Witness To Power — Mathews Phosa on how he avoided the Guptas’ honey traps

My first encounter with the now infamous Gupta brothers was in early 2008. As the newly elected president and treasurer-general of the ANC, Zuma and I had met at his Forest Town home to discuss the political environment, when he told me there were “some people” he wanted me to meet. Indicating that I should follow in my own car, Zuma set off in a small red Corolla.

We drove north into the wealthy suburb of Saxonwold. At an address on Saxonwold Drive, huge gates swung open to admit us. It was as if they were expecting us. I parked my car and was ushered up the steps of a white, porticoed entrance into the luxurious mansion beyond. It was here that I was introduced to the three Gupta brothers – Ajay, Atul and Rajesh – none of whom I had met before.

After exchanging the usual niceties, the discussion turned to the ANC and funding. It was no secret that the party was facing some serious financial challenges and that we needed substantial support if we were to change our fortunes ahead of the 2009 general election. The Guptas presented themselves as a wealthy and influential business family from India with a wide network of contacts in that country. I said that, if this was true, I’d like them to find out if companies such as Tata and Reliance would be willing to donate to the ANC. 

At some point the Guptas boasted that they were acting for Anil Ambani of the Reliance Group. The Ambani family is one of the richest in India. The brothers indicated that Reliance wanted to invest in MTN, but on condition that the primary listing be in India. I replied that our laws governing stock-exchange listings would not allow that.

I had been listening to Ajay, Atul and Rajesh, whom everyone called Tony, with an open mind, but alarm bells began to sound when they told me they’d be willing to fly “Baba” (as Zuma was commonly called) to any destination the ANC identified as a potential source of party funding, including India, free of charge. This remark made me immediately uncomfortable. I feared where the discussion was leading and whether we were being compromised. We were in the midst of a complex and politically sensitive process trying to extricate Zuma from the Schabir Shaik scandal and had a duty to protect him from any similar embarrassment. If it emerged that we were being flown around the world for free, it would only add to the ANC’s and Zuma’s sorrows. I firmly told them as much.

As we were having this discussion, Brian Molefe, then the CEO of the Public Investment Corporation, entered the room, greeted us and then casually wandered off into another part of the house. I had the distinct impression that he was familiar with both the house and the family. Molefe would later become CEO of Transnet and then Eskom.

Tony Gupta then suggested that we open an overseas bank account for the ANC into which they could pay the funds that they sourced for us. After some discussion, we agreed on opening an account in Dubai.

Towards the end of the meeting, the brothers surprised me with a business proposal. They needed a local partner for one of their companies, Sahara Computers. I said I would look into it. After some research, my staff and I came to the conclusion that Sahara was nothing more than a shelf company with few assets and limited operating capabilities. While our finding was incorrect, it was fortuitous. I never replied to the offer and it was never repeated.

I travelled to Dubai some weeks later in my capacity as ANC treasurer-general. I flew with Emirates and stayed at the Burj Al Arab, all at the party’s expense, despite an offer from the Guptas to foot the bill. The day after my arrival, Tony and I visited a financial institution and opened an ANC bank account as joint signatories. Afterwards, Tony said to me, “We have to talk”, and so we went to a restaurant not far from my hotel. To my great discomfort, he launched into excessive flattery, indicating that, in their view, I was the natural future successor to Zuma and that he and his brothers had only the highest respect for me. He said they knew that Zuma also deeply respected me. I did not react to his unfortunate adulation, wary as I was of where this was all leading.

It was then that Tony proposed an arrangement whereby the funds that accrued to the account we had just opened be managed in a particular way, namely that one-third went to the Guptas, one-third went to “Baba” and one-third to the ANC. I was infuriated but tried my best to remain calm. I refused point-blank to agree to his proposal, which, I told him, could potentially cause substantial harm to Zuma, the ANC and others. My position made clear, I bid him goodbye and left, leaving him at the restaurant.

A month or two later, the Guptas dispatched a go-between to meet with me in my Johannesburg offices. The woman conveyed to me a request from the brothers to remove my signature from the ANC’s Dubai account. I refused to sign the forms to effect this change, and told her that I could not, in good conscience, sign anything without knowing what would happen to the funds that may already be in the account. She left without my signature, and to this day I do not know whether any money accrued in that account and, if it did, how it was disbursed.

I decided not to burden my fellow members of the Top Six with the details of my dealings with the Guptas, as I dismissed it as all a load of rubbish and a waste of time. I did not realise, at that stage, the extent to which they had already infiltrated the ANC, its leadership and the institutions of government.

In the national elections in April 2009, the ANC won 65.9% of the vote, and Jacob Zuma was inaugurated as the country’s president. 

My next encounter with the Guptas was when they walked unannounced into a meeting of the Top Six, which consisted of Zuma, Kgalema Motlanthe, Baleka Mbete, Gwede Mantashe, Thandi Modise and me. Aside from Zuma, none of us knew they would be attending. We were told that it was part of the president’s agenda. The innuendo was that their presence should not be questioned.

It quickly became apparent that Ajay Gupta was there to pitch the creation of a newspaper that would be sympathetic to the ANC. I wanted to know if they were asking us to endorse the newspaper and get the buy-in of government. Ajay jumped up and said that I had read the situation correctly – a misguided compliment. In essence, government would be required to fund 47% of the planned newspaper, mostly through advertising. I questioned the business model and wondered if such a venture would be financially viable. I also stated that we should not be involved in funding what should be an independent undertaking, regardless of where its sympathies lay.

We did not take a decision at that meeting, and never revisited the issue, although I later learnt that Jessie Duarte, who was chief operations officer in the Presidency, had visited the provincial premiers and requested their support for the paper, which was eventually established in June 2010 as The New Age. Their first major customer was the Free State, under the premiership of Zuma ally Ace Magashule.

In September 2010, at the ANC’s third National General Council meeting in Durban, I ran into Tony Gupta. I asked him when I could expect a contribution from the Guptas to the ANC’s coffers. “But we have already made a contribution,” he replied. “We gave Baba R20-million!” I was shocked and told him I was unaware of the donation. It was not reflected anywhere in the statements of account of my office as treasurer-general of the ANC. I had no idea if he was telling the truth, but it made me extremely uneasy.

While turning down the Guptas’ approaches was ethically the right thing to do, my criticism made me deeply unpopular with some of my comrades. I was vilified as the enemy of my own president in The New Age and later on ANN7, the Guptas’ 24-hour satellite TV news channel.When I opposed the Chancellor House-Eskom deal on the basis that the ruling party should not benefit financially from any state-owned enterprise, let alone government tenders, the attacks on me were public and unsubtle.

I am thankful that I had the insight, and divine protection, to personally avoid the honey traps that so deeply stained our reputation and economic fortunes. Millions of people have been disadvantaged by the money siphoned to the Guptas and others, and the manifesto promise of a better life for all has, once again, been postponed. DM

Witness to Power, published by Penguin Random House, is a gripping story of underground activities, military operations, negotiations, political conflict and intrigue. It provides fascinating new insights into the ruling party and its leaders by an ANC elder who worked with them all.