A British peer has demanded UK regulators probe South Africa's powerful Gupta business family for “possible criminal complicity” in money laundering, stating that internal warnings on large cash transfers out of SA by the family were not heeded by HSBC. Former Labour cabinet minister Peter Hain informed the House of Lords last week that he had asked the UK Treasury to seek a probe into allegations against an unknown British bank for illicit transfers of funds on behalf of the Guptas. The former anti-apartheid campaigner said, “Money laundering is taking place. Billions of rand is being stolen out of the country and often recycled back.”
Citing the scandal that broke all hell loose, where money meant for an empowerment farming project diverted to pay for a lavish Gupta wedding, Hain said, “The Vrede dairy farm corruption scandal was a classic case of the laundering, and poor black farmers were robbed from grants from government.” He said that the illegal transactions between the Gupta family's South African bank accounts and the British bank were at some point flagged as suspicious. Hain also said the bank headquarters ordered that this be ignored. The 67 year old has requested that the evidence he has be handed to the serious fraud and the national crime agency.
The latest allegations should be one of the major sources of worries for South African President Jacob Zuma. Hain is known for his persistent campaign to internationalise fight against apartheid, and other actions like leading calls for a boycott of the South African rugby and cricket teams. Zuma's relentless exploitation of the post-apartheid state of its credibility has always pinched those who were raised in the country and are a part of its history. Such international South African activists have more or less made it their business to internationalise the anti-corruption agenda.
The Gupta business empire and its chumminess with the Zuma administration has stripped South African government of its integrity, and what was once just a slew of allegations of systemic political corruption, has now evolved into a full investigation, in the state and abroad. The Guptas' laundry list of crimes include treason, extortion, fraud, racketeering, money laundering, and collusion. Now with Lord Hain on the scandal's tail, things have inadvertently heated up.
Hain also pointed at UK's Standard Chartered for holding accounts for the Indian businessmen. The banks however said it flagged its Gupta accounts to regulators in 2013, closing them down the next year. He said that some banks do not learn from their mistakes. Both, HSBC and Standard Chartered have made many efforts to clean up their acts, however, there are now questions as to whether HSBC went far enough. While sources in the bank claimed they did not know of the Gupta accounts, one questions the validity of international banks like HSBC not being aware of their clients and their money.
DA to report Guptas to the RBI
South Africa's Democratic Alliance has stated that it plans to write to the Governor of the Reserve Bank of India, Urjit Patel to report the Guptas' accounts with the Bank of Baroda. The letter comes in terms of Section 36, that states the RBI has power to “caution or prohibit banking companies or any banking company in particular against entering into any particular transaction.” DA spokesperson Natasha Mazzone said recent evidence produced at Parliament's Inquiry, findings in the Public Protector's 'State of Capture' Report, and the Bank of Baroda's own attempts to close the family's accounts, is more than enough reason for the RBI to prohibit further transactions between BoB and the Guptas.
“The DA is of the belief that the Gupta family could be using their accounts with the Bank of Baroda to funnel South African public money out of the country. The Guptas are at the centre of State Capture and have allegedly used their close ties to President Jacob Zuma to raid our state coffers for their own personal financial benefit. The DA will, therefore, request that the Reserve Bank of India urgently prohibit the Bank of Baroda from entering into any further transactions with the Guptas, as the money the Gupta family is transferring into their Bank of Baroda accounts was possibly obtained through illegal means,” Mazzone said.
