News

Why Guptas left SA

2016-04-10 06:00

Two brothers, a mountain of suitcases, five assistants and one wife flew from Lanseria Airport to Dubai amid state capture hostility

Just hours after an emotional meeting with his executives on Thursday, where he told them he was resigning from his business empire, Ajay Gupta left for Dubai with his brother Atul on their luxurious private jet.

At 11pm that night, and with a mountain of luggage loaded on to the business jet ZS-OAK, the brothers, together with one of their wives and five of their assistants, left Lanseria Airport – likely for good.

An eyewitness at the airport said they had enough luggage for 20 people. Their flight was destined to land at Al Maktoum International Airport about 37km southwest of Dubai.

On Friday, Ajay and Atul Gupta resigned all their directorships. So did their business associate, President Jacob Zuma’s son Duduzane Zuma.

Family sources told City Press the Guptas’ shareholdings were likely to be put up for sale but were now in the safekeeping of local executives.

“The entire family is checking out,” said one.

It was a difficult decision for the family, who lived in a compound of mansions in the Johannesburg suburb of Saxonwold.

Nazeem Howa, spokesperson for the Gupta family’s business interests and the CEO of Oakbay Investments and its media businesses, told City Press yesterday that even the children had been at the receiving end of hostility.

“The biggest impact has been on the kids,” said Howa. “They have been taunted at school and university.”

Ajay, Atul and the youngest brother, Tony, had withdrawn from public life, and no longer attended big state occasions such as the opening of Parliament.

“The narrative created about them is of a family that pillages and is involved in funny deals with government,” said Howa.

Now they are set for a new life in Dubai, where Tony Gupta has been living for some months. City Press has learnt that he lives in the exclusive Emirates Hills estate, where the lowest-priced home on sale on property website Bayut.com is an R11 million three-bedroom cluster. The most expensive – at R714 million – is a fully furnished mansion with six bedroom suites, a home cinema, skyline views and rooms for maids, drivers and watchmen.

Just last month, when rumours were published that the Guptas were leaving for Dubai, Oakbay threatened to sue, saying the story was “categorically untrue”.

One confidant told City Press that Ajay Gupta’s eldest son, Kamal, was getting married “as far away from South Africa as possible”.

This after the 2013 scandal a Gupta wedding sparked when guests were allowed to land a chartered jet at Air Force Base Waterkloof.

The final decision to leave was taken by family patriarch Ajay. He had mulled over the decision since Easter, when the “state capture” fight was at its toughest, and when the ANC decided to formally investigate the family’s activities.

This followed Deputy Finance Minister Mcebisi Jonas’ bombshell announcement that the Guptas had offered him the job of finance minister while Nhlanhla Nene was still in office.

But the last straw was the banks. They caused Ajay Gupta to call his senior executives to a meeting at their Midrand offices on Thursday morning. He told them his family was leaving for the sake of their staff.

By then, the family’s corporate and personal bankers had fallen like skittles.

Last Friday, FNB sent lawyers’ letters to all the business addresses it had on record for the family and “to anyone with the surname Gupta”, said a confidant. Standard Bank followed on Wednesday.

By the end of the week, Nedbank had also pulled out. Absa dumped them on December 18 last year.

With the Big Four banks gone, the family’s business was hobbled.

“You can’t run a business without a bank,” said another associate. A recent City Press investigation revealed that the family had directorships in 40 companies across major economic sectors, from mining to media.

Howa said the company employed about 5 000 people and this was likely to double once the purchase of the huge Optimum colliery by their company Tegeta went through. Howa said that without bankers and banking facilities, one could not pay staff or undertake any financial transactions.

The family thought that with them out of the way, their staff would be safe, said Howa.

He holds the reins at the family empire and is now tasked with convincing the banks to begin servicing the businesses again.

Howa said Ajay was a friend of President Jacob Zuma, but did not tell Zuma about his decision to leave.

He said the eldest Gupta brother was a political animal who was always glued to NDTV, the Indian channel that specialises in heated Indian politics.

Howa also said Ajay would regularly door-step New Age and ANN7 editor in chief Moegsien Williams and engage him in long political discussions.

Because of his interest in politics, Howa said Ajay Gupta befriended three South African presidents: Thabo Mbeki, Kgalema Motlanthe and Zuma.

He considered himself closest to Mbeki, who had included him in his advisory council and appointed him to the International Marketing Council.

“The idea of The New Age [a newspaper that supports the government] had been born in discussions in Mbeki’s advisory council of which people including [Naspers chairman] Koos Bekker, [lawyer] Christine Qunta and several of today’s corporate and political leaders were also a part,” said Howa. These monthly informal sessions formed the basis of Ajay’s extensive network of friends.

Other friends of the family told City Press that the Guptas did not only court the politically influential such as Duduzane Zuma.

They were also involved with other businessmen, including ANC luminary Tokyo Sexwale, former Anglo American executive Lazarus Zim, and Comair director Ronnie Ntuli.

The family is worried about Duduzane Zuma (33). They believe he is a self-starter who worked himself up in their companies from the time he was 18.

“He had wild oats to sow then, but now he is a businessman who will succeed anywhere. Why destroy a young man like that?” said Howa.

The family believes its forays into the media industry and coal business – via the purchase of Optimum and the desired purchase of the Arnot colliery – touched powerful vested interests in both industries who hounded them out.

They believe the Big Four banks colluded in their decisions to cut ties, almost in concert.

Ajay Gupta came to South Africa as a business-hungry émigré in the mid-1990s.

He bought a home in Bedfordview and the family slowly joined him as he grew the business empire which he began by hawking shoes and computers from his car.

The brothers first started Sahara computers with R1.2 million after spotting a gap in the market created by established tech giants that were selling at huge mark-ups.

“They moved goods in high volumes at low mark-ups,” said Howa.

As the family leaves South Africa after two decades, they are likely to focus on their businesses in China, Dubai and India.

The family’s compound, Sahara Estate, was deserted yesterday, save for five security guards – three uniformed and two in plain clothes – at the entrance.

A neighbour told City Press there hadn’t been any activity at the compound for days. Another neighbour, who asked not to be named, said he was puzzled by the silence.

“We didn’t know they were leaving the country,” he said.

– Additional reporting by Zinhle Mapumulo

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December 10 2017