JOHANNESBURG 19 FEBRUARY 2022
https://shadowworldinvestigations.org/projects-and-publications/the-state-capture-project/
https://shadowworldinvestigations.org/wp-content/uploads/2020/09/SWI_Zondo_Submission_Gupta_Enterprise_Transnet.pdf
GUPTA
ENTERPRISE
AND THE
CAPTURE OF
TRANSNET
SUBMISSION TO
THE COMMISSION
OF INQUIRY INTO
ALLEGATIONS OF STATE
CAPTURE
Large text
The mission of Shadow World
Investigations is to detail and expose
the illicit and/or unethical corruption of
government by corporate actors and
their enablers. We do so by highlighting
the impact of the blurred line between
business and politics on democracy,
human rights, the rule of law, the
environment and just and equitable
development. This exposure serves to hold
the powerful to account, and to create
momentum for progressive change.
A submission by Shadow World Investigations
to the Zondo Commission in September 2020.
Editor and Researcher: Paul Holden
Design: Gaelen Pinnock | www.polygram.co.za
Copyright: Shadow World Investigations (2020)
7 Cavendish Square,
Marylebone,
London
W1G 0PE
www.shadowworldinvestigations.org
1
Executive Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05
CNR, CSR, CRRC and ZPMC Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 05
The First Laundromat: The Worlds Window Group. . . . . . . . . . . . . . . . . . . . . . . . 06
The Second Laundromat: The Hong Kong Machine. . . . . . . . . . . . . . . . . . . . . . . . 07
The Third Laundromat: Habib Bank. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08
Payments Made by Liebherr Cranes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 08
Conclusion and Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
List of Annexures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
About Shadow World Investigations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Sources and Admissibility. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
The Capture of Transnet and the
Gupta enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.1. Racketeering and the Gupta Family ‘Enterprise’. . . . . . . . . . . . . . . . . . . . . . . 19
2.2. Understanding the Gupta enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2.3. Companies and Individuals Receiving Funds from the HSBC/Hong Kong
Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.4. The Connections between the Gupta enterprise and key Transnet
contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Known Agency and/or Bribery/Kickback
Agreements in Relation to ZPMC and China
South Rail. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.1. ZPMC Agreement with JJ Trading FZE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
3.2. Exclusive Agency Agreement between CNR (Hong Kong) and Century
General Trading: 14 April 2012. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
CONTENTS
Section 1:
Section 2:
Section 3:
2 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET
3.3. Exclusive Agency Agreement between CNR (Hong Kong) and Century
General Trading: 8 July 2013. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3.4. Exclusive Agency Agreement between CNR (Hong Kong) and Tequesta
Group Limited: 20 May 2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
3.5. Exclusive Agency Agreement between CNR Dalian Locomotive and
Rolling Stock Co. Ltd and Regiments Asia Limited: 20 May 2014/25 November
2014. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
3.6. Business Development Agreement between CSR and Regiments Asia
Limited: 10th February 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
3.7. Business Development Services Agreements between CNR Rolling Stock
South Africa and Bex Structured Products, 8 March 2015 and 25 April 2015. 31
3.8. The CSR-Tequesta Agreement: 18 May 2015. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.9. The CSR-Regiments Asia Payment Agreement: 10 June 2015. . . . . . . . . . . 35
3.10. The CSR Payment Schedule. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.11. Addendum to Agreements between CRRC, Regiments Asia and Tequesta
Group: August 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
3.12. Addendum to the Agreement between CRRC Zhuzhou Locomotive and
Regiments Asia: August 2016. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
3.13. Summary Table of Agreements and Anticipated Fund Flows. . . . . . . . . . . 40
Payments Made to the Gupta Enterprise by
Liebherr Cranes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.1. Payments Made to the Gupta Enterprise by Liebherr Cranes. . . . . . . . . . . 44
4.1.1. Source and Records from the #Guptaleaks Relating to Payments from
Liebherr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.1.2. Tracing the First Liebherr Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
4.1.2. Tracing the Second Liebherr Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
4.1.3. Tracing the Third Liebherr Payment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
