The Organisation Undoing Tax Abuse (Outa) has written to the executives of a Chinese state-owned locomotive manufacturing entity asking for the return of at least US$284 million (more than R5 billion) in South African government funds allegedly looted by the entity on behalf of the Guptas.
The letter was written by Outa’s CEO Wayne Duvenage and sent to Liu Hualong, chairman of the board of CRRC Corporation in Beijing, China, and copied to President Cyril Ramaphosa, the organisation said in a statement.
The letter refers to deals from 2012 to 2014 in which the state-owned China North Rail (CNR) and China South Rail (CSR) were contracted to supply locomotives to the South African state-owned entity rail company Transnet. CNR and CSR amalgamated in June 2015 to form CRRC.
Duvenage’s letter calls for accountability by the CRRC directors for the alleged looting.
In his letter to the CRRC chairman, Duvenage says that Outa has evidence that US$284 million was paid in “unauthorised rebates” to front companies by CSR and CNR, and that these payments continued under CRRC.
These “rebates” were paid to companies controlled by the Gupta family and their associate Salim Essa, who have been heavily implicated in organised corruption networks in evidence before the State Capture Commission, the statement said.
The millions related to 20% of the value in the amounts paid to the Chinese manufacturers from December 2014 to September 2016.
“Outa believes similar payments were made as rewards for all the Transnet locomotive contracts awarded to the same companies from 2012 to 2014, which would have meant up to R9 billion in payoffs.
“We ask that you make the right decision and assist us in placing this specific chapter of the South African State Capture saga to rest, by having the perpetrators held to account and the alleged stolen funds returned to South Africa,” stated Duvenage in the letter to the Chinese SOE’s chairman.
The Chinese economy has benefitted from deals “steeped in dishonesty and abuse of authority in the country.”
Duvenhage says: “Those in authority as these Chinese state-owned entities cannot claim to be ignorant of the facts that clearly expose their conduct as enablers of these unlawful transactions, which were obviously intended for middleman enrichment purposes.”
Regiments such as Asia and Tequesta were registered in Hong Kong in June 2014 with Essa as directer, however, neither of the two companies had any personnel had any track record of business advisory experience.
Outa hopes that Ramaphosa will engage with China’s President Xi Jinping on the matter.
The US Treasury, in October 2019, sanctioned Gupta brothers, Ajay, Atul and Rajesh, alongside their associate Essa, and as a result blocked their financial dealings.
Copies of Duvenage’s letter were also sent to China’s embassy in South Africa and to South Africa’s embassy in Beijing, with evidence provided to both the commission of Inquiry into State Capture and the National Prosecuting Authority.