Panama Papers reveal offshore payments by Madagascar’s seafood king

Offshore entities played a key role in a network of companies owned by a rich and powerful shrimp merchant in the African island nation of Madagascar, according to documents from the International Consortium of Investigative Journalists Panama Papers investigation.

ICIJ collaborated with non-profit environmental science and conservation news organization Mongabay to explore emails, contracts and company records that showed how magnate Aziz Ismail moved millions of dollars among offshore companies.

Ismail, a French citizen born in Madagascar, entered Madagascar’s shrimp industry in 1973. His company, Unima, is now managed by his son Amyne Ismail and has subsidiaries around the world.

The company is the largest player in Madagascar’s $75 million shrimp industry, which has been criticized for damaging the environment, on the island nation where three in four people live on less than $1.90 a day.

Aziz Ismail also has owned a British Virgin Islands shell company Ergia Ltd. since 2000, according to files dating from 2000 to 2016 obtained from the law firm Mossack Fonseca.

Ismail became the sole shareholder of Ergia Ltd. in 2001 after setting up the company months earlier. Ismail and his son, Amyne, were directors of Ergia Ltd. The company did business in Madagascar and Monaco, according to documents.

The Panama Papers files include a 2014 contract under which Ismail’s company, Ergia Ltd. agreed to perform one year of administration and management services and “strategic thinking” on the development of Unima Europe, a Monaco company. In exchange, Unima Europe would pay Ergia Ltd. $1.32 million, according to the contract, which was signed by father and son.

It is unclear how Ergia Ltd. in the BVI would provide the consulting services described in the contract. The company appears to have no employees and no independent office, according to a slim financial statement of the company sent via to the law firm Mossack Fonseca to comply with record keeping requirements.

In effect, the Ismails appear to have shuffled the money between two companies they owned, from one country to another.

In a January 2016 email, Unima’s wealth managers asked Mossack Fonseca to transfer the $1.32 million owed to Ergia Ltd. under the consultancy agreement to another Ismail family company in Luxembourg.

Jason Braganza, an economist with nonprofit Tax Justice Network Africa, told ICIJ that if the consultancy agreement related to advice given for operations in Madagascar, “the immediate red flags here are that the companies are reporting revenues generated in Madagascar as being tax liable in BVI and Monaco.”

“This is tax avoidance 101,” he said.

The company produced little paperwork for Mossack Fonseca until 2012 when financial crime regulators in the British Virgin Islands contacted the Panama Papers law firm. The Financial Intelligence Agency did not tell Mossack Fonseca why Ergia Ltd. was under scrutiny. It demanded details on the owner, the company’s activities and its bank accounts, according to a document from the Panama Papers.

Responding to the BVI government’s 2012 request, Mossack Fonseca told regulators that Aziz Ismail owned Ergia Ltd. The law firm provided other information that included confidential financial statements that reveal some of the Unima group’s offshore activities.

At the end of 2010, for example, Ergia Ltd. reported a loss of $7.92 million. The company’s financial statement records no obvious expenses for employees. The documents also show that Ergia Ltd. was owed $7 million by a related company based in another low-tax country, Mauritius.

Tax inspectors from Madagascar and other experts said the use of multiple offshore companies raised the risk of lost taxes for one of the world’s poorest countries.

“In general, the use of two countries with zero tax (the BVI) or low tax (Monaco) is indicative” of an attempt by a group of related companies to pay as little tax as possible on its global activities, said Tovony Randriamanalina, an international tax researcher at Université Paris-Dauphine in France.

“This is exactly how groups avoid taxes in developing countries like Madagascar.”

The Ismails and Unima did not respond to repeated requests for comment, including questions about why government regulators were interested in Ergia Ltd. or why Unima’s Madagascar shrimp export business used offshore companies in the BVI and Mauritius.

Of Indian descent, the extended Ismail family has operated in Madagascar for five generations and is one of the country’s economic titans. Forbes last year ranked one of Ismail’s cousins as among Madagascar’s richest multi-millionaires. Unima’s founder, Aziz Ismail, supported former prime minister Emmanuel Rakotovahiny, according to the regional publication La Lettre de l’Ocean Indien.