4.1.4. Tracing the Fourth Liebherr Payment Tranche. . . . . . . . . . . . . . . . . . . . . . . 51
4.1.4. Tracing the Fifth Liebherr Payment Tranche. . . . . . . . . . . . . . . . . . . . . . . . . 54
4.2. The Relationship between Accurate Investments and Liebherr Cranes 55
Transnet, the Gupta Enterprise and the Worlds
Window Network. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
5.1. The Worlds Window Network: Relevant Companies. . . . . . . . . . . . . . . . . . . . 59
5.2. The Worlds Window Network: Key Personnel. . . . . . . . . . . . . . . . . . . . . . . . . 61
5.3. The Worlds Window Front Companies: JJ Trading FZE and Century
General Trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.3.1. JJ Trading FZE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
5.3.2. Century General Trading. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.4. The Nature and Development of the Relationship between Worlds
Window and the Gupta enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Section 4:
Section 5:
Contents – 3
5.4.1. Earliest Direct Mentions of Piyoosh Goyal and Worlds Window Group 66
5.4.2. The Relationship Between the Gupta Enterprise and the Worlds
Window Network: Introducing the ‘hawala ledger.’. . . . . . . . . . . . . . . . . . . . . . . . 66
5.4.3. Investments Made by the Worlds Window Group into the Gupta
Enterprise. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
5.4.4. Prima Facie Evidence of the Involvement of Worlds Window and the
Gupta Enterprise in Money Laundering Activities: The Westdawn-Everest
Loan-Back Scheme. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
5.4.5. Prima Facie Evidence of the Involvement of Worlds Window and the
Gupta Enterprise in Money Laundering Activities: A Potential Arctos LoanBack Scheme?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
5.4.6. Prima Facie Evidence of the Involvement of Worlds Window and the
Gupta Enterprise in Money Laundering Activities: Clean Laundry in Seven
Days. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
5.4.7. Prima Facie Evidence of the Involvement of Worlds Window and the
Gupta Enterprise in Money Laundering Activities: The South African Cycle 79
5.5. The Receipt of Funds by the Worlds Window Network from ZPMC. . . . . . 80
5.6. Deposits Received by the Worlds Window Network/Century General
Trading from China South Rail Related to the 95 Locos Contract. . . . . . . . . . . 81
5.7. Circumstantial Evidence Regarding the Payment of Funds from CSR
Related to the 359 and 100 Locomotive Contracts to the Gupta Enterprise via
Worlds Window. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
5.8. The Difficulty of Tracing ZPMC and CSR Funds. . . . . . . . . . . . . . . . . . . . . . . . 84
The Receipt and Dissipation of Funds from China
South Rail and China North Rail to Tequesta and
Regiments Asia via HSBC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
6.1. Tequesta Group Limited and Regiments Asia. . . . . . . . . . . . . . . . . . . . . . . . . . 86
6.2. The Hong Kong Banking Records: Payments Made by CSR, CNR, Da Lian
and CRRC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
6.3. Tracking Payments to Regiments Asia and Tequesta Group against Known
Kickback Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89
6.4. The Hong Kong Banking Records: The Dissipation of Kickbacks by
Tequesta Group and Regiments Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90
6.4.1. Payments to Individuals by Regiments Asia and Tequesta Group. . . . . . 90
6.4.2. Recipients of Over $1m from Tequesta Group or Regiments Asia. . . . . . 91
6.4.3. Companies Paid by Regiments Asia, Tequesta Group and Morningstar
International. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
6.4.4. The Use of Chinese Mainland Companies with Ties to South Africa. . . . 93
6.4.5. The Use of Hong Kong Shell Companies to Receive Payments from
Tequesta Group and Regiments Asia. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
6.4.6. The Plethora of Money Laundering Red Flags and the Role of HSBC. . . 98
6.5. Concluding Remarks: The Hong Kong Laundromat. . . . . . . . . . . . . . . . . . . 100
6.6. The Continuation of the Transnet Bribery Scheme in Dubai. . . . . . . . . . . 101
THE CAPTURE OF
TRANSNET AND THE
GUPTA ENTERPRISE
2.1. RACKETEERING AND THE GUPTA
FAMILY ‘ENTERPRISE’
1. In Section 2 of our first submission on the Estina/Vrede Dairy Project
case, we set out our reading of the Gupta State Capture project as a form
of racketeering undertaken by what we call the Gupta enterprise. We do
not repeat that discussion here, but humbly refer the Commission to it
so that this submission can be read in light of our arguments.
2.2. UNDERSTANDING THE GUPTA
ENTERPRISE
2. In Section 2 of our first submission on the Estina/Vrede Dairy Project
case, we outlined our understanding of the shape, nature and content of
the Gupta enterprise in general terms. We do not repeat it in detail here.
