The Gupta Empire is falling

Say goodbye to that Porsche, Duduzane.

23/02/2018 11:12:21

The Gupta Empire is falling 

The once-powerful Gupta empire is collapsing, with at least eight businesses filing for business rescue this week. This means that the hundreds of millions of rands in this empire have now disappeared.

“It was inevitable the empire would fall. South Africans are fierce defenders of justice. With their support OUTA, other civil society organisations and the media have worked tirelessly to expose and oppose their looting and to see justice prevail,” says Ben Theron, OUTA’s COO.

The affected companies are:

        Optimum Coal Mine (Pty) Ltd 

        Optimum Coal Terminal (Pty) Ltd 

        Koornfontein Mines (Pty) Ltd 

        Shiva Uranium (Pty) Ltd 

        Islandsite Investments One Hundred and Eighty (Pty) Ltd 

        Confident Concept (Pty) Ltd 

        Tegeta Exploration and Resources (Pty) Ltd 

        VR Laser Services (Pty) Ltd 

The mines form the core of the Gupta empire and are crucial for providing coal to keep two Eskom power stations running, ensuring energy security

The empire is believed to have been founded on money stolen from our Government, which is now hiking taxes to make ends meet.

Islandsite and Confident Concept own properties which include the notorious Gupta compound and Mzwanele Manyi’s TV and newspaper offices. Confident Concept owns Duduzane Zuma’s Porsche.

Optimum and Koornfontein supply coal to Eskom, but are now failing to meet their contracted supply requirements which affects Eskom’s ability to run two of the power stations efficiently.

Employees at Optimum mine were this week desperately trying to find out if they would be paid and still have jobs.

“OUTA sympathises with the hundreds of employees and their families who now face an uncertain future,” says Theron.

"Every effort should be made to keep the mines remain open to ensure job security for the miners and continuation of crucial coal supply to Eskom. The Aurora mine saga was a very similar issue to this. Innocent people took their own lives due to the pressures caused by greed from the Zuma power elite," says Theron.

The business rescue practitioners will be crucial in ensuring the future of the mines.

"Those involved in state capture must all go to jail. Not only are they stealing tax money, they are ruining the the lives of good people."

OUTA believes that Government has the responsibility to remedy this situation that they were complicit in creating. Eskom and the Ministry of Mineral Resources are particularly implicated in enabling this situation.

The companies all filed for business rescue on 20 February.

AmaBhungane reported that Optimum and Koornfontein went into business rescue.

OUTA has found records at the Companies and Intellectual Property Commission (CIPC) showing that at least eight Gupta companies filed notices to start business rescue proceedings.

Islandsite and Confident Concepts own 25 properties bought for a total of about R173 million. These deals involved cash purchases of R53 million while bonds totalling R888 million were registered. OUTA previously exposed these deals.

Most of these bonds were registered through the Bank of Baroda, however the State Bank of India and FirstRand also held some. OUTA previously exposed the excessive bonds on these properties and warned the banks against the Guptas.

The properties appear to include premises where Sahara Computers, The New Age and ANN7 are based. Although The New Age and ANN7 were sold in August last year to Mzwanele Manyi in a sweetheart deal which involved a 100% loan from the Guptas, the collapse of the Gupta empire may now leave Manyi without any offices for his new media business.

In 2015, the Guptas used Tegeta Exploration and Resources to buy Optimum Coal Holdings (which owns Optimum and Koornfontein mines) from Glencore in what seemed to be a hostile takeover, with illegitimate financial help from Eskom including a R659 million prepayment for coal. Brian Molefe, Anoj Singh and Matshela Koko, all then Eskom executives, engineered Eskom’s aid to Tegeta. Last year OUTA laid charges against Molefe, Singh and Koko.

The legally required Optimum and Koornfontein mine rehabilitation funds unlawfully disappeared into accounts in the Bank of Baroda. These funds are meant to be held in trust to ensure that the future costs of rehabilitating the mines are covered. Last year OUTA froze these funds at the bank.

The coal mines are the key supply for two power stations, which thus threatens their ongoing operation.

“Eskom must be tasked with providing mitigation options to salvage these mines and implement an appropriate intervention to lower the coal bill. Eskom should provide alternative cost-effective solutions urgently,” says Ronald Chauke, OUTA’s Portfolio Manager for Energy.

“Eskom should also not be allowed to offload these extra costs onto its customers through future pricing applications. The National Energy Regulator should not allow this.”

OUTA is a proudly South African civil action organisation, that is purely crowd funded. Our work is supported by ordinary citizens who are passionate about holding government accountable and ensuring our taxes are used to the benefit of all South Africans.