that were brought to light by the dedicated attorneys and law enforcement agents who continue to work on this matter. We simply will not allow the United States to be a place where corrupt individuals can expect to hide assets and lavishly spend money that should be used for the benefit of citizens of other nations.”

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Bank and accounting records show that two heavy equipment manufacturers – Swiss-based Liebherr-International AG and China’s Shanghai Zhenhua Heavy Industries Limited – funnelled *more than R100-million* to the Guptas, as Transnet awarded them contracts to supply cranes to South African ports.

This brings to seven the number of large, mostly respected companies, known to have secretly paid Gupta fronts in connection with Transnet contracts.

A forgotten tipoff

Four years ago, an anonymous tipster told amaBhungane that Transnet crane suppliers were paying off the Guptas to get their contracts.

The tipster said: “The cranes that are being supplied to the ports from [Shanghai Zhenhua] are with Guptas. Ask Liebherr. While they were the preferred supplier, they were approached by Guptas to do a deal who then referred them to their local [black economic empowerment] partners, who in turn spoke to [then Public Enterprises Minister] Malusi Gigaba. By then Guptas had done a deal with [Shanghai Zhenhua].”

Days before the tipoff, Gigaba and then Transnet CEO Brian Molefe had stood side-by-side, grinning behind a giant red ribbon, which Gigaba cut in presentation of seven new Shanghai Zhenhua cranes for South Africa.

On the day, Molefe told reporters the tender was “transparent”.

Molefe later moved to Eskom, which he recently left in disgrace after evidence emerged that he courted the Guptas while Eskom and Transnet closed allegedly dirty deals for the Guptas.

On Saturday, Transnet spokeswoman Viwe Tlaleane said: “The company is conducting its own internal enquiry and will investigate all allegations made. Where appropriate, it will enlist the services of independent experts, depending on the required expertise”.

Liebherr executive Dieter Schmid said: “I can assure you that Liebherr has never had an ‘extensive and direct relationship with the Guptas for years’ as alleged in your e-mail.” But he said the company was “still putting the pieces together” and needed more time.

Shanghai Zhenhua did not respond to questions.

Paying to play

As was claimed by amaBhungane’s tipster, Liebherr’s Gupta payments were indeed preceded by roughly R55-million from the Chinese. In September 2011, Transnet announced that Shanghai Zhenhua would build, deliver and commission seven tandem-lift ship-to-shore cranes for the container terminal at Durban harbour.

According to Transnet documents obtained by amaBhungane, it would pay Shanghai Zhenhua $92-million (about R1.2-billion today) for the job.

Three months later, money started to flow to the Guptas.

Shanghai Zhenhua paid the first tranche of US$969 086 (R12.6-million) that December. According to the Guptas’ accounting records, it went to a United Arab Emirates-registered company called JJ Trading.

JJ Trading has also featured prominently in another Transnet kickback scheme. The #GuptaLeaks reveal China South Rail entered into a “consulting” agreement with JJ Trading, related to Transnet’s 2013 locomotive tender, and paid JJ Trading over US$107-million (R1.4-billion).

• Read the Transnet-related #GuptaLeaks here.

For every tranche of cash received from Shanghai Zhenhua, JJ Trading transferred exactly 4% to a person called “David”, sometimes as cash. The rest flowed to Gupta front companies in the UAE and South Africa.

For example, at the end of January 2013, Shanghai Zhenhua paid US$1.2-million (R15.6-million) to JJ Trading.

Within days, JJ Trading paid US$743 815 (R9.7-million) to Global Corporation LLC’s National Bank of Abu Dhabi account. Global is beneficially a Gupta company. JJ Trading paid another US$256 130 (R3.3-million) to Global’s US Dollar account at Standard Chartered.

In all, Shanghai Zhenhua paid at least US$4.2-million (R54.6-milion) to JJ Trading over 14 months, of which 15% stayed with JJ, 4% was paid to “David”, and the rest went on to the Guptas.

The records also reveal how a confidential Transnet document, related to the subsequent tender for 22 cranes that Liebherr won, had been leaked to the Guptas. It is not clear how, but a top Gupta executive then emailed the document to an Indian national associated with JJ Trading.

