The Indian businessmen, the Gupta brothers, became enormously influential in South Africa. A new report says they effectively captured the country.
Transcript
Nimo omer, narrating:
Hi I’m Nimo and this is the Sensemaker.
One story, everyday, to make sense of the world.
Today, how one family bribed their way into the heart of South Africa’s government.
***
Ajay Gupta, Atul Gupta and Rajesh Gupta are Indian businessmen.
Atul Gupta – the middle brother – moved to South Africa in the early 1990s as apartheid was ending.
“The Gupta brothers’ South African journey began in 1993. Atul relocated to South Africa just as the country was opening up to the rest of the world. After a stint of selling shoes, he saw an opening in the PC business, and Sahara computers was born…”
eNCA News
The family saw South Africa as a new world of opportunity and the other brothers soon followed.
Since then, they’ve built a business empire across the country.
They have interests in mining, air travel, energy, technology, and media.
And they also have connections in high places. Multiple members of former president Jacob Zuma’s family have worked at Gupta-owned companies.
For years, experts have claimed that while Jacob Zuma was in office, the Guptas wielded huge political influence and used bribes to further their business interests.
The Guptas have always denied wrongdoing.
But last week, the current president of South Africa, Cyril Ramaphosa, received a report.
It reveals that the brothers were at the centre of a “state capture” scandal.
So, how did they do it? How did one family manage to gain so much influence over a country and its politics?
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The Zondo report, as it is called, is a staggering 874 pages long, and it’s just the first of a three-part investigation by the country’s acting chief justice, Raymond Zondo.
The report’s subject?
Allegations of high-level corruption under former president Jacob Zuma.
And the findings… are damning.
“Corruption is estimated by South Africa’s government to have cost the economy $700 billion. For many, former President Jacob Zuma is the symbol of that corruption…”
Al Jazeera
Since Jacob Zuma’s resignation in 2018, a Judicial Commission has collected more than one million pages of documentary evidence, and contacted more than a thousand people looking into the scandals that surrounded him.
Jacob Zuma has always denied these allegations.
But part one of the Zondo report reveals “rampant corruption” at the country’s most critical state companies.
The report shows a pattern of political corruption known as “state capture” – where a country’s decision-making processes are abused for personal gain.
“The report finds that there was a steady decline in equality and effectiveness of governance from 2012 onwards at the national carrier SAA…”
eNCA News
South African Revenue Service, a bit like HMRC here in the UK, was systematically weakened and South African Airways was “entirely racked by corruption and fraud”.
But there’s one family that dominates the Zondo report.
The Gupta brothers.
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The report uses the example of TNA Media to show how “state capture” took hold in South Africa.
In 2010, just one year into Jacob Zuma’s premiership, the Gupta family established a publishing company – that’s TNA Media.
In December of the same year, TNA launched a newspaper called The New Age.
Here’s Atul Gupta speaking at the newspaper’s launch event…
“We need to change the perception of negativity here. South Africa has so much to offer, much to celebrate, and much by which to attract the necessary level of investment and attention in this country… yes, we are broadly supportive of all three spheres of government which we declare affront…
Atul Gupta speaking at the launch of The New Age
There are two important points you can pick out from his speech.
Firstly, the paper has been set up to “change the perception of negativity” and secondly, it is largely supportive of the government.
These comments fit in line with what Jacob Zuma wanted. A newspaper that wasn’t so critical of the government. So you can see what he’s getting out of this new venture.
But what about the Guptas? What do they get?
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That’s where the money comes in.
Every year, the South African government has an advertising budget to spend on media platforms.
It’s allocated by the communication and information department, known as the GCIS. In 2010, the GCIS was run by a man called Themba Maseko.
According to him… just days before the newspaper’s launch, Ajay Gupta pressured Themba Maseko to spend his entire budget of 600-million rand – that’s about £28 million – on the New Age.
That’s despite the paper having no existing readership or any certified circulation figures.
After a heated phone call Themba Maseko refused.
“Unfortunately Mr Ajay, this is not how things work… but if, he said, I have other… problems or anyone giving me problems or difficulties with any of the ministers refusing to give me money to me, I must come back to him and he will call those ministers to order and you’ll make sure that they deliver.
Themba Maseko giving his testimony to the Commission
A couple of months later, Themba Maseko was moved to a different department.
***
After he refused to cooperate, Themba Maseko was replaced with a new Director General.
And under its new leadership the GCIS made its largest ever monthly payments to the Guptas’ TNA Media.
And the thing is, TNA is just the tip of the iceberg.
“Perhaps the most, I said devastating, and lasting cost of state capture and corruption is the effect of the confidence of the people of South Africa in the leaders and the officials in whom they placed responsibility.
Raymond Zondo, eNCA News
The Gupta family’s extent of influence in South Africa’s public sector was colossal.
In one example millions of dollars of public money intended to support poor farmers was instead directly deposited in Atul Gupta’s personal account.
“State capture has damaged people’s confidence in the rule of law, in public institutions, in law enforcement agencies, and even to some extent in the democratic process…”
Raymond Zondo, eNCA News
The redeployment of Themba Maseko shows us the strategy the Guptas and Jacob Zuma used.
In fact, it’s a defining theme of the Commission’s report. The Guptas populated key institutions with people who they believed were going to comply with their orders.
The “resistors” were replaced or removed.
And the result? An enormous amount of public money was misappropriated to enrich one family and those who helped.
One expert told the Zondo commission that the Gupta family can be linked to over £2 billion pounds of state funds.
When Jacob Zuma lost power in 2018, the Guptas fled South Africa.
They left behind a trail of political and financial destruction and a country struggling to come to terms with the scale of corruption.
Today’s story was written and produced by Imy Harper.
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