International financial system is culpable in Gupta looting

The international financial system is culpable and must now track down the money looted by the Guptas and repay it to the South African Treasury.

This was the call by British politician Lord Peter Hain in his keynote address at the South African Property Owner’s Association (Sapoa) 2019 Convention in Cape Town on Wednesday.

South African-born Hain, an anti-apartheid activist, and in more recent years a vocal critic of corruption linked to the Gupta family and former President Jacob Zuma, said monies looted by the Guptas from state-owned enterprises like Eskom, Transnet and SAA needs to be returned to the country.

“It has been very painful [to watch], especially for veterans of the freedom struggle. Those people did not sacrifice so much to have their legacy looted. We’ve got to reclaim the Mandela values of integrity, good governance, social justice, equality and democracy,” said Hain.

“No global corporate should have anything to do with corruption, white-washing corruption or getting fat fees from looters, because it takes two to tango in the corruption business,” he said.

“The significance of this for global corporates, is that it was alright for them to take part in this corruption business under President Zuma and the Gupta brothers, when it was confined to domestic media and domestic politics here in SA. They seemed to be continuously getting away with it. But, when it went global, that’s when they got damaged,” he added.

Bell Pottinger

“When I named Bell Pottinger and asked the (British) government to take action against them for their vile, racist campaigns on behalf of the Zumarites and Guptarites, they (Bell Pottinger) went bankrupt in a week,” he noted.

Hain said when he later contacted the finance minister in Britain to “take action to stop the systematic, transnational financial crime network” facilitated by the Guptas and Zumas, citing the Estina Dairy Farm project, soon major global media publications such as the Economist and New York Times were covering it.

He then went on to name British financial institutions and others such as HSBC, Standard Chartered and Bank of Baroda, which he said were “facilitating and acting as conduits” for the “massive laundering of billions of rand” mainly through Dubai and Hong Kong.

“They all came to see me at my office at the House of Lords … Why did they do that? Why did the international media report that for the first time? Why were they suddenly feeling the heat, these global corporates? Because, their activities here in SA in conniving with corruption had gone global. And, the same thing happened to KPMG and McKinsey and the international law firm Hogan Lovells,” the British politician said.

“The lesson is this – that in today’s world, discreetly or transparently, you simply cannot afford to be associated with state capture or corruption, or else you risk running massive reputational damage and lost business, which damages your own bottom line. We’ve seen that with KPMG losing billions in contracts. We’ve seen it with McKinsey. We saw it with Bell Pottinger,” he noted.

War on corruption

Hain said there needs to be a war on corruption in South Africa, which he noted President Cyril Ramaphosa is now trying to lead.

“President Ramaphosa has my support on the war on corruption, on organised crime, financial crime and tax evasion. The international business and financial community needs to support and cooperate with the South African Revenue Service and the Treasury, maybe with the local business community helping too with top legal, accounting, investigative and intelligence capabilities. It can’t just be business as usual any more than it can be government as usual, as it was in those disastrous Zuma years,” he said.

Hain said that there also needed to be cooperation internationally from countries, reiterating that the “main conduits” for money laundering by the Guptas has been via Dubai and Hong Kong.

“I think that the South African government is entitled to cooperation from those two jurisdictions, and from China, in tracking down this money and returning it. Dubai is the main centre for collecting money to make cash payments to bypass international anti-money-laundering laws,” he noted.

“I say this to the banks as well. HSBC and the rest must do more than they told me in coming to protest that I was damaging their reputation by naming them. They must do more than just closing old bank accounts and claiming client confidentiality stops them doing any more,” said Hain.

Suren Naidoo was hosted at the Sapoa Convention in Cape Town. 

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