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Business Masterclass – The Guptas & SA State Security

Posted on December 22th 2015

THE GUPTAS
Who are the Guptas anywhere? What is their claim to fame? Do the Guptas pose a security threat to South Africa? What is the true nature of the relationship between the Gupta and Zuma families?

The relationship between politics and business in post-colonial Africa is pregnant with speculations and innuendoes to limit such an experience to a single family in a democratic constitutional order.

If the Guptas were part of the old money establishment, then their relationship with the ruling political elites would automatically be upgraded to a dignified and positive developmental one.

No other Indian family has captured the imagination and anger of so many people in South Africa than the Gupta family.

When institutionalised corruption is discussed and the name of President Zuma and his family is invoked, the Gupta name looms large.

The contested role of Indians in post-colonial Africa and the subtext of nationalism, necessarily brings to the fore any person of Indian heritage who makes it in business or politics.

In apartheid South Africa, Indians were not spared of the limitations imposed on native Africans but their experiences were far much better.

The broader issues of African identity, citizenship and nation-building are all relevant when the role of Indians in Africa in general and the Gupta family is critically unpacked.

In the public domain, a case has been made that the Guptas whose relationship with South Africa began in 1993 when the first Gupta brother arrived in the country are parasitic business actors who have thrived on political patronage yet nothing was known of them in business and political circles during the first five years of their arrival.

TEH GUPTAS AND PRESIDENT J ZUMA

The brothers, Atul, Ajay and Rajesh are together known now as the Guptas. Atul is the middle brother and the public face of the three.

It has been alleged that they have made their fortune on the back of the black economic empowerment ("BEE") program established specifically to promote the assimilation of historically economically disadvantaged South Africans.

The Guptas were not supposed to benefit from the program and therein lays one of the grievances by both native black South Africans and their Indian counterparts.

The migration of the Guptas from native India to South Africa has been classified as opportunistically motivated since the BEE works best through persons with high political voltage and connectivity.

Atul's older brother, Ajay, and the leader of the business empire, started visiting South Africa from 1995 onwards and settled permanently in the country about 10 years ago.

The youngest, Rajesh, who would become Duduzane Zuma's friend and business partner, joined them in 1997. Their sister, Achla, and beloved matriarch, Angoori, completed the family's set-up in Johannesburg.

The story goes as follows: Atul's father, Shiv Kumar, inspired by the post-apartheid South African economic promise, sent Atul as the harbinger to the country.

The youngest, Rajesh, who would become President Zuma's son, Duduzane Zuma's friend and business partner, joined them in 1997.

Their sister, Achla, and beloved mother, Angoori, completed the family's set-up in Johannesburg. One would assume from the media coverage and associated outrage that the family is bigger than three principal males and a sister plus the mother.

Atul, the pioneer, started his South African business journey from a humble beginning with a shoe store in Killarney Mall in Johannesburg in 1994. He hoped that with democracy more feet would need shoes and he would grow his business model by spreading the outlets as a chain.

The store, Liberty Da Trend boutique, was a financial failure. In the say year of democracy, Atul also established another company, Correct Marketing that proved a financial success as a computer and related components distributor and retailer.

The company's name was changed to Sahara in 1997, and it is reported that in the same year its turn-over rocketed to about R97-million from a mere R1.4-million in 1994. At this material time, President Zuma was not associated with the Guptas.

For the next few years, the brothers continued to build Sahara Holdings and its various businesses, including Shiva Uranium and JIC mining services, and kept out of the public eye.
The Guptas have done what many native previously disadvantaged actors would have wanted to do i.e. convert their political connectivity into active economic assets.

The Guptas have no memory of the debilitating economic impact of apartheid yet their success can only make sense if it is tainted with political patronage not least because natives know how difficult it is to make it economically but also the old capital who understood the power of race-based patronage are baffled by the modus operandi of the Guptas, the quintessential outsiders who are presumed to be operating where they should not dare.

Although it is uncharacteristic for old money to associate itself with the new political elites, the Guptas coming from India know the tremendous value of networks.