Déjà vu

This is not the first time Liebherr has popped up on amaBhungane’s radar.

Last October, amaBhungane linked Liebherr to another apparent Transnet kickback scheme.

AmaBhungane’s investigation revealed that in March 2015, Burlington – a subsidiary of advisory firm Regiments Capital – signed a R5-million contract with Liebherr-Africa to provide it with “market feasibility studies” in relation to the supply of cranes to Transnet.

Liebherr made a R2-million down payment to Burlington, which paid exactly 90% straight on to a Gupta front, Homix.

At the time, Liebherr told amaBhungane that Homix was unknown to it.

It is now clear that Liebherr’s R2-million laundered to Homix was just the tip of the iceberg. The #GuptaLeaks reveal that the family received roughly *$4.2-million (R55-million)* from Liebherr over the course of a year and a half.

Bank records show that in July 2013 Liebherr paid US$905 000 (R11.8-million) to another of the Guptas’ UAE front companies, Accurate Investments.

If Accurate sounds familiar, that is because the Guptas also used it to launder the Free State government’s money to pay for their niece’s notorious Sun City wedding.

On 17 February 2014 – the same day that Liebherr announced it had scored the 22-crane Transnet contract – Liebherr paid Accurate another US$202 008 (R2.6-million).

Liebherr’s cash lands in the US

Although the South African Revenue Service, Hawks and National Prosecuting Authority remain unmoved by the #GuptaLeaks revelations, the shadow of US regulators potentially looms large .

• Read “The Almighty Dollar”

A significant portion of Liebherr’s cash transferred to Accurate was quickly passed along to relatives of the Guptas in the US.

In May 2014, Liebherr made three more payments to Accurate totalling US$1 105 368 (R14.4-million).

On 28 May 2014, two days after Liebherr’s last wire hit Accurate’s account, Accurate bundled Liebherr’s money with other funds and wired it all to Brookfield Consultants Inc in the US.

According to its website, Brookfield specialises in healthcare consulting.

Records obtained by amaBhungane show that Brookfield, incorporated in Texas, is managed by Ashish and Amol Gupta. In correspondence Ashish and Amol Gupta refer to Rajesh “Tony” Gupta as “Respected Tony Uncle”.

Documents contained in the #GuptaLeaks reveal that Ashish and Amol Gupta were respectively 27 and 23 years old at the time Accurate transferred Liebherr’s cash to Brookfield’s account at JPMorgan Chase Bank in New York.

Neither Ashish nor Amol Gupta, nor their father Ramesh, who provided Tony Gupta with Brookfield’s bank account information, responded to any of amaBhungane’s attempts to contact them.

The ever-expanding feeding trough

We have seen no specific evidence of Transnet rigging the crane tenders to favour Liebherr and Shanghai Zhenhua.

However, the payments to offshore Gupta fronts and contemporaneous contract awards trace a Transnet tender pattern that is now well known. Liebherr and Shanghai Zhenhua bring the number of Transnet contractors who have paid the Guptas or partnered with their companies to seven.

SAP: Last week, amaBhungane and Scorpio revealed that German software multinational SAP paid R100-million to Gupta-linked CAD House.

Despite strident denials of wrongdoing from SAP’s local managing director following these revelations, SAP’s international headquarters quickly suspended four South African executives and announced it had hired US law firm Baker McKenzie to investigate.

China South Rail: Last month, amaBhungane and Scorpio exposed a R5.3-billion kickback contract between China South Rail (CSR) and a Gupta company in Hong Kong, after CSR won contracts worth roughly R25-billion to supply Transnet with locomotives.

The contract and other #GuptaLeaks accounting records describe how CSR initially paid JJ Trading and a related Dubai company $124-million (more than R1.6-billion) kickbacks for these contracts. The funds were passed on to Gupta companies.

Recall that Shanghai Zhenhua also paid JJ Trading before the money flowed to the Guptas. In light of the CSR kickback documents, it is possible that similar agreements underlie Shanghai Zhenhua and Liebherr’s crane contracts.

McKinsey: Last year, amaBhungane reported how global consultancy McKinsey won Transnet contracts that were gradually ceded to Regiments Capital and the Gupta-linked group Trillian, which marched off with Transnet contracts worth at least R484-million. Regiments in turn paid R84-million to the Gupta front Homix.

