Controversy has surrounded the relationship between President Jacob Zuma and the Gupta family since the “Guptagate” scandal in 2013, when it was alleged that the president had allowed the landing of a jet chartered by the Gupta family at Waterkloof Air Force Base.
A business family originating from the North Indian state of Uttar Pradesh, the Gupta family came to South Africa in 1993 on the eve of the first democratic elections and established the computer company Sahara Computers. Over the years the Gupta family have greatly expanded their business interests, which now include the mining, energy, technology, air travel, and media sectors.
On 14 March former ANC MP Vytjie Mentor said in a Facebook post that the Gupta family, in their Saxonwold home, had offered her the post of Minister of Public Enterprises in 2010, days before former minister Barbara Hogan was removed from the position. According to Mentor, the president was in the next room while she was being offered the ministerial position. Mentor added that the Gupta family offered her the position and sought the cancellation of the SAA flight route to India in return. Mentor put forward a number of other allegations, saying that she spoke up because she was afraid of state capture and that the Gupta family had influence in key government departments, particularly the treasury. She called for top ANC members to come forward and expose the abuse of state resources.
Following the allegations, the Presidency promptly released a statement in which they said that the president had “no recollection” of Mentor, who claims to have known the president since his return from exile.
Following Mentor’s allegations, Mcebisi Jonas, the Deputy Finance Minister, released a statement on 16 March saying: “Members of the Gupta family offered me the position of Minister of Finance to replace then Minister Nhlanhla Nene. I rejected this out of hand. The basis of my rejection of their offer is that it makes a mockery of our hard earned democracy [and] the trust of our people, and no one apart from the president of the Republic appoints ministers.”
The president responded to the allegations on 17 March during a Q&A session in Parliament and said, “I’m in charge of government – I appoint in terms of the Constitution.
There is no minister who is here that was ever appointed by the Guptas or by anybody else. Ministers who are here were appointed by me.” On 18 March the allegations continued as former Eskom chairman Zola Tsotsi told the Mail and Guardian that the Gupta’s said “he was not playing the game,” and that he was removed from his post through their influence. This is not the first time this year that Zuma’s relationship with the business family has been under the spotlight.
During the 2016 State of the Nation Address, the EFF interrupted the president’s address and coined the term “Zupta” in reference to the alleged corrupt relationship. They subsequently left the chamber without incident. The EFF has since released a house music track which includes lyrics such as “Zupta must fall”, while social media had hashtags such as #ZuptaMustFall trending around the country.
The ANC National Executive Committee meeting, held from 18-20 March, brought the current allegations to a head. The ANC reaffirmed their support for the president during a media briefing after the meeting. eNCA reported that ANC Secretary-General Gwede Mantashe said that the party was behind the president and that they had held “robust discussions” regarding the allegations. Mantashe also criticised the media for suggesting that there was a division in the ANC. During the media briefing, the ANC also affirmed their support for Finance Minister Pravin Gordhan. Mantashe said that the suggestion of the president stepping down was not discussed during the meeting.
Opinions on the allegations of state capture vary. John Kane-Berman, a policy fellow of the South African Institute of Race Relations, said in an opinion piece on PoliticsWeb.co.za titled “‘State capture’ didn’t begin with Guptas” that “state capture is the official policy of the ruling alliance of the African National Congress (ANC) and the South African Communist Party (SACP). So routine has it become that it is barely noticed unless something unusually dramatic involving the Guptas happens.” He added, “What distinguishes South Africa is the sheer brazen barefaced shamelessness of it all. And the reason is simple. The deployment of party cadres to capture as many centres of power as possible is one of the hallmarks of ANC/ SACP rule and ideology.”
In an opinion article published by the Rand Daily Mail titled “Of course the ANC wants to capture the state. It’s what political parties do”, ANC member and political activist Dr Phillip Dexter argued that it is an objective of political parties to capture the state, saying, “Starting at the beginning, ‘capturing’ or winning control of the state is the primary objective of any genuine political movement, whether it is the radical democratic ANC or the liberal democratic DA.” He also discussed the influence of the private sector on the state, saying, “The issue at hand in this important debate our country is involved in is not the issue of political parties having control of government and its institutions. It is about the effect of capital, private wealth, on the state and on the government.”
EFF deputy president Floyd Shivambu discussed the media’s approach to state capture allegations in an opinion article titled “State Capture: It’s criminal, and it is nothing new” published by Daily Maverick. He lambasted the South African media for what he called a “lack of sophistication”, saying, “There are of course many Gupta captures and influences on many aspects of the state, but South African media’s lack of sophistication and utterly sluggish investigative capacity keep what are reachable secrets as secrets.” He also discussed the economic systems adopted after apartheid, saying, “Towards the end of apartheid, various capitalist interests and factions were largely united on the replacement of apartheid with a system that will guarantee continued capitalist exploitation.” He also discussed the current allegations, saying, “What South Africa is currently experiencing under Jacob Zuma is a form of criminal state capture by a family that is in business with Zuma.” He alleged that the extent of the state capture by the Guptas was much wider than currently thought, saying, “The extent of the Guptas’ state capture is far deeper and wider than has been reported in the less inspiring newspapers of South Africa. The Guptas control many government departments, provinces, and state-owned companies in a manner that far exceeds any of the capitalist control in South Africa.”
In the wake of allegations that the Gupta family holds influence over the president, financial institutions have distanced themselves from Gupta-owned companies, with First National Bank closing the accounts of Oakbay Investments, a Gupta-owned investment company. Three months earlier Barclays Africa closed the company’s bank accounts as well. Auditing firm KPMG and investment company Sasfin also cut ties with the Gupta-owned business, who released a note to the JSE on 5 April stating, “The reason for KPMG’s resignation is solely based on their assessed association risk, and KPMG have indicated that there is no audit reason for their resignation, whereas the termination of Sasfin’s services follows a recent decision by Sasfin to align the strategic objectives of Sasfin’s Corporate Finance Division more closely with that of the broader Sasfin group.”
The allegations of state capture added to the Rand’s downward spiral since the sudden firing of former Minister of Finance Nhlanhla Nene in December last year. After Nene was axed, the Rand/Dollar exchange rate broke through the R15 mark. After Deputy Minister of Finance Mcebisi Jonas came forward with allegations of having been offered the job of Nene, the Rand fell even further, moving past the R16 mark. However, after the Constitutional Court ruling on 31 March that found that the president had acted unconstitutionally when disregarding the Public Protector’s report about his Nkandla homestead, the Rand strengthened in relation to the dollar and traded at under R15 on the day after the judgement was delivered.
On Sunday, 10 April, newspapers reported that the Gupta family spokesperson had announced that the entire Gupta family are now in the process of leaving the country for Dubai.
Illustration: Asiphe Dlulane