Canada’s export bank welcomes order that Guptas return jet to Lanseria
High court orders that the controversial brothers must return their Bombardier jet to SA pending the outcome of court proceedings in England
Canada’s export bank has welcomed a judgment handed down on Monday morning ordering the Guptas to bring their Bombardier jet back to Lanseria airport.
In a ruling handed down in the High Court in Johannesburg Judge Fayeeza Kathree-Setiloane ordered that the Guptas must return the plane to SA pending the outcome of court proceedings in England.
Export Development Canada (EDC) brought an urgent application to ground the aircraft on February 15, a day after the Hawks raided the Gupta compound in Saxonwold and announced that the family patriarch Ajay Gupta was considered a fugitive from the law.
The Civil Aviation Authority (CAA) has also been ordered to deregister the aircraft with the tail number ZS-OAK, which effectively means it will not be able to fly anywhere in the world. The CAA previously said it would not oppose the application. The Guptas have 15 days to comply and are expected to appeal the ruling.
"EDC is pleased with the favourable ruling and expects an orderly handover of the aircraft pursuant to the court order," spokesman Phil Taylor told Business Day on Monday.
The case is making front-page headlines in Canada, with the bank coming under fire for advancing state-backed loans to clients embroiled in corruption scandals, including the Guptas.
During court proceedings on Friday the Canadian export bank painted a lurid picture to the court last week of the Gupta empire crumbling in SA as evidence mounted that the family had made its money from looting state entities.
It cited the closure of Gupta bank accounts, their holding company delisting after sponsors and auditors jumped ship, a corruption case alleging they must repay R7bn misappropriated from Eskom, and preservation orders obtained by the Asset Forfeiture Unit (AFU), including for money from Westdawn, the Gupta company that leases the jet.
Westdawn’s decision to switch off the aircraft’s public tracking device on February 4 and the Hawks raid prompted the bank to bring the urgent application to ground the jet, fearing the Guptas could use it to flee the country or commit crimes. It has since been spotted flying to Russia.
EDC said in court last week that it was also concerned that the AFU could seize the aircraft and attach any repayments if these were deemed the proceeds of crime.
The Guptas argued that EDC had unlawfully cancelled its loan agreement after they had inadvertently defaulted on a repayment in October last year because the Bank of Baroda had failed to make the payment.
The payment was later made but the Guptas could make no further payments because the bank cancelled the loan agreement, citing reputational damage. The Guptas still owe the bank $27m.
Advocate Owen Cook, appearing for Atul and Chetali Gupta, told the court last week that the Canadian bank had known about allegations that the Guptas were corrupt before they loaned them the money in 2015 as these had been widely reported since 2013, including in Canada.
The Guptas gained international notoriety when their guests were allowed to land at Waterkloof airforce base and received police VIP escorts for a family wedding in Sun City in 2013. Allegations that they had looted public funds destined for the Estina dairy first surfaced in 2013 too.
Negative local and international press coverage of the Guptas escalated after former public protector Thuli Madonsela published her state capture report in October 2016 and intensified when a flood of e-mails implicating the family in corruption scandals were leaked to the media in 2017.
"There is no difference in the nature of what they are aware of now and in August last year," Cook said, accusing the bank of engaging in a "face-saving exercise" to salvage its own "somewhat shady reputation" by seeking to end its relationship with a client tainted by corruption allegations.
Cook also pointed out on Friday that the AFU preservation orders in the Estina matter had been set aside earlier that morning and could not be used to justify grounding the jet.
However, the court has ruled that the aircraft should be returned to ECD pending the outcome of proceedings in England.
EDC lent the Guptas $41m, which is 80% of the purchase price, to buy the Bombardier Global 6000 in April 2015.
Around the same time the bank provided $450m in funding for Bombardier’s sale of 240 locomotives to Transnet, a state entity whose board was stacked with Gupta deployees. Questions were raised about this contract after the cost increased by 40% from R8.2bn to R13bn.
Business Day revealed in January that Trillian executive Salim Essa allegedly asked Bombardier at a meeting in Zurich for a 20% fixer fee for the Guptas or a discount on the jet in return for the Transnet contract, though the Canadian company has denied any knowledge of the offer.
Transnet launched an investigation last year into allegations that train manufacturers had paid kickbacks to Gupta-linked companies to secure locomotive contracts worth R54bn.
The parastatal engaged Werksmans to investigate but became engaged in a spat with the law firm in February when it described its investigation as "incomplete and inconclusive", saying it did not warrant action against employees.
Werksmans had recommended that disciplinary action be taken against those fingered in the report and said it was surprised at Transnet’s decision.