A recent investigation by Advocate Geoff Budlender exposed how McKinsey partnered with Trillian, in a “sham” contract that would milk Eskom.

Neotel: In 2015, amaBhungane exposed how telecoms firm Neotel paid tens of millions of rands in “commissions” to Homix to clinch deals worth more than R2-billion from Transnet.

T-Systems: Questions have also been raised about German IT company T-Systems’ contracts with Transnet and Eskom. T-Systems’ supplier development partner Sechaba Computer Services also paidHomix.

Former Transnet CEO Brian Molefe and CFO Anoj Singh were in charge through most of this. They moved together to Eskom in 2015, where more questionable Gupta deals have been publicly identified.

The investigations multiply

This week, Transnet was the latest company to promise an investigation.

Spokeswoman Viwe Tlaleane told amaBhungane: “Transnet notes recent reports based on leaked emails.

“Some of these reports cast aspersions on the integrity of the company’s governance processes, especially relating to procurement. Transnet views good governance and the integrity of its processes seriously. In this regard, we have put in place various measures to safeguard this integrity. Any breach or allegation of breach is viewed in a serious light.

“Transnet did not make any payments to third parties and has no knowledge of the alleged transactions. Part of the company’s investigation entails approaching suppliers for their perspective on the allegations.

“Should any actionable facts arise, remedial action will be taken.”

KPMG see no evil – Part 2KPMG see no evil – Part 2

For the second time, the #GuptaLeaks show what look like kickbacks flowing into a Gupta company audited by KPMG.

AmaBhungane recently reported how, in the 2014 financial year, public money meant for a community dairy in the Free State was circulated offshore before being channelled through Accurate Investments in Dubai to Linkway in South Africa.

Both companies are Gupta-owned, and KPMG audited Linkway at the time.

The Guptas used some of dairy money to pay for their now notorious Sun City wedding, which KPMG allowed them to write off as a business expense.

To justify this tax write-off, KPMG later claimed that, based on facts known to it, Accurate was not a Gupta company but was “related to” the father of the Sun City bride.

AmaBhungane has yet to discover anything among the millions of pages of documents contained in the #GuptaLeaks to support this.

Crane manufacturer Liebherr’s cash followed the same trail.

Liebherr sent the money to Accurate in Dubai, where it was quickly bundled with other funds flowing through the Guptas’ Dubai bank accounts and, in part, laundered to South Africa.

In one instance – on 25 February 2014 – Accurate wired money to the Guptas’ Linkway Trading [link 140227 Email Linkway Consultancy Payment to Accurate.pdf] purportedly for “consulting” services.

KPMG did not respond to amaBhungane’s questions about Accurate’s popping up yet again in Linkway’s accounts.

In sum – during the financial year ending 28 February 2014 – funds originating from at least two government entities, the Free State and Transnet, were laundered via Accurate in the UAE to Linkway on KPMG’s watch.

KPMG previously said: “We stand by our audit opinion issued.”

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• 

With €22-billion (about R330-billion) in revenue last year, German software multinational SAP should have all the expertise it needs to close major deals.

Instead, the #GuptaLeaks and related information show, the world’s third largest software company is not above calling in help from the politically connected, risking contravention of international anti-bribery laws.

AmaBhungane and Scorpio can reveal that in August 2015, SAP signed a “sales commission agreement” with a small Gupta-controlled company that specialises in selling 3D printers.

The terms suggest a thinly disguised kickback arrangement: If the Gupta company were the “effective cause” of SAP landing a Transnet contract worth R100-million or more, it would get 10%.

In the year to follow, SAP paid the company, CAD House, a whopping R99.9-million, suggesting SAP used the Gupta influence network to drive sales of a billion rand to Transnet and other state-owned companies.

SAP denies it paid kickbacks or was party to laundering the payments, arguing that CAD House had “the necessary skills in terms of positioning our solution” and was paid a sales commission for acting as “an extension of the sales force”.

