AMABHUNGANE: Guptas 'tried to use front' to extract Sahara assets. While the purported buyer of two aircraft owned by Sahara Computers was a

Dubai-based clothing trader, questions raised by Nedbank and the Reserve Bank

about the transaction exposed Gupta son-in-law Akash Garg Jahajgarhia as the

hidden hand behind the purchase.

Garg is the young man who married Vega Gupta at the controversial 2013 Sun

City mega-wedding that was partly funded from laundered Free State government

cash.

20-million rand is a small amount in Gupta terms, but the fronting and Garg's role

indicates the process by which the Guptas may have hidden their influence in

much larger deals, such as their 2017 attempt to "sell" their interest in

Optimum Coal via a Swiss company, Charles King.

There are suspicions that the Guptas attempted to externalise their holdings

via place-holders with whom they were acting in concert, although in the case

of Charles King this remains unproven.

Now the more modest attempt to sell two of their aircraft, a Hawker XP 400 jet

and a Kingair 350 twin prop, seems to have exposed Garg as one of their

patsies.

The aircraft saga began on 26 March when a Dubai company named AGEV Investment

Limited attempted to make a payment through Bank of Baroda to Sahara Computers

in the amount of $1.7-million (about 19.7-million rand at the time).

The transaction was described as "payment for inventory".

Nedbank, which hosts the Baroda banking platform in South Africa, queried this

payment, leading the Baroda South Africa bank manager, Gurbax Singh, to write

on 27 March to Ravindra Nath and Ronica Ragavan of Oakbay Investments.

Oakbay is the main holding company for the Guptas' investments in South

Africa.

Baroda's Singh asked about the purpose of the transaction and requested

supporting documents.

Later that same day Nath sent back a letter purporting to be from a Deepak

Raswant, a director of AGEV, confirming that AGEV made a payment in the amount

of 19,669,000 rand to Sahara on behalf of Ess Emm International FZE, the clothing

trader, "pursuant to the business association between AGEV and Ess Emm".

The letter stated: "AGEV have to make some payments to Ess Emm and as per

their request, Ess Emm asked to make a direct payment to Sahara."

The next day, 28 March, Singh wrote back to Nath.

"Who is AGEV... Who is Ess Emm International... Why would there be a Payment

for Inventory if Sahara has effectively shut down, according to press

reports?" Singh asked.

Nath immediately replied explaining that Sahara was closed, but the assets

such as aircraft and vehicles were being sold to raise funds to repay the

company's bank overdraft with Baroda.

Nath said Ess Emm was a private company buying aircraft for business use. They

were purchasing the two aircraft as per sale agreements already provided to

the bank.

Sale agreements for both aircraft were signed in October 2017 in Sandton on

behalf of Sahara.

An hour later, Nath forwarded another letter from AGEV in which Raswant gave

an anodyne description of AGEV as an "investment holding company...

historically focused on private equity investments in the mining and natural

resources sector".

It seems clear that the correspondence was intended to obscure the fact that a

member of the Gupta family (by marriage) had an interest in this transaction.

Both Nedbank and the Reserve Bank must have remained suspicious, because in

correspondence seen by amaBhungane they raised a series of concerns, including

whether Sahara had obtained permission to export the aircraft and whether they

were not being sold at below market value.

Selling at below market value to a related company abroad may amount to an

attempt to bypass exchange control regulations and externalise assets

irregularly.

Nath attempted to bat the concerns away. What he did not disclose -- at least

at that point -- was that Gupta son-in-law Garg was the 100% beneficial owner

of AGEV. Of course, anyone who then Googled the name would have established

Garg's relationship with the Gupta family.

Nor was it disclosed that Garg's company, AGEV, made a loan to Ess Emm

International, which Ess Emm was to use to purchase the aircraft.

Documents seen by amaBhungane show that the loan agreement was signed on 5

December 2017.

It is understood by amaBhungane that the true reason AGEV attempted to make

the $1.7-million payment directly to Sahara in March instead of via Ess Emm

was that AGEV was informed a few days earlier that Ess Emm was unable to make

the payment (in terms of the loan agreement) because its bank account with

Dubai's RAK Bank had been summarily closed.

None of the numbers listed for Ess Emm in Dubai currently operates. The email

address listed in its contract to purchase the aircraft bounced.

As a result of unresolved concerns the funds transferred by AGEV were held by

Nedbank and not released to Baroda for the benefit of Sahara.

By May 2018 the funds had still not been credited, despite threats and

entreaties from Nath to Baroda to either transfer the money or pay it back to

AGEV.

It was only on 28 June -- in response to specific questions from the Reserve

Bank -- that Nath disclosed that Garg was the 100% shareholder of AGEV.

Even then, Nath did not disclose that AGEV had granted a loan to Ess Emm, part

of which was specifically intended to fund the aircraft purchase.

"Funds relating to US$1.7-million are currently held in a South African

Reserve Bank (SARB) account with Nedbank," Nedbank told amaBhungane.

"We are not at liberty to comment on whether SARB is of the view that there

has been a contravention in relation to the payment."

Exchange control regulations provide for the payment of a fine of 250,000 rand or

a maximum five-year prison term for contraventions which include neglecting to

furnish any required information or providing false declarations.

The regulations also set out the grounds on which the Reserve Bank may attach

money if there is an actual or a suspected contravention of exchange control

regulations.

Garg, Oakbay and Baroda did not respond to requests for comment.

The aircraft transaction adds to suspicions that Garg effectively made himself

available to launder money for the Gupta family via earlier transactions

involving the Dubai-based Centaur group.

The #GuptaLeaks showed that in July 2014 Garg formed a Bermuda-registered

joint venture named Centaur Ventures, in which he and Centaur Holdings held

50% each.

In January 2016, Centaur Ventures extended a 1.5-billion rand loan facility to

Centaur Mining South Africa, where once again Garg was involved.

Much of that "credit deal" appears to have been funnelled into providing the

means for the Guptas' controversial purchase of Optimum Coal.

In short, 885-million rand was deposited by the local Centaur Mining with Bank of

Baroda, which used that as security to lend the same amount to Gupta company

Tegeta Exploration and Resources.

Tegeta then put this towards the purchase price of Optimum Coal in April 2016.

There was also an attempt to use Centaur Ventures to buy out the audit firm

Nkonki Incorporated in late October 2016. Gupta lieutenant Salim Essa

subsequently -- and secretly -- provided the funds.

Centaur did not respond to requests for comment. DM

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