Madagascar’s shrimp and prawns are the country’s fifth-most valuable export after vanilla, nickel, cloves and apparel. Every year, Unima sends thousands of tons of wild and cultivated tropical tiger shrimp from trawlers and aquaculture farms to Europe, Japan and the United States. Many of the prized crustaceans make their way to France, where the company’s products were the first from Madagascar to receive the French government’s quality approval.

Environmental scientists and local fishermen have criticized major players in the shrimp industry for depleting Madagascar’s natural resources. Shrimp trawling nets of the kind used by Unima drag along seabed floors in ways scientists have compared to clear-felling old-growth forests, Mongabay previously reported.

When a company profits from techniques that damage the environment and its owners store some of those profits offshore, it can compound the impact on the home country, creating economic losses on top of environmental damage, said Victor Galaz, associate professor at Stockholm University, who recently authored a study on the links between tax havens and environmental degradation in global fisheries.

“If this is part of an aggressive tax planning scheme, it means loss of revenues for the country where the actual economic activities are taking place,” Galaz told Mongabay and ICIJ after reading about the Unima and Ergia Ltd. transactions.

Reporting by

Will Fitzgibbon

Edward Carver

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Crowds to See Angola’s Latest Prisoner Show Corruption War Is Serious

By

Candido Mendes and Henrique Almeida

• Son of former president Dos Santos held pending investigation
• Crackdown may mark sea change for nation mired in corruption

Dozens of Angolans crowd the gates of the capital’s main prison hospital, jockeying for a glimpse of an unexpected new inmate: the son of the man who ruled the southern African nation for almost four decades.

Jose Eduardo dos Santos’ son, Jose Filomeno, is only the most high-profile prisoner at the facility in Luanda, as Angola’s new president wages an anti-graft war that’s thrown the former ruling elite into disarray. TV crews, relatives in expensive cars and ordinary citizens have all flocked here, witnesses to a turning point for the oil-producing country that’s long been ranked one of the world’s most corrupt.

“I never thought I was ever going to see this,” Maria Fernanda, a 50-year-old local pharmacist, said of the high-profile detentions that also include a former police chief and an ex-transportation minister. “It’s unbelievable.”

The crackdown is the latest in a series of bold steps by President Joao Lourenco, who was elected last year and speaks of a “duty and obligation” to crush corruption to save Angola’s ailing economy. Arrests have extended to the Dos Santos family and its allies, who’re accused of amassing fortunes through their grip on the nation’s oil, diamonds and other resources.

Fancy Cars

“The arrest of Jose Filomeno dos Santos marks an important symbolic step in President Joao Lourenco’s anti-corruption drive,” Fitch Solutions Macro Research said in a note this week. While it shows the government “is driving some moderate improvement in transparency and in reducing corruption,” action against “a few high-profile individuals will not be sufficient to resolve what many describe as endemic levels of corruption within key Angolan institutions,” it said.

Sao Paulo, a medium-security prison hospital with 20-foot-tall walls that’s now being used for high-profile inmates as well as patients, is a far cry from the glitzy skyscrapers on Luanda’s oceanfront the elites are accustomed to. On a recent Friday, drivers of cars including a brand new Lexus and a Porsche Carrera turned off the dirt road into a visitors parking area -- a sign of the prisoners’ wealthy connections.

Leading the Battle

Not spotted visiting so far: Isabel dos Santos, the ex-president’s eldest daughter and Africa’s richest woman. She’s the target of a probe looking into a $38.2 million transfer that was made at state-owned oil company Sonangol before she was fired as chairwoman last year. She has called the allegations politically motivated.

Lourenco, 64, has said the ruling People’s Movement for the Liberation of Angola needs to lead the anti-graft battle. That’s “even if the first to fall are militants or even senior officials of the party that have committed crimes,” he told delegates on Sept. 8 as he replaced Dos Santos as its head.

He’s also pushing for funds he said were illegally moved abroad to be returned to Africa’s second-biggest oil producer, warning that Angolans who don’t comply by year’s end will face prosecution. Central bank Governor Jose Massano estimates at least $30 billion is held abroad, including legal deposits.

Reversing Impunity

Recent moves show the country “is finally moving in the direction of accountability and reversing decades of impunity, nepotism, patronage and corruption,” said Paula Roque, an independent political analyst who formerly worked on Angola for the Brussels-based International Crisis Group. But the actions are addressing “just the tip of the iceberg” and “other cases need investigation and competent, swift and structured legal action,” she said.