But there are factors suggesting that SAP’s denial does not hold water: There is no evidence that CAD House had any experience marketing or selling SAP software. And CAD House appears to have been used as a front, both to distance the transaction from the Guptas and to launder the proceeds to them.

Neither CAD House nor the Gupta family responded to detailed questions.

Strategic customer

In 2014, Transnet was considered so key to SAP’s business that it was defined as a “strategic customer” – a designation given to just 300 out of 197,000 SAP customers worldwide, according to an SAP presentation found in the #GuptaLeaks.

Despite its special relationship, SAP was seemingly having trouble closing deals with Transnet and turned to the Guptas for help, the trove shows.

CAD House, which specialises in selling 3D printers, is not widely known to be part of the Gupta empire. At the time it was, on paper, half owned by Santosh Choubey, a key Gupta lieutenant employed by their Sahara Systems.

Minutes and other #GuptaLeaks records show, however, that CAD House was managed as a subsidiary of the Sahara group – indicating that beneficial ownership rested with the Guptas themselves.

In an interview, SAP South Africa chief financial officer Deena Pillay claimed that CAD House was no different to other sales agents SAP uses. “They’re small guys who would go out there, identify business and come to SAP with that opportunity. It’s a lever available to SAP to sell its software… We’ve got a sales force that we employ, so these are the agents on the ground… They are an extension of the sales force.”

In SAP’s world, commission agreements are not unusual. Except in this case Transnet was already a client of SAP and the commission agreement with CAD House made it clear SAP was not so much hiring a sales agent to market a product to Transnet as a fixer to clinch the deal.

The commission agreement was signed on 20 August 2015 by Pillay and another senior SAP executive. It promised CAD House 10% if CAD House was the “effective cause” of Transnet signing a R100-million-plus deal with SAP.

CAD House’s “main purpose”, it specified, “is to assist [SAP] in obtaining Customer consent to the Customer Contract and Customer’s requisite signatures to such agreement”.

Due diligence

SAP’s Pillay told us that an “external reputable company” did a “rigorous due diligence” on CAD House before the agreement was signed. Pillay’s colleague Candice Govender, who is SAP South Africa head of legal, confirmed that SAP was aware CAD House was connected to Sahara, but found “no red flags”.

Yet, by the time SAP signed the commission agreement in August 2015, the red flags were in plain sight.

Three weeks earlier, amaBhungane and the Mail & Guardian had revealed how telecoms firm Neotel agreed to pay letterbox company Homix R104-million in what were also termed “commissions” – clearly kickbacks – to land Transnet contracts.

Our exposé at the time showed that a Gupta man was behind Homix. Immediately after the exposé, Neotel’s chief executive and chief financial officers went on “special leave”, ultimately to lose their jobs.

• Read ‘Kickback’ scandal engulfs Transnet here

Two possibilities present themselves: Either SAP ignored the obvious red flags about the Guptas’ alleged involvement as fixers at Transnet, or it signed up for exactly the same service.

In a settlement with the US Securities and Exchange Commission last year, SAP agreed to pay a $3.9-million fine after a senior SAP official paid bribes for state business in Panama via a local partner.

The SEC had jurisdiction because of SAP’s secondary listing on the New York Stock Exchange.

The road to closure

Even for questionable commission agreements, 10% appears to be high. One industry insider put the usual “fixer” fee at closer to two or three percent. With the Neotel deals, Homix was to receive roughly 5% of the roughly R2-billion Transnet contract value.

But SAP not only wanted a Transnet deal worth a minimum of R100-million, it wanted it signed within just one month.

In an attached timeline of deliverables, referred to in the commission agreement as the “Road to Closure”, CAD House and Choubey were expected to secure a meeting with Transnet chief financial officer Garry Pita within just three days to “position the financial benefit” of SAP’s proposal.

After that it was not a sales effort, but one simply of getting Pita and Transnet to give the necessary approvals. The timeline provided that Pita would have the required R100-million-plus “budget reallocated for capital approval” only a week later.

By 21 September 2015, a month after SAP signed the commission agreement, CAD House was expected to “fast-track and attempt to obtain contract signature” from Pita and Transnet’s chief information officer – although it had leeway until the end of December still to qualify for the commission.