However, we humbly direct the Commission to the relevant section in
that submission so that the below can be understood in context.
20 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET
3. Nevertheless, it is useful to reiterate certain key features of the Gupta
enterprise. In particular, we note that:
a. The Gupta family enterprise exists de facto not de jure;
b. The existence of the enterprise is inferred from observing a pattern
of racketeering activity;
c. The enterprise can (and does in this instance) engage in both
legitimate business activity and criminal endeavours;
d. The object of the enterprise was to generate the maximum benefit
for the enterprise itself, the Gupta family and its employees and
associates;
e. The legitimate businesses included in the Gupta enterprise were used,
inter alia, to facilitate racketeering activities, including disguising
criminal activities behind a veneer of respectability or absorbing and
distributing funds derived from criminal activity;
f. The enterprise consists of a wide range of individuals, companies and
other associations, some of which appear to be, on the surface, separate
and distinct service providers but who were, instead, employees
or associates of the racketeering enterprise ultimately taking de
facto direction from the Gupta family or their representatives and
associates;
g. These employees and associates must, by logical inference, include
those government officials and state employees we identify further
below, who were instrumental in awarding the Gupta enterprise
government contracts.
4. Based on the available evidence, we have identified a number of
individuals and companies, all part of the Gupta family enterprise, that
participated or were ‘activated’ in relation to the conceptualisation,
initiation, and management of the Transnet capture project, including
the process of laundering and integrating proceeds of crime. Short
biographies of each party are given in the dramatis personae attached as
an Annexure to this submission. We draw attention to them here, where
we have additionally bolded ‘key players.’
a. Individuals: Gupta Family
I. Gupta brothers (Ajay, Rajesh and Ashu)
II. Gupta, Ashish
III. Gupta, Amol
IV. Singhala, Kamal
b. Individuals: Gupta Enterprise Employees in South Africa
I. Chawla, Ashu
II. Essa, Salim
III. Singh, Aashika
c. Individuals: Gupta Enterprise Employees Based Abroad
I. Grover, Sanjay
d. Individuals: Transnet Officials
I. Molefe, Brian
II. Seleke, Mogokare Richard
III. Sharma, Iqbal
IV. Singh, Anoj
e. Individuals: Worlds Window Network
I. Agrawal, Amit
II. Agrawal, Naveen
III. Bansal, Rupesh
IV. Bansal, Shuchi
Section 2 – 21
V. Goyal, Piyoosh
VI. Jagati, Ram Ratan
VII. Puri, Pooja
VIII. Tewari, Lalit
f. Companies: South African Companies Controlled Directly or
Through Factotums by the Gupta Enterprise
I. Idwala Coal (South Africa)
II. Islandsite (South Africa)
III. Micawber 480 (South Africa)
IV. Micawber 495 (South Africa)
V. Oakbay Investments (South Africa)
VI. Sahara Computers (South Africa)
VII. Tegeta Exploration (South Africa)
VIII. Westdawn Limited trading as JIC (South Africa)
g. Companies: Overseas Companies Controlled Directly or Through
Factotums by the Gupta Enterprise
I. Accurate Investments (UAE)
II. Brookfield Consultants (US)
III. Fidelity Enterprises (UAE)
IV. Gateway (UAE)
V. Global Corporation LLC (UAE)
VI. Regiments Asia (Hong Kong)
VII. SES Technologies (India)
VIII. Tequesta Group (Hong Kong)
h. Companies: Companies Controlled by the Worlds Window Network
Used to Launder Funds for the Gupta Enterprise
I. Arctos SA (South Africa)
II. Century General Trading (CGT) (UAE)
III. Everest Global Metals PTY Ltd (South Africa)
IV. Everest Metals FZE (UAE)
V. Golden Coast FZE (UAE)
VI. JJT Trading FZE (UAE)
VII. RR Energy (India)
VIII. Worlds Window Impex Private Limited including subsidiaries
Worlds Window Exim Private Limited and Worlds Window Urja
Private Limited (India)
IX. Vasudhamaa Resources PTE (Singapore)
2.3. COMPANIES AND INDIVIDUALS
RECEIVING FUNDS FROM THE
HSBC/HONG KONG NETWORK
5. In Section 5 below we describe how Regiments Asia and Tequesta
Group received hundreds of millions of dollars in payments from China
South Rail into HSBC bank accounts. We have been granted access to
HSBC banking documentation by the Organised Crime and Corruption
Reporting Project (OCCRP)2
on condition of retaining the anonymity
of the original source. These documents show hundreds of payments
2 https://www.occrp.org/en
22 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET
from the Regiments Asia and Tequesta accounts. It is possible that the
majority of these payments formed the first step in an elaborate money
laundering exercise. We cannot, however, confirm this without further
documentation. Nevertheless, we provide, as Annexure QQ, a list of all
recipients of payments from the Regiments Asia and Tequesta Group
accounts, some of which may, upon further investigation, be considered
part of, or beneficiaries of, the Gupta enterprise:
2.4. THE CONNECTIONS BETWEEN
THE GUPTA ENTERPRISE AND KEY
TRANSNET CONTRACTS
6. Extensive forensic investigations have been undertaken into a number
of major contracts placed by Transnet, in particular the constituent
contracts (and ancillary service contracts) that made up the 1064
locomotive contracts. Considerable evidence has also been led before the
Commission about irregularities in the award of contracts by Transnet.