THE GUPTAS
Their relationship with the politically powerful elites of South Africa starting with the Mbeki administration has been the subject of speculation for some time.
However, President Zuma has made it easy for people opposed to the emergence of the Guptas as a political and economic force to rally around in the name of anti-corruption.

The role of business and its actors in post-colonial Africa is a subject on its own that requires critical analysis but the alleged role of the Guptas in the affairs of the ruling party, the African National Congress ("ANC") and the state is the subject of contested views.

One such view is the one articulated in an article titled: "South Africa is under the management of Guptas," http://www.dailymaverick.co.za/.../2015-12-17-south-africa-.../..., Hon Floyd Shivambu, Deputty President of the Economic Freedom Fighters ("EFF") asserts boldly as true and fact that the Gupta family are effectively controlling the management, whatever it means, of the state of South Africa.

It is not explained in precise terms how a constitutional democratic order of 55 million people can be hijacked by a single family of the Guptas.

If Hon. Shivambu was a pedestrian and a political novice one would be tempted to ignore his intervention but when such input comes on the back of the campaign to remove the incumbent President, one is compelled to pause and reflect on the issues and allegations raised.

Indeed, the article raises a number of legal and constitutional questions that are important to address at this juncture of the evolution of this post-apartheid state.

It is asserted by Hon. Shivambu that: "We should never agree to be puppet-mastered as if there are no rules and principles that govern this country," without explaining the context in which the conclusion is reached that the Guptas can and are competent to displace a functioning state in which he plays an important role as a member of the legislature.

Hon. Shivambu makes no suggestion that his worldview and actions as a legislator have been impaired by the alleged improper intervention by the Guptas.

He proceeds to make a call to action as follows: "We call on all South Africans to stand up against the Gupta syndicate because we will soon be left with no country," in so doing exposing his limited understanding of the design and operations of the state.

It is the case that in both the Freedom Charter and the Constitution of the Republic, South Africa belongs to all who live in it including the Guptas.

The use of the word "WE" is instructive for it conveys the idea of exceptionalism that seems to be at the bedrock of the ideology of the EFF.

The unmistakeable message is that the Guptas should be excluded from the family of South Africa. It is not clear how Guptas have managed to render the remainder of the population politically impotent.

It is suggested that if South Africa minus the Guptas do not stand up against the alleged syndicate, the country's national security is at risk hence the call to action.

An attempt is then made to establish a causal link between the removal of the former Minister of Finance, Hon. Nene, a Zuma appointee, as Minister of Finance, and the alleged machinations of the Guptas.

It is stated as truth and fact that: "Nene was removed to open space for the Gupta-led syndicate to loot State resources for private enrichment," without any regard to the facts supporting the allegation.

It is alleged that Hon. Nene was an impediment to the Guptas' primitive accumulation schemes involving state resources.

EFF

It is also stated as fact that: "The reality is that for some time now, South Africa has been under the management of a criminal syndicate masquerading as genuine business people, headquartered in Saxonwold," notwithstanding the limitation imposed by law in respect of presumption of innocence, a fundamental tenet of the rule of law.

No information is provided by the author as to whether the Guptas as broadly defined have been convicted of any offence in this country other than the fact that they are deemed by a few who believe that they have a better claim on South Africa to be outsiders, and therefore, parasitic criminals.

Hon. Shivambu proceeds to boldly state that: "The Guptas are not a figment of our imagination. They have de facto colonised South Africa, with Zuma being the chief colonial administrator," as if to suggest a political putsch despite the fact that all organs of state and party appear not to have been tainted by the alleged putsch.

It is instructive that Hon. Shivambu believes that: "The Guptas have established a solid network inside the ANC, and have disproportionate and decisive influence in what happens in the ruling party and the State," without discharging the obligation to expose the alleged network and its operations.

The structures of the ANC are known to the public including Hon. Shivambu yet no warm body is used to confirm the veracity of the allegations that a network does exist inside the ANC whose sole purpose is to undermine or compromise the integrity of the organisation.