While there is scant information in the agreement about how CAD House would work such a miracle, the agreement – in common with many commission contracts – contained extensive anti-bribery clauses, making CAD House promise that it would not pay any money in turn to government, state-owned company or party officials.

But the circumstances suggest this was little more than a fig leaf.

Fronting for the Guptas

The evidence suggests that CAD House was interposed as a front to avoid exactly the kind of red flags that the Guptas as politically connected persons would have raised during a due diligence.

For a company with a turnover of less than R20-million and struggling to make any profit at all, the prospect of millions in commission should have been a major development.

Yet, #GuptaLeaks minutes of monthly CAD House meetings straddling the date of the commission agreement make no mention of the expected windfall. The meetings, at Gupta holding company Oakbay Investment’s Sandton offices, were attended by both Sahara and CAD House officials and discussed revenue-generating proposals for the latter.

A CAD House budget signed off in February 2016 – six months after the commission agreement was signed and shortly before SAP’s payments were to start rolling in – made no mention of the income either.

As we shall see, this was with good reason: SAP’s payments were not to stay with CAD House, but flow straight out to other Gupta companies.

Although SAP vehemently defended the decision to hire CAD House, Pillay and Govender seemed unable to explain why a company that sells 3D printers was an ideal partner for a complex software deal.

“We were doing a proof of concept and CAD House was an existing vendor at Transnet and we were looking at doing 3D models for these guys to show them the value and the benefit of using our solution,” Pillay told us.

When pushed for further detail of what SAP product required it to be modeled in 3D, Pillay said: “[The deal] was about Transnet in terms of the rail infrastructure, the way the operations work, the yards, the trains – all of that these guys were able to do the necessary 3D modelling as well as being able to position the SAP solution.”

When we pointed out that CAD House’s speciality is selling printers that make physical 3D models, Govender deflected: “At the end of the day they [CAD House] were vetted internally and externally; SAP was happy that they added value; [Transnet] was happy that they added value… Look, you have the CFO and SAP head of legal in front of you… If you need more technical detail you don’t have the right people in front of you.”

There are compelling reasons to be sceptical of SAP’s explanation:

One, Pillay signed the commission agreement on behalf of SAP and would surely have been privy to why SAP was giving away 10% of a minimum R100-million deal.

Two, If SAP honestly did want plastic models of its software solution it could have bought them at a fraction of the cost.

And three, despite Pillay maintaining that SAP engaged CAD House because of its “existing relationship [and] understanding the processes within Transnet”, Transnet denied it had any relationship with CAD House whatsoever.

Pita, the Transnet chief financial officer and “Road to Closure” target of SAP and CAD House’s lobbying efforts, wrote in reply to our questions: “According to our records, Transnet has not conducted business with CAD House. I have never heard of CAD House or dealt with them, nor have I had any discussions with a Mr Choubey about them.

“I have never been approached by CAD House or Mr Choubey to discuss Transnet’s contract with SAP or SAP’s services and products. I have not met with any third party to discuss contracts between Transnet and SAP.”

All in all, a more plausible explanation for the payments to CAD House may be that SAP willingly entered into a kickback agreement where both parties knew the Guptas, not CAD House, were to receive SAP’s millions and use their politically-derived influence to secure business for SAP. This is supported by what happened in the run-up to the deal.

The start of a beautiful friendship

The #GuptaLeaks show that Lawrence Kandaswami, SAP South Africa’s managing director, was the software multinational’s key contact with the Guptas.

As far back as 2014, when he was still SAP’s account director responsible for Transnet, Kandaswami exchanged emails with Choubey, who used his Sahara Systems email address.

At the time, SAP was trying to close a separate deal with Transnet to buy SAP Hana, a database management product.

A day after meeting with Transnet, Kandaswami forwarded Choubey the SAP presentation marked “strictly confidential”, detailing the proposed deal.

Kandaswami’s message read: “This is to prompt movement on the opportunity.” Choubey immediately forwarded the email to Salim Essa, with a note saying: “Sir – FYI – Supporting for Hana from SAP.”

Essa, a key Gupta lieutenant, has often been the family’s most direct point of contact at Transnet and Eskom.

