A police convoy leaves the home of the Gupta family in Johannesburg on February 14 2018. Picture: REUTERS
A police convoy leaves the home of the Gupta family in Johannesburg on February 14 2018. Picture: REUTERS

When the Hawks swooped on the Gupta compound in Saxonwold in a dawn raid on Wednesday, they crossed a line many considered unthinkable just days earlier.

By late afternoon word had spread that the Hawks were looking for Atul Gupta and two Gupta executives after arresting another family member and three Free State government officials. All are expected to appear in the Bloemfontein Magistrate’s Court on Thursday.

The Hawks have confirmed that the raid and arrests formed part of the unit’s investigation into allegations of fraud, theft and money laundering related to the Estina dairy project in the Free State. Several other Gupta-related residences and offices in Gauteng were also raided.

These events signify a sea change in law enforcement efforts involving high-profile corruption cases.

Not only will a family close to President Jacob Zuma accused of wholesale looting appear in the dock at last, but the case will undoubtedly implicate his son Duduzane Zuma, Mineral Resources Minister Mozebenzi Zwane and, at some point, probably ANC secretary-general Ace Magashule too.

The only thing that had changed between Monday and Wednesday was that the ANC had recalled Zuma as president. After much prevarication on Wednesday, he resigned as president of the republic with immediate effect late that night.

A key question, in a constitutional democracy that’s supposed to subscribe to the rule of law, is why this didn’t happen months or even years ago rather than on Zuma’s last day in office.

The case has been under investigation by government officials since 2013 and by the Hawks since 2016. The DA pointed out on Wednesday that the delays in raiding Gupta properties will make it more difficult to build cases against them because of the risk that incriminating documents have been destroyed.

"If any incriminating evidence has been found at the residence, it would be by accident as the compound would likely have been cleared out months ago," the party said.

Moreover the looting, judging from affidavits previously filed by the National Prosecuting Authority’s Asset Forfeiture Unit (AFU) in support of preservation orders, was pretty blatant.

These provide evidence of Free State agriculture department officials colluding with the Guptas to siphon off over R220m meant to help poor farmers establish a dairy through a company called Estina run by Gupta IT sales manager Kamal Vasram.

The first government grant, an advance of R35m "to kick-start the project", was paid into Estina’s account in April 2013 when it held just R9,690. Over 29 months between April 2013 and May 2016 R220m was paid into Estina’s bank accounts.

It turns out, from a sworn statement provided by Anna Fourie, a senior official in the Free State treasury, that a maximum of R5m at a time should have been paid.

Fourie found that the contract had been drafted contrary to the interests of the department and reported it to the state law adviser in the office the premier — Magashule.

She was advised the contract was irregular and needed reviewing. Legal opinion found the contract was irregular because proper procurement processes hadn’t been followed and it wasn’t budgeted for.

Of the R220m paid to the project, only R2.4m was actually used for farming. The rest was siphoned off to the Gupta family and their associates through a constellation of companies and bank accounts.

Some of it was allegedly laundered via front companies in the United Arab Emirates before being used to bankroll the Gupta wedding at Sun City. One payment of R10m went directly to the personal bank account of Atul Gupta.

Dumisani Cele, a Treasury official who began to investigate the payments in 2013, immediately ran into stiff headwinds from the start.

The head of the Free State agriculture department, Peter Thabethe, who had been appointed to oversee the project, declared a departmental dispute and refused to co-operate.

AFU investigators later found that Thabethe could provide no evidence of the research he’d claimed to have done to motivate for the project.

Thabethe’s chief financial officer, Seipati Dlamini, warned Cele that his questions could get him killed, according to the AFU’s papers.

One official who asked awkward questions about the project, Free State agriculture department auditor Moses Chaka, reportedly died from his wounds after being hijacked and dragged down the road tied to his bakkie.

No conclusive evidence has been found linking Chaka’s death to the Gupta looting scheme in Vrede. But amaBhungane recently reported that his family pointed to suspicious delays in investigating the case, which are continuing even though the case has been referred to an inquest court.

Despite the threats and lack of co-operation he faced, Cele established that the department had signed off on the deal without followed its own supply chain rules and failed to provide valid reasons for deviating from them.

Cele concluded that Thabethe and Dlamini had abused their powers in appointing Estina to run the project. Even more damning, he found there were no beneficiaries.

Zwane is directly implicated in this massive looting scheme.

In his affidavit, AFU senior investigator Sam Schalkwyk said Zwane had identified a 4,400ha state-owned farm, Krynaauwlust, near Vrede in the Free State that could be leased rent free to the project for 99 years. It was located in a remote area and was "specifically chosen in order to avoid detection".

"The project was specifically chosen on the advice of the then MEC" even though a feasibility study said the land wasn’t suitable for a dairy, Schalkwyk concluded.

Later, when Zwane became mineral resources minister, he appointed Dlamini as his chief of staff and then as a deputy director with the power to approve or revoke mining licences, allegedly without following proper procedures.

More details of the Gupta family’s audacious looting scheme will be aired in court as this case unfolds. If anything, this case should highlight the need to rebuild a professionally run criminal justice system free of political interference.

stephanh@businesslive.co.za

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