 

There’s some dissent. Last week, Bento Kangamba -- a former army general and the owner of football team Kabuscorp Sport Clube do Palanca -- criticized what he called Lourenco’s heavy-handed approach.

“We won’t allow things that have nothing to do with the good of society and aim to destroy the party and its militants to happen,” Kangamba, who organized the ex-president’s rallies, told Voice of America.

Jose Filomeno, 40, is accused of trying to siphon $1.5 billion from the central bank by claiming the money would help secure $35 billion of financing for Angola, the Finance Ministry said in April. The move allegedly occurred days before Lourenco was elected president, as Angola grappled with zero economic growth, soaring inflation and a dollar shortage.

Banking Accusations

The first $500 million was transferred in August 2017 from Angola’s central bank to an HSBC Holdings Plc account in the U.K. That initial installment was blocked by U.K. authorities suspecting foul play, and part of the $500 million has since been returned to Angola.

Jose Filomeno vowed to cooperate with the investigations. He now spends much of his time in the prison’s VIP section, where he and others watch TV and eat food brought by their relatives, according to a guard who asked not to be identified because he isn’t authorized to speak to the media.

The guard said the ex-president’s son typically declines visitors and responds to prison officials with single words. Former Transportation Minister Augusto Tomas is more gregarious, spending time with his relatives, friends and religious officials, he said.

Lourenco, popularly known as the “terminator,” isn’t just going after the big fish. A public official was arrested this week for allegedly seeking bribes of just 1,000 kwanzas ($3.32) from candidates applying to be professors in one province, the local Novo Jornal newspaper reported Thursday, citing the prosecutor’s office.

On the day Dos Santos’ son was arrested, Lourenco presented what he dubbed a “New Angola” to potential investors in New York.

“Angola has entered a new political cycle,” he said, touting economic reforms and the war on corruption. “In only one year, this is the Angola that I present to you, with a new business climate that is investor-friendly.”

(Updates analyst’s comment in paragraph under Reversing Impunity sub-headline.)

Over the past 17 years, poachers have stripped South African coastal waters of at least 96-million abalone, according to a new report released today by TRAFFIC, the international wildlife trade monitoring network. 

Efforts to curb the illegal trade have roundly failed. Once abundant, the population of South African abalone (Haliotis midae), a sea molusc, is declining at unprecedented levels. 

On average two thousand tonnes of abalone are bagged annually by poachers – 20 times the legal take – in an illicit industry estimated to be worth at least US$60million a year. Abalone is prized as a delicacy in parts of Asia, notably China.

Driven by sophisticated transnational criminal networks and local gangs, the illegal abalone trade has been fuelled by deeply entrenched socio-economic disparities in the Western Cape, bitterly contested fishing quotas, drugs, and gang violence.

Despite the very real threat that South African abalone could go extinct if poaching levels continue unabated, it is not currently listed on CITES and beyond South Africa the trade in Haliotis midae remains unregulated. That lack of regulation means that once abalone shipments have been smuggled out of South Africa to neighbouring African countries, they can easily be laundered without fear of law enforcement action.

African tourism alarmed by rhino, elephant losses

CAPE TOWN (AFP) - 

Animal conservation in Africa has suffered several setbacks in recent months prompting experts at an African tourism conference this week in Cape Town to warn about the cost to the travel industry.

"Obviously it's negative," said the African Tourism Association's (ATA) managing director Naledi Khabo, who spoke at the inaugural event organised by Airbnb.

"Whether it's people or animals, you see them being killed or slaughtered in such a terrible manner -- it has a negative impact."

Kenya was thrust into the conservation spotlight when an effort to move endangered black rhinos between national parks, launched with great fanfare in June, left 11 of the animals dead.

"It's very clear it was not managed well by my officers -- and we took action on that," said Kenya's Tourism Minister Najib Balala, who was the public face of the project.

Balala insisted that tourists considering visiting would not be deterred by the incident but industry experts have warned that such setbacks could hurt the continent's appeal.

"It does impact the overall pan-African perception as well, which in turn has a negative impact on tourism," added Khabo.

The cost of environmental crime to developing countries is estimated to be more than $70 billion a year.