We do not traverse that evidence here, suffice to note that there is
incredibly strong prima facie evidence showing that certain individuals
materially intervened in multiple Transnet contracts with the effect
that contracts were bedevilled by irregularities and were directed to
seemingly pre-chosen contractors. Moreover, these interventions were
made to the obvious and substantial prejudice of Transnet and public
finances in general, inflating costs and preventing a fair and honest
assessment of which contractors offered best value to the state.
7. A number of characters and committees were repeatedly implicated
in this process, including Anoj Singh, Brian Molefe, Siyabonga Gama,
Malusi Gigaba, Thamsanqa Jiyane, Mogokare Richard Seleke, Lindiwe
Mdletshe and Iqbal Sharma. The conduct of a number of these
individuals and the recommended criminal or other disciplinary action
appropriate to their behaviour is set out comprehensively in the MNS
Report.
8. The conduct of the individuals dealt with in the MNS report must be
read against the emails and documents emanating from the #Guptaleaks.
Indeed, the #Guptaleaks shows that many of these individuals had close
and material connections to, or engagements with, the broader Gupta
enterprise.
9. Considering that it was the Gupta enterprise that benefited handsomely
from kickbacks related to Transnet contracts, we submit that the
most plausible explanation was that these individuals had developed
relationships with the Gupta enterprise and, in so doing, abused their
official functions to benefit the Gupta enterprise. Properly understood,
these individuals were party to the broader racketeering activities of
the Gupta enterprise and can, indeed, be considered de facto members,
associates or partners of the Gupta enterprise.
10. The relationship between key Transnet employees and the Gupta
enterprise has been exhaustively articulated by media articles and
through investigations undertaken by the Public Protector and the
private audit firms (Werkmans, Fundudzi, MNS) that have completed
audits of the 1064 locomotive procurement. As such, we do not address
Section 2 – 23
these relationships in detail here, as the Commission is already no doubt
aware of them, and of the underlying material upon which the extensive
reporting has been based to date.
11. In brief, however, it is useful to bear in mind, when considering the
materials related the money laundering systems used by the Gupta
enterprise, the following salient facts:
a. Brian Molefe was a ‘good friend’ of the Gupta family and visited the
Gupta’s Saxonwold compound on multiple occasions, and made and
received large number of phone calls from Ajay Gupta, and exchanged
small number of phone calls and texts with Ronica Ragavan, between
August 2015 and April 2016;
b. An extended chain of email correspondence shows that senior CSR
employees were writing to Brian Molefe about tendering for Transnet
contracts, and forwarding this correspondence to both Worlds
Window and Gupta enterprise employees. One of the individuals
copied into the email correspondence would later be involved in an
email exchange in which a ledger of kickbacks to be paid by CSR
related to three Transnet contracts was distributed;
c. Molefe, subsequent to his period at Transnet, was appointed the
CEO of Eskom, in which position he further intervened in internal
processes to the benefit of the Gupta enterprise;
d. Iqbal Sharma, who played a key role in managing and manipulating
the award of Transnet contracts, had numerous direct and clear
connections to the Gupta enterprise, including as the joint owner
of Elgasolve Pty Ltd alongside Salim Essa, through which both held
shares in numerous other companies such as VR Laser Services,
which has also been implicated in the capture of Denel;
e. Anoj Singh, who also played a key role in manipulating Transnet
processes to the benefit of the Gupta enterprise, stayed at the Oberoi
Hotel in Dubai on multiple occasions. The expenses were paid for
by the Gupta enterprise. Singh frequently travelled at the same time
as Tony Gupta and Salim Essa. #Guptaleaks records show that the
Guptas opened a shell company in UAE, Venus Limited, which was
transferred into Singh’s name by Vivek Sharma during a trip both
made to Dubai. Internal Gupta enterprise accounting ledgers suggest
that Singh was given AED200,000 by the Gupta enterprise during a
trip to Dubai.
