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‘We have disrupted cosy businesses’ – Guptas hit back at state capture reports

2016-06-13 16:30

The Guptas have hit back at allegations of “state capture”, saying they are “disrupters” in the market, who have upended “cosy” business environments by providing coal and newspapers at cheaper tariffs.

They also welcomed the investigation into alleged state capture against them by the Hawks.

Nazeem Howa – chief executive of Oakbay Investments, the parent company of all the Guptas’ business operations in South Africa – hit back at critics of the controversial family in a television interview on ANN7 this weekend.

On Sunday, City Press reported that Eskom quietly granted a R564-million contract to a coal company belonging to the Guptas and President Jacob Zuma’s son Duduzane.

The contract – which was awarded to Tegeta Exploration and Resources to supply Arnot power station in Mpumalanga with 1.2 million tonnes of coal over six months from its Optimum coal mine at R470 a tonne – was one of Eskom’s most expensive.

Howa said he welcomed the Hawks’ investigation after complaints from the Democratic Alliance, and said it would hopefully bring an end to all the “rumours and whispering campaigns”.

The reason why the family hadn’t taken those making allegations against them to court was “because it takes two years to get a case on the court roll and by that time the damage has been done, and it’s over”.

Howa defended Tegeta, saying it was supplying coal to Arnot at R538 a tonne, in comparison with the previous supplier’s price of R980 a tonne.

According to him, the coal-mining industry was dominated by four or five mines.

“Tegeta is a black-owned company owned by black people. The Guptas are not the major largest shareholder. They are a major shareholder, but not the biggest.

“This is one of the largest black companies in the industry. I think we’ve created much more transparency in coal mining trading.”

According to share registers City Press obtained from the Gupta group of companies, Tegeta Exploration and Resources is owned 29% by Oakbay Investments (made up of various members of the Gupta family), 28.5% by Mabengela Investments (in which Duduzane Zuma owns a 45% stake) and 21.5% by Elgasolve (believed to be 100% owned by businessman Salim Essa although Essa has repeatedly denied City Press access to the share registers of this company).

Two United Arab Emirates-based companies, whose ownership remains opaque, own stakes of 13% (Fidelity Enterprises) and 8% (Accurate Investments).

Read: Eskom prepaid Guptas R586m for coal

Howa added that the Guptas had disrupted other industries too.

“Why do I say this? We came with Sahara’s low-cost, high-quality items that disrupt the markets.

“We launched The New Age, we said that we were pro-government, had a low purchase price and were in nine provinces. It disrupted an industry that was very settled. I think we did the same with ANN7.

“We did the same with the Optimum coal mine. I think we have disrupted what previously was a very cosy environment. I think it upset many people, but I’m very proud of what we did.

“At this stage the Hendrina mine is the cheapest coal supplier to Eskom. We’re very proud of it. If we can do it for all our coal mines, we can make a big difference to the economy.”

November 18 2018