Africa is at the epicentre of global poaching and trafficking of many species, with elephants coveted for their ivory tusks and rhinos sought for their horns which are used in traditional Asian medicine.

- 'A very aggressive approach' -

Botswana, which has Africa's largest elephant population, is on the frontline of the battle against the illicit ivory trade.

But it was recently rocked by a report from Elephants Without Borders that a poaching spree had wiped out as many as 90 of the animals.

While the government and some scientists strongly disputed the findings and insisted they were overstated, the damage had already been done.

"What is sad, particularly about the Botswana incident, is that the headlines came out about what happened -- but what we don't understand is why and what next," said travel author Anita Mendiratta.

In South Africa, rangers have been forced to take ever more extreme steps to protect the country's safari endowment alongside an effort to prosecute the criminal bigwigs profiting from the lucrative trade.

Khabo, who speaks for the African tourism industry, praised South Africa's anti-poaching successes which have included three high-profile arrests of kingpins linked to poaching.

"It's critical that, on a policy level, the government and the tourism boards take a very aggressive approach and to have truly severe consequences to individuals who are found guilty," she told AFP.

Balala, the Kenyan tourism minister, said his country's anti-poaching efforts were also proving effective.

"The numbers of rhinos in terms of protection has gone up -- over 1,200 rhinos we have in Kenya from almost 300 30 years ago. We have 35,000 elephants, 30 years ago we had only 16,000."

- 'Traveller activism' -

Mendiratta said that effective anti-poaching was increasingly being demanded by tourists.

"When it comes to poaching, when it comes to elephant riding even, travellers are saying 'it's not right'," she said.

"Traveller activism has become an important part of our industry."

Loserian Laizer, who spent nine years as a ranger in Tanzania before joining the Safarisource service which connects travellers directly to safari organisers, said poaching can make wildlife tourism difficult.

In South Africa's Kruger National Park for example, visitors have complained about the noise made by the increasing number of airborne anti-poaching patrols.

"But I can say we are winning the fight against poaching," said Laizer. "There's a big up turn in people understanding we need to protect the wildlife."

Tanzania was working to educate visitors about the perils of poaching and the risks of purchasing ivory and rhino horn products, he said.

Laizer said the threat to wildlife and the impact on the tourism industry did not just come from poaching or conservation blunders.

"A problem is people trying to build many facilities to accommodate the tourists and the impact is we are destroying the environment so we need to control that," he said.

© 2018 AFP

Fury at release of rhino 'pseudo-hunt' kingpin

Angolans' seized cash, car forfeited to state

Live sharks seized, 13 arrested for illegal wildlife trade

The Citizen, ANA, 25.7.2018 11:48 am

The environmental affairs department says the live sharks were being exported to the Netherlands.

Four live sharks, a live pangolin, 700kg of abalone, ivory and rhino horn were seized, and 13 people arrested on a range of illegal wildlife trade charges as part of South Africa’s participation in global Operation Thunderstorm in May 2018.

Department of environmental affairs spokesperson Albi Modise said the INTERPOL Wildlife Crime Working Group had, during its meeting in Singapore in 2017, discussed the month-long global operation against illegal trade in wildlife and timber.

“Codenamed Thunderstorm, the operation had targeted the people and networks behind cross-border wildlife crime.”

Modise said during the global operation INTERPOL announced that 1 974 seizures were recorded, and 1 400 people arrested during investigations and searches in 92 countries during the month of May.

“Among the seizures worldwide were 43 tonnes of wild meat including bear, elephant, crocodile, whale and zebra; 1.3 tonnes of raw and processed elephant ivory; 27 000 reptiles including 869 alligators/crocodiles, 9 590 turtles and 10 000 snakes; and almost 4 000 birds including pelicans, ostriches, parrots and owls.

“In addition, officials had seized 48 live primates, 14 big cats including tiger, lion, leopard and jaguar, and several tonnes of wood and timber.”

The department said the operation saw eight tons of pangolin scales seized worldwide, including almost four tonnes by Vietnamese maritime authorities on board a ship arriving from the Democratic Republic of Congo.

“In South Africa, the South African Police Service; the Directorate for Priority Crime Investigations (Hawks); Sars Customs; the Environmental Management Inspectorate (Green Scorpions) from the Department of Environmental Affairs, SANParks,  the provincial conservation authorities and the Department of Agriculture, Fisheries and Forestry law enforcement officers participated in the operation.