The #GuptaLeaks do not show what Essa did after receiving Kandaswami’s email but Transnet confirmed that it agreed to go ahead with the proposed SAP Hana deal in late 2014.

By February 2015, Kandaswami had been promoted to SAP South Africa’s head of public sector, according to his LinkedIn profile. Both Transnet and Eskom’s accounts were now under his purview.

There are indications that a similar role was played at Eskom too.

On 17 February 2016, the #GuptaLeaks show, Choubey scheduled a meeting between Sahara and SAP. Two weeks later, on 2 March, Kandaswami emailed Eskom chief financial officer Anoj Singh, head of procurement Edwin Mabelane and head of generation Matshela Koko about an urgent deal for Eskom to acquire SAP Hana.

The offer would expire, he warned, at the end of March unless Eskom seized the opportunity.

In a pattern that has now become familiar, Kandaswami almost immediately forwarded this email to Choubey, who forwarded it to one of the Gupta brothers’ adult children.

Eskom spokesperson Khulu Phasiwe confirmed that Eskom signed two contracts with SAP during 2015 and 2016, but declined to provide any further detail, citing a confidentiality agreement signed with SAP.

Shortly after these exchanges took place, Kandaswami was promoted to managing director for SAP South Africa.

R99.9m payday

Following the signing of the Transnet commission agreement, the money started flowing to CAD House – and straight out again.

The first SAP payment we know about landed in CAD House’s bank account in April 2016. The R17-million did not stay there long; on the same day R2-million was transferred out to Sahara Computers and R2.3-million to an obscure Eastern Cape company whose owner we have been unable to trace.

Within five days another R10-million was transferred out: R9-million to Sahara Computers and a million to Baroda, the Guptas’ bank of choice.

A similar pattern was repeated that July when R9.2-million came in from SAP. Within two days, R7.7-million bounced to Sahara Systems and R1.1-million to the Eastern Cape company.

In December that year, a massive R73.7-million rolled in from SAP. Within a fortnight, R71.1-million had gone out to three companies in the Sahara orbit: Cutting Edge, Futureteq and Sahara Systems.

All in all, we identified R99.9-million in SAP payments of which only R5.7-million did not flow straight out.

The amount appears not to relate only to the R100-million minimum Transnet contract that was the subject of the commission agreement we know about. Pillay and Govender confirmed that SAP paid CAD House in respect of “other customers” too, but refused to give details, citing client confidentiality.

This pattern, of money being cycled through Gupta-controlled accounts at a rate that defies all commercial reason, has become familiar through the #GuptaLeaks.

When we put it to SAP that it may have become party to a money laundering scheme by contracting with CAD House, Govender objected strongly, saying: “We are not aware of any payments being made to Sahara or anybody else. Our contract is with CAD House.”

Pillay added: “What the partner does with their money I have no control over. If you say these guys pass the money up the line, I have no control over that, I have no visibility over that.”

SAP may end up having to explain that to the Securities and Exchange Commission too, which will have SAP on a watch list after last year’s settlement over bribery in Panama. In that matter, the SEC found that SAP “failed to devise and maintain an adequate system of internal accounting controls” to prevent bribery.

Transnet did not respond to questions other than to mirror Pita’s comments, saying it had “never conducted any business with CAD House. The company is not aware of CAD House’s involvement with SAP or Mr Choubey”.

Detailed questions were sent to SAP’s Kandaswami and Sahara’s Choubey, but neither responded.

In a written statement, Govender said: “SAP is dedicated to conducting every aspect of our business responsibly and in accordance with the highest legal standards… With regard to CAD House and SAP SA Business Development Partners in general, please note that any selected SMMEs and/or partners are verified, both in terms of SAP’s rigorous internal forensic procedure as well as by an independent forensic law firm.”

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In a scheme so audacious and lucrative that it puts the notorious arms deal to shame, they:

• Entered kickback agreements totalling R5.3-billion with the Chinese manufacturer that became Transnet’s favourite locomotive supplier;
• Influenced procurement processes through their associates at Transnet;
• Are pocketing R10-million from each R50-million locomotive that Transnet is buying.
  

This story presents the most direct evidence yet of the Guptas and their associates amassing fortunes offshore by tolling contracts at state-owned entities they control.