The Gupta family has slammed Eskom and the Special Investigating Unit’s (SIU) bid to sue them for R3.8bn, which the power utility says was illegally diverted to help them buy Optimum Coal, as a “national embarrassment waiting to happen”.
“The allegations pleaded in this summons are legally incomprehensible and [it] is undoubtedly one of the worst drafted legal documents that I have ever seen,” Gupta family lawyer Rudi Krause told Business Day.
The family’s alleged influence over vital state institutions during the Jacob Zuma presidency is at the centre of the state capture saga, and the subject of the Zondo commission of inquiry. Zuma is accused of ceding much of his power, including that of firing and hiring ministers and influencing government policies, to them.
Krause said the civil suit launched against Rajesh, Atul and Ajay Gupta, their associate Salim Essa, former mineral resources minister Mosebenzi Zwane and a host of former Eskom executives, including Brian Molefe, Matshela Koko and Anoj Singh, was “unlikely to ever see the inside of a courtroom”.
While Eskom and the SIU have described the Dubai-based Gupta brothers and Essa as “fugitives from justice”, Krause said this was “opportunistic, factually inaccurate and improper”.
“There are no warrants for their arrest. There are no pending criminal cases against them. It’s completely untrue to say they are fugitives.”
In 2018 state capture inquiry chair deputy chief justice Raymond Zondo denied the Guptas leave to cross examine witnesses, saying they had no valid reason not to appear before the commission. He also denied their request for the commission to travel abroad to hear their testimony and their request to testify via video link, saying that if they did not return to SA to testify, it was because they had chosen to turn their backs on the country.
In October 2019 the US government sanctioned the family, saying they “leveraged its political connections to engage in widespread corruption and bribery, capture government contracts, and misappropriate state assets”.
Krause says the Guptas, who have so far defeated every single attempt by the National Prosecuting Authority (NPA) and Asset Forfeiture Unit (AFU) to freeze their assets and prosecute them in relation to the so-called Estina dairy project “scam” — will fiercely oppose Eskom and the SIU’s legal action against them.
Investigative directorate head Hermione Cronje has repeatedly stated that the NPA intends to reinstitute the aborted Estina prosecution, which was provisionally withdrawn because of the state’s difficulties in accessing crucial financial information from the UAE. She maintains that the state is almost ready to issue a new indictment in the case, which she says involves several accused based overseas.
As yet, though, the case remains dormant.
The SIU and Eskom’s recently launched legal action seeks to recover R3.8bn they contend was “illegally diverted” from the parastatal to support the purchase of Glencore’s Optimum Coal Holdings (OCH) by the Gupta-linked Tegeta in 2016.
They claim Eskom’s leadership effectively forced Glencore to sell Optimum, which was then bought by Tegeta in a deal allegedly facilitated by Zwane and largely financed by Eskom.
According to Eskom and the SIU: “All of the former executives and board members breached their fiduciary duty of care and good faith to Eskom, and acted in a concerted state capture effort with the Gupta brothers, Mosebenzi Zwane and Salim Aziz Essa to illegally divert funds from Eskom”.
But Krause says the summons issued against the Guptas and their associates had completely failed to make out a case against them.
“It is unlikely, if not impossible, that a court will issue judgment against them based on this summons,” he said.
Krause says the summons itself was legally defective, because it had been signed by an attorney who claimed to be acting in terms of an act that was repealed on November 1 2018.
Krause says the case reinforced the family’s oft-expressed belief that they had been unfairly vilified as the agents of state capture and were being “politically targeted” for prosecution.
He has also confirmed that Zuma’s son Duduzane — who is in business with the family — intends to sue the state for “malicious prosecution” in relation to its ill-fated attempt to prosecute him for the attempted corruption of former deputy finance minister Mcebisi Jonas.
Zuma junior is not among the group that Eskom and the SIU are now suing.
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