The Gupta Empire is falling
At least eight businesses in the Gupta empire filed for business rescue this week. This means that the empire once worth hundreds of millions of rand is now worthless.
“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.
Islandsite and Confident Concept own the properties in Saxonwold and Midrand which include Mzwanele Manyi’s TV and newspaper offices and the notorious Gupta compound. 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 this week desperately tried 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.
“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. 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.”
OUTA believes that Government helped to create this disaster so must take responsibility for cleaning up. Eskom and the Ministry of Mineral Resources are particularly implicated in this.
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 documentation to start business rescue proceedings.
Two of those businesses – Islandsite and Confident Concepts – between them 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.
Most of these bonds were registered through the Bank of Baroda, although the State Bank of India and FirstRand also held some. OUTA previously exposed the excessive bonds on these properties and warned the banks to dump 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.”