“Attention was paid to transnational trafficking routes originating at airports and other ports of entry and exit between South Africa and Europe, Botswana and Zimbabwe, as well as to international mail centres and the value chain of rhino horn trafficking syndicates.”

Modise said among the successes recorded was the confiscation of four endangered Spotted Ragged Tooth Sharks, also known as the Sand Tiger Shark or Dusky Shark, at Cape Town International Airport during an inspection of a container holding the illegal consignment.

“The seizure of the live sharks which were being exported to the Netherlands is an indication that the problem of live shark smuggling is bigger than initially believed as demand for live sharks from aquariums worldwide has increased.”

He said the sharks were seized after it was determined that they were being exported without the required permits in terms of the Marine Living Resources Act and the Marine Threatened or Protected Species Regulations.

“The sharks had originated from Port Alfred. A laptop, cellphone and documents were seized during the operation. No arrests have been made and the investigation is continuing.”

Modise added that two men were arrested in Daveyton by the Hawks, SANParks and the Environmental Management Inspectorate of the Department of Environmental Affairs  for allegedly dealing in rhino horn.

“The arrest was the result of a two-year investigation by the Hawks, and the Green Scorpions in SANParks, to identify the criminal supply chain and receivers of rhino horn in Gauteng.”

“Mandla Mashele, 37, and Kelvin Malapane, 38, were arrested for illegally buying rhino horns, contravention of endangered species regulations, racketeering and money laundering.”

Modise said two suspects were arrested for the illegal possession of elephant ivory by customs officials at the Ramatlabama Border Post between South Africa and Botswana.

“The suspects were travelling to South Africa when they were arrested during a search of their vehicle. Two kilogrammes of ivory was confiscated.”

He said in Pretoria, six men were arrested for the illegal possession of a Pangolin.

“The operation, led by the Hawks, followed a suspect offering a pangolin for sale to a policeman. The pangolin was seized and sent for veterinary care.”

In the south of Johannesburg, in Walkerville, three men were arrested on 11 May for the unlawful possession of 700kg of abalone valued at R3.5 million, and operating a fish processing facility without a permit.

“Members of the police and the Green Scorpions had executed a search warrant on the facility. A total of 18 000 units of abalone were seized.”

In Durban KwaZulu-Natal, members of the Green Scorpions, customs officials and Fisheries Control Officers of DAFF searched a ship in Durban harbour, while ad-hoc tailgate and container searches were also done in the harbour.

“During dockside inspections by the Green Scorpions and Fisheries Control Officers of the validity of fishing permits of local fishermen, abandoned catches that included mussels and under-sized fish were seized.  No arrests were made. No illegal items were recovered during search of items at the International Mail Centre in Durban.”

5 nabbed in US$4m, 98kg gold haul

Freeman Razemba Crime Reporter

Some of the cash confiscated.

POLICE raided a Harare house following a tip-off on Thursday and recovered US$4 million in cash and 98 kilogrammes of gold stashed in suitcases.

National police spokesman Chief Superintendent Paul Nyathi confirmed the raid yesterday, saying five suspects had been picked up for questioning in connection with the case.

It is believed the five suspects intended to smuggle the money and gold out of the country.
Police sources said they received a tip-off that the suspects were illegally dealing in gold at their premises in Borrowdale and went to investigate.

Police have since confiscated the money and gold as investigations continue.
The cash was in US$100, US$50, US$20 and US$10 denominations.

The suspects were taken to Borrowdale Police Station for further investigations.
Chief Supt Nyathi said investigations were being done in consultation with other State agencies.

“The Zimbabwe Republic Police is still verifying the origins of the 98kg of gold and cash which were recovered at a certain company’s premises in Borrowdale on 5th July 2018,” he said.

“Investigations are being conducted in consultation with other relevant State institutions such as the Reserve Bank of Zimbabwe and Fidelity Printers. The gold and cash have since been secured by monetary authorities in the country.”

Chief Supt Nyathi said the public would be advised in due course on the progress of the verification process.

The country has been negatively affected by externalisation of money for a long time.
In August last year, police hunted down three Bulawayo businesspeople on allegations of externalising over $7,3 million to Botswana.

