THE STATE CAPTURE PROJECT - SOUTH AFRICA - 2022

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!