f. Siyabonga Gama stayed at the Oberoi in Dubai for two nights
between the 22nd and 24th of January 2016, which was paid with
credits bought by Aakash Garg, an in-law to the Gupta family. During
the trip, Gama met with Salim Essa;
g. Mokgoro Richard Seleke served on the notorious Board Acquisitions
and Disposal Committee (BADC) that played a major role in
manipulating Transnet contracts to the benefit of the Gupta
enterprise and CSR. Seleke was subsequently appointed the Deputy
Director General at the Department of Public Enterprises after
forwarding his CV to Duduzane Zuma. Seleke, who had previously
held numerous civil service positions in the Free State, listed Peter
Thabethe and Mosebenzi Zwane, both of whom were implicated in
the Estina matter, as references on the CV he forwarded to Zuma.
This submission sets out
how the Gupta enterprise
secured billions of Rand in
illicit and unearned fees and
payments through large
Transnet contracts; and,
most importantly, the various
elaborate money laundering
systems that they employed
to hide their money aided by
major international enablers.
Summary – 11
Confirm the extent of the Bank of
Baroda’s complicity in the extensive
money laundering networks established
by the Gupta enterprise and the Worlds
Window network;
Question HSBC to seek clarity on
whether HSBC informed any authorities
as to the nature of payments made into
and out of Tequesta and Regiments
Asia’s HSBC accounts in Hong Kong, all
of which should have raised major red
flags;
Urgently request that HSBC trace any
and all payments made by Tequesta and
Regiments Asia into any other accounts
held with HSBC;
Further investigate payments made
by Liebherr Cranes to the Gupta
enterprise, and, in particular, question
why Liebherr Cranes thought it fit to
make payments to a corporate shell in
Dubai with no infrastructure, no online
presence, a sole Indian director, and no
notable connections to South Africa.
9
24. In tranche 2, Liebherr paid $212 006.01 to Accurate Investments on the
17th of February 2014. This was ultimately paid out to:
a. Linkway Trading, a Gupta enterprise company based in South Africa,
which was paid $599 327, made up of the $212 006 from Liebherr
commingled with other money flows;
25. In tranche 3, Liebherr paid $371 105.83 to Accurate Investments on the
15th of April 2014, which was ultimately paid out to:
a. Oakbay Resources, which was paid $400 000 on the 29th of April
2014, made up of $371 105.83 from Liebherr commingled with other
money flows;
26. In tranche 4, Liebherr paid $1 105 368.16 to Accurate Investments in
three payments made in May 2014. This was ultimately paid out to:
a. Brookfield Consultants, who were paid $5m on the 28th of May 2014,
made up of $1 105 368.16 from Liebherr commingled with other
funds, including money from JJ Trading. Brookfield Consultants was
a US-based company controlled by relatives of the Gupta family.
27. In tranche 5, Liebherr paid $638 950 to Accurate Investments in two
payments in October and December 2014. The accounting records
revealed in the #Guptaleaks ended shortly after these payments were
made. Tracing the ultimate disposition of these payments is therefore
not possible based on documents in our possession.
28. In July 2017, after the payments from Liebherr to Accurate Investments
was disclosed, Liebherr announced that it was to appoint an internal
investigation into the matter. In October 2017, Liebherr announced that
it was satisfied, based on its internal investigation, that the transactions
were ‘legally sound’ and did not violate any applicable laws, although
it admitted that the company’s ‘due diligence process might have been
implemented in a more stringent manner.’ Liebherr further noted that
the use of agents such as Accurate Investments was ‘common in the sales
process for expenditure projects.’
29. Based on the information at our disposal, this explanation does not seem
sufficient. We urge the Commission to investigate this matter further. In
particular, we urge the Commission to seek Liebherr’s explanation for
the payments to Accurate in light of the fact that:
a. Liebherr was bidding for a large capital project from a State-owned
entity based on an open tender;
b. Accurate Investments was little more than a corporate shell based
in Dubai with a single Indian director, which had little to no
infrastructure, online presence or any obvious connections to South
Africa;
c. Accurate Investments was, at all times, ultimately controlled by the
Gupta enterprise;
d. The only payments recorded into Accurate Investments accounts for
the period under consideration were made by Liebherr Cranes and
an unknown company called VK Trading Hong Kong;
e. The only payments made out of Accurate Investments were made to
Gupta enterprise entities.
