The Gupta’s Transnet Laundromat (Part One): Tracing the money from Liebherr Cranes

(Graphic: polygram.co.za)

By Shadow World Investigations

30 Sep 2020

In August, Shadow World Investigations (SWI) made a detailed submission to the Zondo Commission, tracing and explaining the details of the money laundering vehicles used by the Gupta enterprise in stealing and hiding vast kickbacks from Transnet contracts. SWI is now making the submission public. In the first of three articles picking out the highlights of the submission, SWI traces what the Guptas did with over $3-million paid to a Gupta front company by the Irish subsidiary of the Swiss mega-conglomerate, Liebherr, related to Transnet crane contracts.

In July 2017, amaBhungane and Daily Maverick’s Scorpio reported on how two major multinational crane companies – the Chinese company Shanghai Zhenhua Heavy Industries Limited and Swiss firm Liebherr Cranes – had made multi-million dollar payments into accounts controlled by the Gupta family.

https://www.dailymaverick.co.za/article/2017-07-17-amabhungane-scorpio-guptaleaks-more-multinationals-ensnared-in-transnet-kickback-web/

In its latest submission to the Zondo Commission, Shadow World Investigations picks up the story of Liebherr Crane contracts and traces where the money paid in by Liebherr eventually landed. This exercise shows that payments from Liebherr Cranes were used to partially finance some of the most infamous Gupta scandals, including paying for entertainment at the notorious Sun City wedding and buying decrepit agricultural equipment to be used by Estina on the Vrede dairy farm.

The contract and the #Guptaleaks

On 4 December 2011, Transnet advertised three separate Requests for Proposals (RFP) related to the expansion of the Ngqura container terminal, a deepwater port about 20km northeast of Port Elizabeth. The first RFP called for proposals to supply 18 single-lift rubber tyre gantry cranes, with an option to buy 10 more. The second RFP called for proposals to supply four twin lift ship-to-shore cranes, again with an option to supply an additional three to Nqura and two to another port. The third RFP called for proposals that would satisfy the first two RFPs as part of a joint contract.

On 17 February 2014, Liebherr, a major Swiss multinational, announced that it had hit the jackpot, winning the bid to supply all of Transnet’s crane needs at Ngqura. Liebherr was contracted by Transnet Port Terminals to supply 18 single-lift cranes and four twin lift ship-to-shore cranes.

To date, no evidence has emerged that the contracts were awarded in an irregular manner. However, the #Guptaleaks include one disturbing revelation. The leaks show that on 21 December 2011, Ashu Chawla, one of the Gupta’s chief lieutenants and CEO of Sahara Computers, sent an email to Piyoosh Goyal. As amaBhungane has reported elsewhere, Goyal controlled the Worlds Window Group network of companies, through which the Guptas arranged to launder vast amounts of money stemming from other Transnet contracts.

The email sent by Chawla to Goyal was sent with the subject: “Update on Tender iCLM HQ 0829_RTG_&_STS Cranes Nqura.” This was a reference to the specific number given to the tender by Transnet. Attached to the email was a Word document with the same name: a memorandum written by Transnet’s executive manager of capital procurement (Denzil Pillay) to the chief executive of Transnet Port Terminals (Karl Socikwa). The memorandum provided a detailed timeline of the various steps that Transnet would take in assessing and awarding the contract.

That Ashu Chawla had this document, and was sending it on to a criminal conspirator, is extremely concerning. It is not clear how Chawla came to be in possession of the document, but it strongly suggests that the Gupta family and their associates had access to internal Transnet communications and documents regarding a tender for which they would eventually be paid millions of dollars in success fees.

Payments from Liebherr Cranes

Accounting records from the #Guptaleaks show that Liebherr paid $3,232,430.88 to a Gupta front company based in the UAE, called Accurate Investments. Accurate Investments’ lone director was Sanjay Grover, an Indian national who acted as a frontman and administrator in the UAE for the Guptas. This amount was transferred in five payment tranches between 22 July 2013 and 1 December 2014. It is possible that additional payments were made, although the #Guptaleaks accounting records only run until the end of 2014.

Payment 1: All the Gupta scandals you can handle

The first payment recorded in the #Guptaleaks was made by Liebherr Cranes to Accurate Investments on 22 July 2013 and was valued at $905,000.88. This amount was immediately split into three and paid into the Standard Chartered Bank account of another Gupta UAE company, Global Corporation.

This money eventually wended its way to four different beneficiaries. First, on 22 July 2013, $499,500 was transferred directly from Global’s Standard Chartered Bank account to the Gupta’s South African group hub, Sahara Computers.

