(Bloomberg) -- Even before South African President Jacob Zuma quit under pressure on Feb. 14, having dragged the country through a succession of graft scandals during his almost nine-year tenure, prosecutors were already going after people in his circle. Among the most damning allegations leveled against Zuma during his time in office was that he allowed the Gupta family -- whose members are his friends and business partners of his son, Duduzane -- to influence cabinet appointments and loot billions of rand from state coffers.
1. Who are the Guptas?
The three brothers -- Ajay, Atul and Rajesh -- became so enmeshed in national politics under Zuma that their families and associates were collectively known as the Zuptas. The brothers arrived in South Africa from India in the early 1990s as apartheid rule was drawing to a close. Starting with a small technology company, they built up a business empire, with interests ranging from newspapers and cable television to uranium and coal mines. They set up a sprawling compound in Johannesburg's upmarket Saxonwold suburb, bought a fleet of luxury cars and threw lavish parties. Their public notoriety dates back to 2013, when they landed an aircraft at a high-security air-force base to ferry private guests to an opulent, four-day family wedding. In February, police raided their compound, while immigration officials descended on the offices of one of the media assets they used to own.
2. What's happening to them?
One of the first cases involves the state's Asset Forfeiture Unit saying Atul siphoned off 10 million rand ($856,000) from a state-funded dairy project — allegations he's disputed in an affidavit filed from Dubai. All of South Africa's four biggest banks closed every Gupta-linked account in 2016, and Atul's dairy farm-linked money, which was held with other lenders, has been frozen. Ajay, the oldest brother, has as-yet-undisclosed charges pending against him. He was last spotted in India and South African police declared him a fugitive. Prosecutors and police haven't revealed whether Rajesh is a suspect in their investigations. On the same day Zuma resigned, police arrested five serving and former heads of Gupta-linked companies on charges of fraud and theft related to the dairy project; they've been released on bail pending trial. Seven companies linked to the Guptas have gone under administration and staff at its two media business say they haven't been paid.
3. How did they really get in trouble?
In 2016, then-Deputy Finance Minister Mcebisi Jonas revealed that Ajay Gupta offered him the post of finance minister and a bribe in exchange for business concessions. Then in June last year, investigative journalists unveiled the so-called Gupta Leaks, a trove of more than 1 million electronic documents that allegedly contained emailed exchanges between the family members and allies that revealed scores of allegedly shady business dealings and money laundering. The Guptas have denied wrongdoing.
4. Has Jacob Zuma been indicted?
No, but a judicial commission of inquiry is due to probe allegations that Zuma allowed the Guptas to unduly influence government appointments and the awarding of state contracts. Courts have ordered the reinstatement of multiple graft charges against Zuma related to an arms deal in the 1990s. The charges were dropped just weeks before he became president in 2009; prosecutors are still evaluating whether to pursue that case. If convicted, many doubt Zuma will ever do jail time — he's already 75 and any lawsuits and appeals could take years to run their course.
5. What about Zuma's son?
Duduzane Zuma, hired by the Guptas in 2005 and their partner in several businesses, has been accused of having brokered meetings where family members allegedly tried to bribe government officials. He's also alleged to have helped the Guptas win unfair preferential treatment from the state for their coal business. He denies wrongdoing and so far hasn't been charged on either score. South African civil-society group AfriForum last year announced plans to privately prosecute Duduzane Zuma on culpable homicide charges after a passenger died when his car collided with a minibus taxi four years ago. Duduzane was last seen boarding a flight to Dubai on Jan. 18.
6. Who has been targeted?
Former Mineral Resources Minister Mosebenzi Zwane was removed from his post in a cabinet purge on Feb. 26 and replaced by mining veteran Gwede Mantashe. The nation's former anti-graft ombudsman said in a 2016 report that Zwane helped a Gupta-controlled company buy a coal mine from Glencore Plc in what appeared to be an underhanded deal. He's also been closely linked to the dairy project that allegedly channeled money to the Guptas and their companies. While Zwane hasn't been indicted so far, a parliamentary panel plans to probe his conduct. He denies wrongdoing.
7. Which other ministers were axed?
Former Cooperative Governance Minister Des van Rooyen also found himself in prosecutors' crosshairs — the anti-graft ombudsman said he had questionable dealings with Gupta family members and lied to parliament about them. The Guptas said Van Rooyen didn't visit them. Then there's former Public Enterprises Minister Lynne Brown. She was responsible for overseeing some of the biggest state-owned companies that have been at the center of the alleged looting spree by the Guptas and their allies. The anti-graft ombudsman said on Feb. 22 Brown inadvertently misled parliament about contracts that existed between the state-owned power utility and a company linked to the Gupta family, and gave President Cyril Ramaphosa 14 days to take action. Brown insists she wasn't involved in operational matters and initially had no knowledge of wrongdoing.
8. What about asset seizures?
South Africa's National Prosecuting Authority said in January it's seeking to recover about 50 billion rand ($4.3 billion) in assets from 17 cases it's pursuing relating to the dealings between the state and the Gupta family and associates. That same month, they obtained an order to freeze 1.6 billion rand of assets held by McKinsey & Co. and a previously Gupta-linked company Trillian Capital Partners in what was seen as the first significant response to corruption allegations. The Organisation Undoing Tax Abuse, a civil-society group, said this month authorities should act to seize Gupta assets including supercars, planes, helicopters and a plethora of properties.
The Reference Shelf
- Bloomberg Businessweek on the Guptas: “The Brothers Who Bought South Africa.”
- The Gupta Leaks investigative articles.
- The former graft ombudsman's report on the Guptas' influence over government.
- The bribes, swag and cozy ties that the ombudsman's report highlighted.
- How the Guptas' inflated the share price of their listed company Oakbay.
- In court documents, Atul Gupta has denied swindling money from a dairy farm.
- A joint research report on how state funds were looted.
- The interview Zuma gave to state television on Feb. 14 before his resignation.
- Bloomberg QuickTakes on how Zuma lost his job and why South Africa lost faith with Zuma and the African National Congress.
- The battle has been playing out in South Africa's courts
To contact the reporter on this story: Renee Bonorchis in Johannesburg at rbonorchis@bloomberg.net.
To contact the editors responsible for this story: Karl Maier at kmaier2@bloomberg.net, Ana Monteiro, Gordon Bell
©2018 Bloomberg L.P.
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