The three were identified as Delny Deanna Ashley (41), Farid Shahadat (45) and Ryan Gregory Joseph (29).

They were wanted for contravening Section 8(1) paragraph (b) of the Money Laundering and Proceeds of Crime Act, Chapter 9:24.

During the period between January 14, 2017 to April 7, 2017, the suspect, Delny Deanna Ashley Davies, in her own personal capacity and through other couriers who are all Zimbabwean passport holders, crossed into Botswana with large amounts of cash and deposited a total of $5 819 106, R500 100, EUR39 500 into her three foreign accounts, namely Stanbic Bank (South African rand) account number 9060001687994, Stanbic Bank (Euro) account number 9060002320067 and Stanbic Bank (United States dollar) account number 9060001680000 and 9060002620435 without the approval of the Reserve Bank of Zimbabwe.

Police said during the period between February 23 and April 11 last year, Shahadat, who was the director of a gold mining and milling company, Yakuts Marketing (Pvt) Ltd in Bulawayo, with the help of other couriers, crossed into Botswana with large amounts of money.

They deposited a total of $1 197 080 into his three foreign bank accounts — Stanbic Bank account number 906 000 257 2465, Stanbic Bank (906 000 257 2504) and Capital Bank (000 370 300 8498) — without the approval of the Reserve Bank of Zimbabwe.

On April 12 and 13 2017, Ryan Gregory Joseph deposited a total of $331 700 into his personal foreign Stanbic Bank Account number 906 000 162 9595 in Botswana without the approval of the Reserve Bank of Zimbabwe.

The three suspects externalised a total amount of $7 347 886.
President Emmerson Mnangagwa last year gave an ultimatum to those who externalised funds and assets to repatriate them within three months.

The ultimatum expired in February and a list of those who ignored the order to return the funds and assets was published.

President Mnangagwa last week said at least $850 million of the looted $1,4 billion had been returned to the country.

Pres. Lungu Receives Controversial FIC Report

Chris Phiri | June 19, 2018

President Edgar Lungu has made steps to resolve the standoff between State House and the Financial Intelligence Centre (FIC) by meeting the Director General Mary Tshuma.

Tshuma handed over the reported that has raised so much dust over the allegations against some top-ranking government officials.

Below is a statement issued by State House Press Aide Amos Chanda:

PRESIDENT LUNGU MEETS FIC BOSS, ASSURES AUTONOMY FOR LAW ENFORCEMENT AGENCIES

LUSAKA (TUESDAY, 19TH JUNE, 2018)­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­ – His Excellency Mr Edgar Chagwa Lungu, President of the Republic of Zambia has today received the Financial Intelligence Centre (FIC) ‘2017 Trends Report on Money Laundering/ Terrorist Financing’ and assured all law enforcement agencies of his full support for the operational autonomy required to attain the highest possible integrity in criminal investigations.

FIC Director-General Mrs Mary Tshuma requested an appointment with the President last evening, Monday 18th June 2018, and was granted audience today, Tuesday, 19th June 2018 at 11:00 hours at State House where she officially presented the report to the Head of State. The President has assured all investigative and law enforcement agencies of his unwavering commitment to the protection of their operational autonomy to ensure that there is full integrity in the investigative processes at every stage. The Head of State has noted that since the report does not mention names of suspects and claims against any individuals and body corporates, he would leave it to law enforcement agencies to investigate any allegations that may arise from the trends report.

The President’s perusal of the report shows that it brings out trends in financial transactions and alleged malpractices in a general nature. He therefore expects that the FIC will collaborate with relevant law enforcement agencies tasked with specific responsibilities that touch on the issues raised in the report.

For instance, the President notes the suspected offences of tax evasion must be presented to the Zambia Revenue Authority; suspected fraud to the Zambia Police Service; suspected corruption to the Anti-Corruption Commission; suspected money Laundering to the Drug Enforcement Commission and immigration irregularities to the Department of Immigration. Once these agencies have fully investigated these trends and suspicious transactions, they would decide to prosecute or make necessary recommendations to relevant authorities.