Second, a day later, after passing through a different account controlled by Global Corporation, AED625,000 (equivalent to approximately $170,000) was withdrawn in cash and given to one “Vikas”. #Guptaleaks records show that this was almost certainly Vikas Chaturvedhi, an employee of the Guptas based in India and responsible for travel logistics and other errands.

Third, two days later, on 24 July 2013, the Guptas transferred $93,378.61 to Star Engineering. Star Engineering is an India-based agricultural machinery firm. #Guptaleaks records show that the Guptas purchased dairy processing equipment from Star Engineering to be used by Estina’s dairy farm in the Free State. Testimony before the Zondo Commission suggests the equipment that was purchased was worn and dilapidated. One farmer questioned at the Zondo Commission vividly recalled that the equipment was covered in rust that fell like fish scales when disturbed.

Finally, and also on 24 July 2013, after pushing through other Gupta accounts and a brief conversion into cash, AED575,620 (equivalent to approximately $156,000 the time) was paid to Wizcraft. Records from the #Guptaleaks show that Wizcraft was an entertainment company that had been contracted by the Guptas to supply musical entertainment at the Sun City wedding of Aakash Jahajgarhia and Vega Gupta.

(Graphic: polygram.co.za)

Payment 2: Another SA payment

Liebherr Cranes made its second payment to Accurate Investments on 17 February 2014 which was worth $212,006.01. Unlike the previous payment, this was made into Accurate’s account held at another bank in the UAE, Mashreq Bank. This payment was made on the same day it was publicly announced that Liebherr had been awarded the contract by Transnet.

Liebherr’s payment commingled shortly thereafter with another payment sourced from the Gupta empire worth $450,000. On the same day this payment was made, the full commingled amount – $599,327.58 – was paid from Accurate’s Mashreq Bank account into the State Bank of India account held by the Gupta’s South African company, Linkway Trading (another company that was linked to the laundering of funds related to the Vrede dairy project).

(Graphic: polygram.co.za)

Payment 3: Oakbay’s windfall

The third payment made by Liebherr Cranes was on 15 April 2014. Worth $371,105.83, it was made into the same Mashreq Bank account controlled by Accurate Investments that had received the previous payment. Here, it commingled with an existing balance of just over $6,000.

Just under two weeks later, on 28 April 2014, $375,000 was transferred from Accurate into the Mashreq Bank account of yet another Gupta Dubai shell, Fidelity Enterprises, where it joined existing funds to increase the account’s balance to $425,967.12.

The #Guptaleaks records show that on the following day, 29 January 2014, an amount of $400,000, of which the majority was drawn from the payment originally made by Liebherr, was transferred from Fidelity to an entry recorded simply as “Oakbay”. This was most likely a payment into the Gupta’s flagship company in South Africa.

(Graphic: polygram.co.za)

Payment 4: Gupta relations in the US

The fourth payment tranche involved three separate payments, all made into Accurate Investment’s Masheq Bank account: $405,598.52 on 7 May 2014, $402,879.34 on 9 May 2014 and $296,890.30 on 26 May 2014. The total value of the three payments was equal to $1,105,368.16.

These three payments mingled with other payments made to the Gupta criminal network – including payments from other questionable Transnet contracts – to finance a single payment of $5-million to Brookfield Consultants, a company registered in Texas.

Reporting by amaBhungane has revealed that relatives of the Guptas, Ashish and Amol Gupta, signed tax documents on behalf of Brookfield Consultants. The #Guptaleaks show that Tony Gupta and Ashu Chawla were sent Brookfield’s bank details at Chase Manhattan on 5 May 2014 by Ramesh Gupta. Ramesh is the father of Ashish and Amol Gupta.

An email chain in the #Guptaleaks, dated two days before the transfer was made, shows that a key Gupta lieutenant, Suresh Tuteja, had written a draft letter to be signed by Ashish Gupta: a letter of demand from Ashish to Accurate Investments stating that Accurate Investments owed Brookfield $5-million in terms of an agreement dated 14 May 2014.

Ashish Gupta duly signed the letter, which Tuteja then forwarded to Sanjay Grover (the sole director of Accurate) and Ronica Ragavan, another key Gupta lieutenant. The letter was intended to be presented to Mashreq Bank in support of the outward transfer to Brookfield.

