S.Africa's Guptas braced for inquiry

A report just released by South Africa's state watchdog agency - the Public Protector - has called for the setting up of an inquiry into allegations surrounding President Jacob Zuma's close relationship with the Guptas, a business family of Indian immigrants accused of meddling in the government for its own financial benefit.

The Guptas have previously refuted that they illegally tried to obtain state contracts and other benefits. Zuma denies granting undue influence to the family. They have denied seeking it and will defend their corner at the planned inquiry, their lawyer, Gert van de Merwe said.           

The Public Protector's report into the alleged influence-peddling stopped short of saying crimes had been committed but said a judge must probe the scandal. 

The Guptas have forged political connections to members of the ruling party, the African National Congress (ANC) and especially to the president himself over the last ten years. The family brothers Ajay, Atul (pictured above with the president's son, Duduzane Zuma) and Rajesh Gupta, all in their 40s, moved to South Africa from India's northern state of Uttar Pradesh in Saharanpur in 1993, just as white minority rule was ending and the country was opening up to the rest of the world.

Indian business empire

South Africa would become the "America of the world," the Guptas' father believed, and sent his sons to Africa. It is reported that Atul Gupta was surprised by the lack of red tape when he arrived in South Africa, the largest economy on the continent at that time. The Guptas were small businessmen in their home country. In Africa, Atul Gupta set up the new family business Sahara Computers.

Over the years, the Guptas evolved as very successful business people with an annual turnover of about 200 million rand ($12.5 million, 11.3 million euros) and some 10,000 employees. Their huge private mansion, Sahara Estate, is located in the posh suburb of Saxonwold in Johannesburg. They built an empire spanning computer equipment, media and mining. The Guptas own The New Age, a South African daily and African News Network (ANN), a 24-hour news channel in Johannesburg. They have interests in technology, air travel and energy.

Concern about possible undue influence arose  2013. The extremely wealthy family found themselves at the center of a political storm after it emerged that a family plane carrying wedding guests landed at the Waterkloof Air Base near Pretoria. The military base is normally reserved for visiting heads of state and diplomatic delegations. The 200 guests, in a convoy of luxury vehicles, were given a police escort to the Sun City holiday resort in Rustenburg in the North West province.

The wedding was a union between the Guptas' niece and a Delhi businessman. While Atul Gupta wanted to organize the most memorable wedding with high-profile guests and entertainers flying in from India, South Africans wondered who gave them permission to land at the air force base.

'Abuse of power'

The governing African National Congress (ANC) concurred with the opposition Democratic Alliance (DA) that this was a blatant abuse of power by a family that enjoys a close relationship with South Africa's first family. One of President Zuma's wives, Bongi Ngema-Zuma, worked for the Gupta-controlled JIC Mining Services at that time. The businessmen were reportedly paying for her 3.8 million rand Pretoria mansion. The Guptas denied this. But more connections to the Zuma family became apparent.

The president's daughter, Duduzile Zuma, was appointed director at Sahara Computers in 2008, six months after her father was elected ANC president. She has resigned since. In April this year Zuma's son Dudzane, together with all members of the Gupta family, resigned from all executive and non-executive positions at Oakbay Investments, the holding company for the Gupta family's businesses in South Africa. The Gupta family has also committed to selling its shares in Oakbay Investments before the end of this year.

Cabinet posts

According to local media, Duduzane Zuma was the first person to make contact with Mcebisi Jonas to offer him the job as finance minister. That was before his father fired Finance Minister Nhlanhla Nene in December 2015. Jonas claimed in March 2016 that a member of the family had offered to promote him to the minister's post. According to the Public Protector's report, Jonas refused the apparent offer. Gupta then offered him 600 million rand and "even asked if Mr Jonas had a bag which he could use to receive and carry 600,000 rand in cash immediately."

The Public Protector's report also found it "worrying" that telephone records revealed that David van Rooyen, then a little-known Zuma loyalist, was regularly in Saxonworld. He was also there on the day before he was appointed finance minister last year.   

His appointment rattled the markets and prompted a national outcry. Zuma replaced van Rooyen with Pravin Gordhan a few days later. 

Atul Gupta and Jacob Zuma's friendship goes back a long way. Gupta said he met the president more than ten years ago "when he was a guest at one of Sahara's annual functions." Since then, Zuma and the Gupta brothers have been seen together at gala dinners and business functions.

The Guptas say they are studying the Public Protector's report. Zuma's office has said he is doing the same and reserves the right to challenge its findings in court.