It is then concluded that such a nefarious network that could only exist in the imagination of the author has had the effect of distorting the decision making of the institution in a manner that disproportionately favours of the Guptas.

It is stated as fact that: "The Guptas have lots of cash, and run South Africa's state machinery in a manner that benefit them, and the soldiers they have in the national and provincial levels of government," without discharging the onus of proof confirming which institutions are implicated and the specific actors involved in undermining the rule of law.

It is also asserted that: "In their network of influence, they have premiers of the Free State and North West provinces, ministers, chairpersons and Chief Executive Offices of state-owned companies," but no specific evidence is provided exposing the manner in which the supposedly secret society operates and how the benefits are transmitted to the actors in question.

Hon. Shivambu boldly states that: "They also have control over many critical decisions that will financially benefit them and the puppets they control," but it is evident that the allegations are general in nature clearly meant to defame the targeted parties and institutions.

He also states that: "The first and last time anyone spoke about the disproportionate influence of the Guptas in the ANC was during the 2011 launch of the ANC local government election manifesto. At the time, the ANC Youth League president, Julius Malema said, right in front of Mr Zuma that South Africa's democracy was "not a democracy of families; this is a democracy of the people of the country. When families are exploiting the resources of this country and are enriching themselves in the name of freedom, when those in political office abuse their power to benefit friends, the youth must rise in defence of the ANC."

However, it is not clear how general statements made by Hon. Malema can conceivably be used as a convenient substitute for facts.

If the Guptas have influence as alleged, the effect of such influence must be self-evident. It is this aspect that allows one to meaningfully respond to the serious allegations made against the Guptas.

When one pierces the veneer of the anti-Guptas attacks then one can easily appreciate the xenophobic attitude that inform them. If the Guptas were born in South Africa, there can be no doubt that the attitude would be different.

The Guptas like Cecil John Rhodes were born outside the border of South Africa like many of us. However, Rhodes became a Prime Minister of the Cape Colony and I shudder to think what would happen if one of the naturalised Guptas were to choose to serve the people as a political actor.

I have no doubt that there would be a public outrage yet the constitution is quite clear and unequivocal that all the people who live in SA enjoy the same rights and equal treatment.

It is alleged forcefully that the Guptas have hijacked the state and anecdotes are then used as conclusive evidence that this fact has now been determined.

Indeed, the relationship between the Zuma and Gupta families may raise questions that may arouse the curiosity of the public.

Indeed, it is the general expectation that a President especially Zuma must necessarily not have friends and that his family must be black listed as business actors.

It is not the first time that a sitting President has friends and acquaintances in business but Zuma stands guilty as charged.

What is being suggested is that the Guptas are superhuman capable of digesting the entire government machinery for personal benefit.

THE ANC

Hon Shivambu makes the point that one plausible reason for the fallout between Hon. Malema and Zuma could be the Gupta nexus. He alleges that Hon. Malema was privy to the modus operandi of the Guptas and the purported power they wielded over the ANC and state organs.

For these allegations to make any sense, they would need to be corroborated by the actors in both the state and party yet no reliance is made specifically on any such corroboration.
It is asserted that Fikile Mbalula was told by Atul Gupta that he was going to be Minister of Sports before Zuma announced the decision to confirm the power the Guptas possess.

It is also suggested that since the exit of Hon Malema and his colleagues from the ANC, the Gupta family was left to operate freely with no real internal opposition. However, it is not specified in precise terms what the role if any of the Gupta family was and is in relation to the ANC Youth League.

Although the ANC has its own structures, it is asserted by Hon. Shivambu that the Gupta family took over the ruling party's real decisions, including bankrolling the re-election of Mr Zuma as president in the 2012 National Conference.

Is it not ironic that Hon. Shivambu fails to identify how and when decisions of the Youth League structures were interfered with by the Guptas during his tenure and what he did to correct the situation?