THE FIRST LAUNDROMAT: THE WORLDS WINDOW GROUP
7. The Gupta enterprise entered into a number of contractual agreements
with CSR, CNR, CRRC and ZPMCC through which it was paid billions
of Rand, for which it performed no services beyond exerting its political
influence to ensure that CSR and CNR were awarded lucrative contracts.
8. The Gupta enterprise entered into these contracts through front
companies and nominees across two phases of the scheme. In the first
phase, the Gupta enterprise teamed up with the Worlds Window Group
of companies, based in India. The ‘flagship’ of the Worlds Window Group
was majority controlled by the group Chairman, Piyoosh Goyal, while
International Metal and Steel BV (IMSBV) owned the remaining 49%.
IMSBV is a wholly-owned subsidiary of European Metals Recycling
based in Liverpool.
9. The #Guptaleaks show that from at least 2010, the Worlds Window
network of companies entered into a series of complex financial and
criminal arrangements with the Gupta enterprise. This included
engaging in numerous money laundering loan-back schemes, utilising a
company by the name of Arctos it formed in South Africa. Our research
shows that the South African branch of the Bank of Baroda had full
insight into the reality of certain loan-back schemes, and was totally
complicit in how it operated.
10. Our research shows that one of the companies that participated in the
Gupta enterprise-Worlds Window money laundering network was
Estina, which was used to funnel funds as part of a loan-back scheme.
Estina was famously used by the Gupta enterprise to steal government
funds from the Vrede Dairy Project. Estina was used in the Gupta
enterprise-Worlds Window Group money laundering scheme in 2011, a
year before it participated in the Vrede Dairy Project. This provides even
further proof that Estina was merely a front company controlled by the
Gupta enterprise that was used in multiple criminal endeavours.
THE SECOND LAUNDROMAT: THE HONG KONG MACHINE
12. For reasons unknown, the Gupta enterprise and Worlds Window Group
ceased collaborating on the Transnet kickbacks by 2015. As a result,
CNR, CSR and CRRC entered into new agreements with two Gupta
enterprise front companies, Regiments Asia and Tequesta Group based
in Hong Kong. Hong Kong records show that both of these companies
were formed in March 2015, and Gupta ally and partner, Salim Essa,
was the sole director. In November 2016, Salim Essa stepped down as
director to be replaced by Aashika Singh, who the #Guptaleaks show
had a financial relationship with the Gupta enterprise.
13. Banking documents show that Regiments Asia and Tequesta operated
bank accounts with HSBC in Hong Kong, into which over a hundred
million dollars were paid by CSR, CNR and CRRC. Our analysis of the
banking documents shows that Tequesta Group received funds totalling
$62 416 299, of which:
a. $11 288 092.75 was paid by CNR;
b. $2 704 159 was paid by CRRC;
c. $43 456 242 was paid by CSR; and
d. $1 021 650 was paid by unknown sources
14. Our analysis shows that Regiments Asia’s HSBC Hong Kong account
received a total of $83 783 437.41, of which:
a. $8 622 906 was paid by CNR
b. $14 757 788.75 was paid by CRRC; and
c. $45 750 456.75 was paid by CSR
d. $18 120 982.50 was paid by Da Lian [a China North Rail subsidiary]
15. Calculations by amaBhungane have shown that these amounts accorded
exactly with what was expected to be paid to the Gupta enterprise
through contracts it entered into with CSR, CNR and CRRC.
16. The payments made into the Tequesta Group and Regiments Asia
accounts were almost immediately dissipated in a huge flurry of
transactions to over 190 identifiable recipients and companies.
17. Our analysis shows that the majority of the funds were dissipated into
two different money laundering streams. In the first, the funds were
transferred to Hong Kong front companies that had been formed by
company formation agents in Hong Kong. In the second, funds were
paid to a range of textile, garment, furniture and other manufacturers in
mainland China. Customs records show that some of these companies
had reported exports to South Africa.
