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The barren Sahara: A lesson in money laundering

Sep 05 2019 17:10
Susan Comrie

The Guptas' Sahara Computers in Midrand, Johannesburg, has quietly closed down. The premises are up for rent or for sale (. (Pieter-Louis Myburgh, News24)

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Guptas ‘tried to use front’ to extract Sahara assets

 

Sahara Computers was always the Guptas' flagship company – the one the family cited to show they ran a legitimate business, not dependent on their political connections.

Except, of course, it was neither of those things.

Court papers recently filed by the Transnet Second Defined Benefit Fund (TSDBF) include documents showing that more than 98% of Sahara's profits for the month of June 2015 came from a series of illicit payments, extracted from Transnet.

The payments – totaling R122m exactly – came from Albatime, a now defunct company that made its fortune by introducing Salim Essa, the Guptas' business partner, to Regiments Capital, a financial services firm at the center of state capture allegations. (Read amaBhungane's Trojan horse investigation here.)

The payments were made under the guise of a bogus IT contract which promised Albatime – a one-man show based in a tiny Rivonia office – basic computer support services for two years at a cost of R122m.

But a spreadsheet, sourced from the #GuptaLeaks and included in TSDBF's court papers, shows that Sahara recorded the costs of the contract at just R167 – leading to an astonishing profit of R121 999 833.

The bogus contract dwarfs any other business Sahara conducted that month. The second largest amount came from the Gupta-owned Annex Distribution (R20.9m, but loss-making) and Edcon (R12.5m), followed by a number of smaller payments of less than R3m from Russells, Morkels, Joshua Doore and OK Furniture.

But none achieved the near-100% profit margin of the Albatime contract, and several were recorded as loss-making.

Altogether, Sahara recorded R187.85m in turnover that month, of which R123.46m was profit. Put differently, without the R122m Transnet money laundered to it via Albatime, Sahara was hardly a profitable business at all.

An earlier amaBhungane investigation identified Transnet as the likely source of the payment.

On 3 June 2015, Regiments issued an invoice to Transnet for R166m, ostensibly for helping Transnet to secure funding from China Development Bank (CDB).

Regiments did not deserve the fees.

Unfavourable terms

Transnset former treasurer Mathane Makgato told the Zondo Commission how she had been pressured to accept the CDB loan, even though the terms were unfavourable.

She told the commission that Regiments was inserted as an unnecessary advisor despite the fact that Transnet treasury was more than capable of raising the funding.

After Makgato resigned, her replacement, Phetolo Ramosebudi, signed off on the loan as well as Regiments' fee.

Documents leaked to amaBhungane showed that Ramosebudi had been receiving unexplained payments from Regiments for years.

But the R166m was not Regiments' alone to keep.

Instead, soon after Transnet paid Regiments R166m, Regiments received an invoice from Albatime – the one-man company in Rivonia – for R124.5m.

The original Albatime invoice described the services as "CDB" but it was later replaced by a duplicated invoice that described the services as "IT sales and support".

"Albatime has never been engaged in any IT Sales or Support activities. This invoice was an out and out fraud designed to provide cover for a laundering arrangement with the Gupta family IT company Sahara Computers," Piet Maritz, the principal officer of the Transnet pension fund, told the Johannesburg high court in an affidavit filed on Monday.

The fund highlighted this payment in its papers to demonstrate that Regiments director Eric Wood had been involved in a scheme to help Essa and the Guptas extract and launder alleged kickbacks from state-owned entities.

For more on this case – including how R349m was "stolen" from pensioners in just four days – visit www.amabhungane.org.

albatime  |  money laundering  |  guptas  |  sahara computers
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