The President emphasizes that it is unfair for some NGOs and opposition parties to pressure him to take action on general allegations that have no names and no direct and proven cases. In any case, some of the previous reports the FIC presented to the President contained allegations against private citizens and companies who are not directly amenable to his authority. The President does not therefore understand what sort of action he can direct against private entities mentioned in suspicious transactions reports.

It is never the responsibility of the Head of State to micro manage criminal investigations against anyone, save for cases where administrative action is required to pave way for smooth investigations in situations where it judged that office bearers would hinder such processes.

State House also takes this opportunity to confirm that representatives of civil society organizations on Friday, 15th June 2018, at 14:55 PM, presented the FIC report to State House ahead of today’s presentation from the FIC director general. The report was accompanied by two identical letters, one signed by NGOCC Chairperson Sarah Longwe and another by Actionaid country director Nalucha Nganga Ziba.

Issued by:

AMOS CHANDA
SPECIAL ASSISTANT TO THE PRESIDENT
(PRESS AND PUBLIC RELATIONS)
STATE HOUSE

State hunts Gupta assets... in Dubai

05 June 2018 - 06:00 By Karyn Maughan

Just days after the Guptas won a major legal battle against the state in the Estina Dairy Project case‚ the National Prosecuting Authority has confirmed that it has won a court order to go after R169-million linked to the alleged scam – in Dubai.

The NPA’s Luvuyo Mfaku told TimesLIVE that curator Eugene Nel was appointed to trace this money‚ which was allegedly paid by Estina to a company called Gateway Limited. The state successfully applied for this money to be frozen on the basis that it is the “proceeds of unlawful activities”.

“The curator has confirmed that Gateway is‚ in fact‚ a shelf company‚” Mfaku said. “So, the next step is for him to be appropriately recognised by the Dubai authorities‚ so that he can trace where the money was moved and potentially seize assets in a bid to recover it.

“That process is currently underway.”

While investigative unit amaBhugane has described Gateway as “little more than a Gupta front” that is administered by a “Gupta subordinate” ‚ the family has denied any links to the company. Gateway is registered in Ras al-Khaima‚ one of seven emirates making up the United Arab Emirates and a highly secretive offshore company jurisdiction. This means the NPA may face difficulty in accessing information about where the R169-million may have flowed.

The NPA has described the Estina Dairy Project‚ which was set up for the alleged benefit of poor black farmers‚ as a massive scam – where money which should have been spent on empowerment was instead “siphoned out of Estina to several related entities and individuals in circumstances where there was no lawful reason for the funds to be transferred to such entities and individuals”.

Investigators further claim that Kamal Vasram‚ Estina’s sole director‚ had no experience in agriculture and previously worked for Gupta-owned Sahara Computers as a “retail sales manager”.

Suspicions about the Guptas’ involvement in the Estina scam were fuelled by the so-called Gupta Leaks emails‚ which reportedly included spreadsheets showing a total of $8.35-million (about R84-million) landing in Gateway’s account in August and September 2013.

Despite this‚ the state has been hit with two devastating losses in its fight to freeze Gupta assets it claims are the proceeds of the Estina crimes‚ or at least the benefits of those crimes.

Bloemfontein High Court Judge Phillip Loubser found that there was currently not a reasonable basis to believe that Gupta family members‚ associates and businesses would be convicted on money-laundering and fraud linked to the project. And‚ as such‚ there was not a reasonable basis for R250-million in the family’s assets to be frozen pending potential conviction and subsequent confiscation.

This is a second‚ devastating blow for the state in its Estina prosecution. Earlier this year‚ its first successful attempt to freeze R220-million in assets linked to the Estina project as the proceeds of crime‚ or the instrumentality of an offense‚ was reversed by High Court Judge Fouche Jordaan.

Key to that ruling was an affidavit filed by the Bank of Baroda‚ in which it argued that the AFU had mistakenly used its Nedbank pool account – which served 750 clients – to argue that Estina had made payments directly to Atul Gupta‚ and other Gupta entities.

During that successful challenge‚ Gupta advocate Mike Hellens described the state as “recklessly incompetent”.

The NPA remains adamant that it will successfully prosecute those implicated in the Estina case‚ and insists that it has the evidence to prove its case. It is currently deciding on whether to appeal Loubser’s ruling.

Read More: https://www.timeslive.co.za/news/south-africa/2018-06-05-state-hunts-gupta-assets-in-dubai/