(Graphic: polygram.co.za)

Payment 5: The lights go dark

The final payments revealed by the #Guptaleaks were valued at $638,950 and were made in two payments of $386,110 (on 10 October 2014) and $270,840 (on 1 December 2014). The deposits replenished Accurate’s Mashreq account, which held a balance of just $7,619.94 prior to the deposits.

The #Guptaleaks records, sadly, do not extend beyond the end of December 2014, making it impossible to trace the eventual end point of the funds. What is known, however, is that at least a portion of these funds was transferred to other Gupta shell companies in Dubai, from where they were presumably dissipated outwards.

The dissipation of the funds that we are able to identify happened in two streams. First, on 9 and 10 December 2014, two amounts of $20,000 were transferred from Accurate Investment’s account into an account of Fidelity Enterprises, also held at Mashreq Bank. Second, also on 10 December 2014, $200,000 was transferred to Global Corporation’s account at the Bank of Baroda in Dubai. The following day, $243,000, drawing in part on the Liebherr cash, was transferred to Fidelity Enterprise’s account at the Bank of Baroda.

And there, unfortunately, the trail goes dark.

(Graphic: polygram.co.za)

Time for Liebherr to answer some tough questions

When the story of Liebherr’s payments to the Guptas was first published by amaBhungane and Scorpio in July 2017, Liebherr Crane’s head office responded with the seriousness one would expect. Liebherr stated that it took the allegations “very seriously” and committed to “fully investigate” the matter internally.

In October 2017, three months later, Liebherr Cranes issued a detailed statement, which appears to have flown under the radar in South Africa. In the statement, Liebherr confirmed that it had entered into a contract with Accurate Investments, wherein Accurate acted as the “sales agent” for Liebherr’s Irish subsidiary, Liebherr Cranes Ltd. It also confirmed that the payments were made to Accurate by Liebherr’s Irish subsidiary.

However, upon completing their internal investigation, Liebherr concluded that the contract was “legally sound”. Moreover, it argued that “the selection of sales agents such as Accurate Investments Ltd to provide interface services to the end-user during the tender, procurement and supply process, is a practice which is common in the sales process for capital goods.”

While Liebherr admitted that compliance checks could have been implemented “in a more stringent manner”, it stated that the background checks it had performed into Accurate “did not indicate any malpractice on the part of Accurate Investments Ltd”.

This statement, however, still begs some key questions. For one, the statement makes no attempt to explain what precise services Accurate Investments performed in South Africa. It also provides no indication as to what services Accurate could have performed in South Africa, considering that it was a company registered in Dubai, with an Indian national as the sole director, with zero links to South Africa, no online presence and no public relationship with Transnet.

The #Guptaleaks, moreover, reveal the two keys facts about the true nature of Accurate Investments: First, Accurate was, at all times, beneficially controlled by the Gupta family and formed part of a clutch of companies the family controlled in Dubai and used for the purposes of laundering illicit funds from multiple State Capture imbroglios.

Second, the #Guptaleaks records show that Accurate Investments did not receive any money from any other sources besides Liebherr Cranes for the whole of 2013. In 2014, Accurate’s only other sources of income were payments made by an unknown company by the name of VK Trading Hong Kong.

Moreover, all of the payments made by Liebherr to Accurate were almost immediately dissipated into the accounts of other Gupta companies, and used to fund expenditure that had precisely nothing to do with any legitimate consulting work it could have been performing in South Africa.

This much is made clear from the first payment made to Accurate by Liebherr. As noted above, Liebherr paid Accurate $905,000.88 on 22 July 2013. This was more than half a year before Transnet officially announced that Liebherr had won the tender. Within two days, almost all of this money was paid out of Accurate’s accounts to cover Gupta costs, or to the benefit of the Gupta network.

Of this $905,000, $499,5000 was paid to Sahara Computers, $93,378.61 to the agricultural equipment supplier delivering dairy processing goods to Estina, AED475,000 (equal to approximately $129,000 at the time) was paid to a company providing entertainment services at the notorious Sun City wedding, and the remainder given in cash to a Gupta dogsbody in India.

If Accurate performed any legitimate services in South Africa, one would expect to see expenses reflecting the cost of providing those services. Instead, all we see is Liebherr cash being used to benefit the Guptas and finance two of the family’s most notorious endeavours – the Estina dairy farm and the opulent Sun City wedding, attended by, among others, a host of prominent South African politicians.

Perhaps Liebherr might want to have another look at this case, and inform the South African public why they were paying a Dubai company controlled by the Guptas to win contracts from Transnet.

If they don’t, they may start getting asked these questions by people a lot scarier than this group of investigative journalists. DM

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