News / Opinion / Columns

Martin Czernowalow
3 minute read
24 Aug 2017
5:35 am

More Gupta chicanery…

Martin Czernowalow

Straight-thinking South Africans are not taking the latest 'deals' at face value.

Ajay and Atul Gupta. File photo

The Guptas are disinvesting from South Africa, or at least it would seem so on the face of it. However, as with everything concerning this controversial family – especially when it comes to matters of money and politics – one can safely bet that what is out in the open is most likely just smoke and mirrors, while a deeper, darker truth lurks beneath.

Therefore, it is perhaps no surprise that the announcement of the sale of two key Gupta interests in South Africa has raised eyebrows and few, if any, straight-thinking South Africans are taking these deals at face value.

Yesterday, Gupta-owned Oakbay Investments announced it had sold Tegeta Exploration and Resources to a Swiss outfit called Charles King for R2.97 billion. And this already raises several questions: For starters, Charles King seems to be a mysterious operation, registered in 2011 and based in Lausanne, Switzerland.

What’s really strange about this is that the company’s main line of business is the creation, manufacture and distribution of fashion products, and it is understood that in the past the company did this under the fashion brand, Charles King Paris. Why a manufacturer and distributor of fashion goods would suddenly want to try its hand at mining in Africa is not immediately obvious.

However, should Charles King’s owner, Amin Al Zarooni – as quoted in the Oakbay statement – be believed, it’s simple: “Opportunities in mining in South Africa are extremely attractive and we have been looking for a long time to invest in the Rainbow Nation.”

I don’t believe him. It’s never that simple. And then there is the small matter of numbers, which do not seem to make sense from either side of the equation. According to some media reports, the R2.97 billion price tag for Tegeta would have been a massive stretch for Charles King, which in 2001 had a market capitalisation of R1.36 million.

And it has been said the R2.97 billion would have been a bit lean from Tegeta’s perspective, considering the company forked out R2.15 billion in 2015 just for the Optimum coal mine, which is but one part of its business.

So, things are clearly not as they seem. Should the Guptas be believed – yes, I know, right! – this deal is a selfless act to save jobs and make the world a better place.

“The sale is part of Oakbay’s commitment to preserve jobs, provide certainty to over 7 500 hard-working employees throughout the group and to safeguard the inherent value of the businesses in which they work. Under new ownership, Oakbay believes the business and its employees will have the bright and prosperous future they deserve.”

Nice touch. Though that might as well have been written by Bell Pottinger. But Tegeta was not the only fishy deal coming out of the Gupta stable this week.

On Monday, President Jacob Zuma’s bosses announced they are selling their shares in The New Age newspaper and the ANN7 TV channel to Mzwanele Manyi’s company, Lodidox‚ for R450 million.

This isn’t as straightforward as it would seem, either. The deal was concluded under a vendor financing agreement, which means the Guptas are funding Manyi so he can buy their media operation.

Or, in short, the Guptas are buying their own operation. Weird, but true. Anyway, (some) details of these Gupta dealings are likely to emerge eventually. Watch this space.

Citizen news editor Martin Czernowalow

Citizen news editor Martin Czernowalow