South African Prosecutors Told to Release Some Gupta Funds
(Bloomberg) -- A South African judge has ruled that state prosecutors cannot seize all of the funds they identified in a corruption case linked to the Guptas, and granted an application brought by the politically connected family.
Prosecutors in January froze assets related to a dairy project in the country’s Free State province, saying that more than 220 million rand ($17 million) destined for the farm was transferred to the Guptas via the Bank of Baroda and a number of companies and associates. The parties fought back, saying there was no evidence they received the proceeds of crime and asking that the funds be released.
Bloemfontein High Court Judge Andre Fouche Jordaan said on Friday he was amending the original preservation order, shrinking the amount of money that the state could freeze to 40.4 million rand. That amount was never disputed by the entities said to have received those funds. He also ruled that the National Director of Public Prosecutions pay the costs of lawyers hired by Atul Gupta and the companies that opposed the order.
State prosecutors earlier this year alleged Atul Gupta illegally received 10 million rand of taxpayers’ money that was meant to have been invested in the government-backed dairy farm. The Gupta family have close ties to former President Jacob Zuma and have been accused of using the association to win state business and influence government appointments. Zuma and the Guptas have denied wrongdoing.
The crackdown on the project came as South African President Cyril Ramaphosa replaced Zuma and promised to combat corruption.
“A good, functioning justice system requires solid investigations that result in a water tight-case; we cannot rush cases as and when the political mood changes,” the Organisation Undoing Tax Abuse, a civil-society group, said in an emailed statement. Anti-crime authorities “need to be consistent in their various duties to avoid obvious mistakes.”
Eight people were arrested last month on charges of fraud and theft linked to the farm. Five serving and former heads of Gupta-linked companies were among them. They were all granted bail, and case is due to resume in August.
Atul Gupta and his brothers haven’t been arrested. Atul’s legal documents about the attempt to freeze the farm funds were signed and stamped in Dubai and Ajay, one of the siblings, was seen leaving South Africa, bound for Dubai, on Feb. 6. South African police, who haven’t detailed the pending charges, have declared Ajay Gupta a fugitive.
In a separate case in Johannesburg on Friday, Export Development Canada, a North American credit agency, filed an application to ground aircraft ZS-OAK, operated by the Gupta family, to retrieve its asset and stop the family from using the Bombardier jet for illicit purposes. EDC originally loaned the Guptas $41 million to buy the plane.
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