Down the Guptas’ Financial Rabbit Hole
19 Sep 2019

Members of South Africa’s controversial Gupta family have long been implicated in a series of corrupt political connections and illegal deals that have earned them millions, often in government funds. The influence of the family, now reportedly in exile in Dubai, is so all-pervasive that the affair is widely known as the “state capture scandal.”

OCCRP has previously reported how Gupta-linked firms and operators extracted money from a state transport infrastructure company, profited from a corrupt locomotive tender, exploited a compliant bank, and emptied part of a pension fundfor state workers using insider information. The total amount of money allegedly stolen by the Guptas and their associates reaches into the hundreds of millions of dollars.

What’s been largely unreported is what happened to this money after it was safely out of the reach of the state.

The matter is much more than an intellectual exercise. After the country’s high court recently ordered Trillian, an investment firm at the center of the Guptas’ web, to repay 595 million rand (US$41 million) unlawfully taken from the state electricity company, it emerged that the money was no longer in the firm’s accounts.

Now, having exclusively obtained a Trillian server containing more than three million documents, including memos, invoices, and internal emails, OCCRP has been able to piece together where at least a portion of the Guptas’ millions went between 2014 and 2017.

Under Trillian’s direction, the money was cycled through a network of 10 shell companies and consulting firms that held accounts at South African and international banks. The money, which also passed through a Bermudan group of companies, ended up as far afield as India and Dubai.

Intra-company and shareholder loans appeared to be a key mechanism for the laundering of the money, which in some cases was repeatedly moved from firm to firm, obfuscating its origin.

The new findings account for how the Guptas acquired a large portion of their fortune, mainly through inflated contracts with state-owned entities such as Eskom, the state electricity provider. South Africa’s High Court has ruled that the deals were illegal. The 595 million rand ($41 million) sought by the court, and paid to Trillian in tranches, are among the newly revealed transactions.

Though Trillian is difficult to link to the Guptas directly — the family is known to work through trusted associates — exclusive, newly revealed emails appear to show one “R P Gupta” communicating personally about the deals. The name may refer to Rajesh Gupta, the youngest of the brothers.

In addition to sending millions to offshore firms, Trillian appears to have spent or laundered even more through various other schemes, including paying exorbitant service fees to consultants. By working with KF Investments, a Johannesburg-based investment firm, Trillian even managed to buy and hold shares in major global businesses including Woolworths Holdings and British American Tobacco.

The Guptas’ dealings were aided by other businesses. Stein Scop Attorneys, a Johannesburg-based law firm located near Trillian’s high-priced offices, was the attorney of choice and record for most of the deals. The firm received over 100 million rand ($7.6 million) from Trillian and held it in trust accounts.

The Center of the Web

Trillian, an unassuming investment firm once headquartered in Johannesburg’s swanky Melrose Arch neighborhood, is the key instrument of the Guptas’ dealings. Spun out of Regiments, another key piece of the empire that featured heavily in earlier reporting about the Guptas, the firm took over the company’s trade in securities.

Trillian oversaw the network of consultancies and shell firms that helped the Guptas shift their gains. According to documents found on the company’s server, it was both the sender and the recipient of the key transactions, which include millions from Eskom and other sources:

  • Trillian received $41 million from Eskom, the state electricity firm, in illegal contracts. This theft has been widely reported and is now the subject of a judgement by the High Court. New documents reveal that over 300 million rand ($20.4 million) of this money was paid into the accounts of nine firms overseen by Trillian and controlled by the Guptas. Millions were then recycled back to Trillian to help disguise the money’s origin. A further 205 million rand ($15.3 million) was paid out to Trillian’s Bank of Baroda account in South Africa and another company in the group, Trillian Shared Services. The remainder was directly paid out to Gupta lieutenants.
  • Trillian received just over half a billion rand ($30 million) in loans from three firms controlled by Gupta associates: Centaur, Cutting Edge, and Albatime. In all three cases, the loans may not have been intended to be repaid, and may represent the laundering of funds initially sent to these firms by Trillian itself. Part of the money originated from a separate Eskom payment revealed in a previous OCCRP investigation. The remainder came from other public entities such as Transnet, a state-owned transportation company.

By Khadija Sharife and Mark Anderson, OCCRP, 18 September 2019

Read more at OCCRP

Photo (edited): Gryffindor [CC BY-SA 4.0], via Wikimedia Commons

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