It is also stated as fact that the Guptas are in control of the Free State provincial administration. A point is also made that the real reason that Hon Nene was relieved of his duties was because of the Dudu Myeni affair.

A point is also made that the New Age newspaper has corruptly accessed state contracts in an opaque manner. In addition, the relationship between state organs including Eskom, Transnet and SAA is described as generally corrupt.

The role of the Guptas in the Kumba Iron Ore mining licence is also called to question. It is also alleged that the Guptas have exercised undue influence on the President in the appointment of Ministers closely associated with them.

It is also alleged that the Guptas are the only ones who recurrently transport the President in private cars to their compound to instruct government ministers and SOCs officials to take decisions in their favour.

A point is made that the Guptas have an interest in the nuclear deal to compel them to have a strategic interest in who is in charge of National Treasury. They already have interests in uranium, a key feedstock into nuclear reactors.

It is also suggested that the Guptas and their associates have an interest in the proposed purchase of new planes by the Department of Defence and the Presidency.

Hon Shivambu concludes by stating that: "These are hard core and open facts, and we challenge the Presidency and anyone who is mentioned here to factually dispute what we have said.

The reality, dear South Africa, is that our country has been hijacked by a criminal syndicate which works with Mr Zuma to maximise private financial interests. The ruling party is incapable of resolving this crisis because most of their senior leaders are compromised and cannot do or say anything." It is clear from the above that no facts are presented in support of the allegations but a call is made on the Presidency to challenge the allegations clothed as facts.

SOUTH AFRICA

Hon. Shivambu then calls on citizens to stand up and close down the Guptas on the basis that they are colonialists who alleged greed threatens national security.

It is proposed that President Zuma must cut ties with the Guptas or face the risk of being removed unconstitutionally.

The Guptas are residents of South Africa and have business interests that benefit the generality of the country's citizens.

The targeting of the Guptas exposes the underlying premise on which the strategy is formulated and orchestrated whose main thrust is to exclude the family from the post-apartheid social contract.

The alleged proximity of the Guptas to the President should ordinarily be in any constitutional democracy as is the fact that new immigrants like the Guptas have made it despite the odds against such class of citizens.

Instead of learning from the experiences of the Guptas in terms of business and citizenship, a deliberate attempt seems to be at play to discourage any new capital formation involving the interaction between new immigrants and native South Africans.

The highly emotional piece by Hon. Shivambu that South Africans, obviously excluding foreigners like the Guptas, should stand up and close down the Gupta colonialists is meant to drive a wedge between so-called foreigners and indigenous South Africans.

South Africa has its own Indian problem but it is often subtle and suppressed. Is it not ironic that Pravin Gordham, an Indian, is a ranking Minister in President Zuma's cabinet yet he has been on the surface accepted as an authentic South African.

Although no mechanism exists of distinguishing between an indigenous and foreign Indian exists, the Guptas have acquired notoriety because of their public exposure and the deals they have chosen.

However, the fact that they are Indian in a racially unequal society elevates their quagmire. The whole BEE enterprise is premised on whites being induced through administrative fiat to reduce their perceived economic power by accommodating indigenous actors.

However, although no one can dispute the fact that the Guptas are hardworking actors; it has been convenient to associate their economic power with patronage and to locate their ascendancy to a prime economic position to the Presidency of Zuma.

The facts of the matter clearly show that the relationship between the Guptas and South Africa precedes the assumption of high office by President Zuma.

South Africa is a big country to allow itself to be controlled by a small Guptas.

Comments

Comments by Bruce Simbarashe Mashonganyika (2016-01-02 09:56:03) from South Africa

Wow! Insightful Dziva. 3 well meaning brothers, a sister and a mother. This side of the story makes inspirational sense!

Appreciative of the heads-up.

Regards

Bruce Simbarashe Mashonganyika

blackbrand@bacossi.com

www.bacossi.com

Comments by Eng Joel Makamani (2016-08-30 01:28:06) from Zimbabwe

Well said Dziva on the other side of the story. Not forgetting that the World is now a global village.

www.chemicalbrothers.co.zw

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