Business

Gupta-linked companies feeling the pinch

2018-01-18 00:22

The walls are caving in on the Gupta family as the NPA's Asset Forfeiture Unit (AFU) targets R50billion worth of assets connected to the state capture report by former Public Protector Thuli Madonsela.

The AFU has already begun zooming in on companies associated with the controversial family as global consultants McKinsey and the Gupta-linked Trillian have been served with preservation orders. 

The two companies were paid R1.6bn by financially-strained power utility Eskom for consulting contracts. 

Trillian Capital Partners was the local advisory firm for McKinsey, which was controlled by Gupta associate Salim Essa. 

An investigation by Eskom's G9 Forensic revealed how the companies' legal advisors warned its executives against going into a contract agreement with McKinsey as their revenue model was deemed illegal, Fin24 reported.

READ: NPA concludes Eskom payments to McKinsey and Trillian were criminal 

Eskom had initially denied any payments to the firms.  

'Settle the matter out of court'

On Wednesday, NPA spokesperson Luvuyo Mfaku told News24 that the order, which the NPA had obtained ex parte (without notice) on December 14, was only served on the parties on Tuesday.

At least 14 people and entities linked to the alleged corruption by Trillian and McKinsey at Eskom have been identified in a preservation order.

Mfaku said lawyers for all concerned were in negotiations with the NPA on Wednesday. 

"The lawyers of both firms will be meeting us tomorrow (Thursday) to discuss the terms of agreement. Both parties have indicated to us today (Wednesday) that they are willing to settle the matter out of court."

The December 14 order, obtained in the North Gauteng High Court in Pretoria, seeks to recoup assets worth an estimated R1.6bn, as the State finally goes after those identified in probes into state capture, by the family linked to President Jacob Zuma, News24 reported earlier. 

Mfaku explained that they were only acting on the December order now because they needed to ensure that all logistical arrangements were in place. 

These included guaranteeing the security of the seized assets. He added that the execution of the order was also delayed by the festive season. 

He denied that it was a political move to act now.

In a statement to the media on Wednesday, McKinsey's spokesperson Bonita Dordel said it had not been formally provided with any affidavit or order from any authority regarding this matter.

"We encourage the authorities to share with us the documents that have been shared with the press," said Dordel.

Investigations 

Dordel said while the company could not comment, it welcomed all "actions to resolve this issue and will continue to cooperate with the South African authorities and official investigations into these matters".

The company said it had written to Eskom at least five times, asking the power utility to initiate necessary proceedings before the court in relation to the unlawful turnaround contract, and reiterated that it was still willing to pay back the money.

AFU's acting head of operations, Advocate Knorx Molelle, on Tuesday told eNCA that his team had already prioritised six matters which were before the courts, awaiting preservation orders on matters related to the state capture report.

The unit is investigating 17 cases worth R50bn, he said. 

It was Madonsela's last report, State of Capture, released in October 2016, which eventually led to Zuma to establish a commission of inquiry.

This following his failed bid to have Madonsela's remedial action, that Chief Justice Mogoeng Mogoeng select a judge to head the inquiry, reviewed by the North Gauteng High Court in Pretoria.

The report detailed how Eskom boss Brian Molefe visited the Guptas on several occasions. It also revealed how Des van Rooyen visited the Gupta compound in Saxonwold shortly before he was appointed as the minister of finance by Zuma. 

Three days later, an unknown Van Rooyen was reshuffled after business as well as the ANC's top six rejected the move by Zuma.

#Guptaleaks also revealed a string of emails in which the Gupta family stood to benefit from state-owned entities, including Eskom.

The emails are considered the last nail on the coffin for the family's business interests in the country.

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September 23 2018