08 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET
18. The way in which Tequesta and Regiments Asia operated their Hong
Kong accounts should have raised serious red flags with HSBC, who
provided bank services to the companies. HSBC should have enquired
why two newly formed companies, with a sole politically exposed
director based in South Africa, and who had been publicly linked to
the Gupta enterprise, was receiving over a hundred million dollars from
two state-owned Chinese rail companies over a period of just under
two years. In addition, the way in which the payments were received
and dissipated almost immediately, many of them to Hong Kong front
companies with no known infrastructure or business history was clearly
indicative of money laundering.
THE THIRD LAUNDROMAT: HABIB BANK
19. Documents published by amaBhungane show that in 2016, the Gupta
enterprise ceased using its Hong Kong money laundering network.
From late 2016 onwards, Tequesta and Regiments Asia received funds
from CRRC through accounts held with Habib Bank in the UAE.
PAYMENTS MADE BY LIEBHERR CRANES
20. Documents emanating from the #Guptaleaks show that the Irish
subsidiary of the Swiss company Liebherr Cranes paid millions of dollars
directly to the Gupta enterprise. The payments related to contracts
Liehberr was awarded by Transnet in February 2014 for the supply of
cranes 22 cranes to Transnet.
21. Our analysis of the #Guptaleaks reveals that Liebherr Cranes paid $3 232
430.88 in five tranches directly into the account of Accurate Investments
based in Dubai between the 22nd of July 2013 and the 1st of December
2014, after which the accounts revealed by the #Guptaleaks go dark.
Accurate Investments was controlled by the Gupta enterprise through
the Dubai-based director, Sanjay Grover.
22. Using the internal accounting records revealed by the #Guptaleaks,
our analysis can now reveal how these funds were subject to further
internal laundering through the Gupta enterprise, before being paid out
to various beneficiaries.
23. In tranche 1, Liebherr paid $905 000.88 to Accurate Investments on the
22nd of July 2013. This was ultimately paid out to:
a. Sahara Computers, who received $499 500;
b. Star Engineering, who received $93 378.61. Star Engineering were
being paid for dairy processing equipment that was being purchased
by Estina for use in the Vrede Diary Project;
c. Wizcraft, who received AED475 620. Wizcraft was hired by the
Gupta family to provide entertainment services for the infamous Sun
City wedding of Aakash Jahajgarhia and Vega Gupta;
d. Vikas Chaturvedi, who was paid AED616 500. Vikas Chaturvedi was
an employee of the Gupta enterprise based in India and responsible
for day-to-day logistics for the enterprise.
E xecutive Summary – 09
24. In tranche 2, Liebherr paid $212 006.01 to Accurate Investments on the
17th of February 2014. This was ultimately paid out to:
a. Linkway Trading, a Gupta enterprise company based in South Africa,
which was paid $599 327, made up of the $212 006 from Liebherr
commingled with other money flows;
25. In tranche 3, Liebherr paid $371 105.83 to Accurate Investments on the
15th of April 2014, which was ultimately paid out to:
a. Oakbay Resources, which was paid $400 000 on the 29th of April
2014, made up of $371 105.83 from Liebherr commingled with other
money flows;
26. In tranche 4, Liebherr paid $1 105 368.16 to Accurate Investments in
three payments made in May 2014. This was ultimately paid out to:
a. Brookfield Consultants, who were paid $5m on the 28th of May 2014,
made up of $1 105 368.16 from Liebherr commingled with other
funds, including money from JJ Trading. Brookfield Consultants was
a US-based company controlled by relatives of the Gupta family.
27. In tranche 5, Liebherr paid $638 950 to Accurate Investments in two
payments in October and December 2014. The accounting records
revealed in the #Guptaleaks ended shortly after these payments were
made. Tracing the ultimate disposition of these payments is therefore
not possible based on documents in our possession.
28. In July 2017, after the payments from Liebherr to Accurate Investments
was disclosed, Liebherr announced that it was to appoint an internal
investigation into the matter. In October 2017, Liebherr announced that
it was satisfied, based on its internal investigation, that the transactions
were ‘legally sound’ and did not violate any applicable laws, although
it admitted that the company’s ‘due diligence process might have been
implemented in a more stringent manner.’ Liebherr further noted that
the use of agents such as Accurate Investments was ‘common in the sales
process for expenditure projects.’
29. Based on the information at our disposal, this explanation does not seem
sufficient. We urge the Commission to investigate this matter further. In
particular, we urge the Commission to seek Liebherr’s explanation for
the payments to Accurate in light of the fact that:
a. Liebherr was bidding for a large capital project from a State-owned
entity based on an open tender;
b. Accurate Investments was little more than a corporate shell based
in Dubai with a single Indian director, which had little to no
infrastructure, online presence or any obvious connections to South
Africa;
c. Accurate Investments was, at all times, ultimately controlled by the
Gupta enterprise;
d. The only payments recorded into Accurate Investments accounts for
the period under consideration were made by Liebherr Cranes and
an unknown company called VK Trading Hong Kong;
e. The only payments made out of Accurate Investments were made to
Gupta enterprise entities.
10 – SUBMISSION: GUPTA ENTERPRISE & THE CAPTURE OF TRANSNET
CONCLUSION AND RECOMMENDATIONS
30. Transnet was aggressively captured by the Gupta enterprise, which used
its political connectivity to ensure that tens of billions of Rands worth
of capital projects were awarded to CSR, CNR, CRRC, ZPMCC and
Liebherr Cranes.
31. The Gupta enterprise, as a result of this capture, was due to be paid R7
763bn and a further $18.2m by CSR, CNR, CRRC and ZMPC.
32. The Gupta enterprise was also paid a further $3 232 430.88 by Liebherr
Cranes between 2013 and 2014 in relation to Transnet crane contracts.
These amounts were laundered out of Gupta enterprise accounts to be
used for expenses such as entertainment for the infamous Sun City
wedding, and to pay for dilapidated dairy equipment to be used on the
Vrede Dairy Project.
33. The Gupta enterprise made use of three extensive money laundering
networks to receive and pay out the funds from CSR, CNR, CRRC
and ZMPC. The first money laundering network was run with the
help of the Worlds Window group based in India. The second money
laundering network was based in Hong Kong, and was implemented
through payments to dozens of front companies based in Hong Kong
and many more garment, textile and furniture manufacturers based in
mainline China. The third money laundering network was based in the
UAE, in which Gupta enterprise companies controlled bank accounts
at Habib Bank.
34. The laundering of funds by the Gupta enterprise from Transnet contracts
was enabled by some of the world’s biggest banks, including the Bank of
Baroda and HSBC.
35. The scale of the theft from Transnet is staggering, and must rank as one
of the largest corruption scandals to have ever been inflicted on the
South African tax payers.
CONCLUSION AND RECOMMENDATIONS
30. Transnet was aggressively captured by the Gupta enterprise, which used
its political connectivity to ensure that tens of billions of Rands worth
of capital projects were awarded to CSR, CNR, CRRC, ZPMCC and
Liebherr Cranes.
31. The Gupta enterprise, as a result of this capture, was due to be paid R7
763bn and a further $18.2m by CSR, CNR, CRRC and ZMPC.
32. The Gupta enterprise was also paid a further $3 232 430.88 by Liebherr
Cranes between 2013 and 2014 in relation to Transnet crane contracts.
These amounts were laundered out of Gupta enterprise accounts to be
used for expenses such as entertainment for the infamous Sun City
wedding, and to pay for dilapidated dairy equipment to be used on the
Vrede Dairy Project.
33. The Gupta enterprise made use of three extensive money laundering
networks to receive and pay out the funds from CSR, CNR, CRRC
and ZMPC. The first money laundering network was run with the
help of the Worlds Window group based in India. The second money
laundering network was based in Hong Kong, and was implemented
through payments to dozens of front companies based in Hong Kong
and many more garment, textile and furniture manufacturers based in
mainline China. The third money laundering network was based in the
UAE, in which Gupta enterprise companies controlled bank accounts
at Habib Bank.
34. The laundering of funds by the Gupta enterprise from Transnet contracts
was enabled by some of the world’s biggest banks, including the Bank of
Baroda and HSBC.
35. The scale of the theft from Transnet is staggering, and must rank as one
of the largest corruption scandals to have ever been inflicted on the
South African tax payers.
Comments by Sonny
This is just a brief summary of the corruption by Jacob Zuma and his Gupta cronies who together ruined the economy of the whole SOUTH AFRICA.
ZUMA IS AVOIDING JUSTICE AND BELONGS IN PRISON FOR LIFE!
THE NEW REGIME UNDER CYRIL RAMAPHOSA IS JUST AS CORRUPT BUT DOES NOT WANT TO ACCEPT ACCOUNTABILITY!
THE PEOPLE OF SOUTH AFRICA MUST RULE IN THE END!
