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FBI investigates South Africa's Gupta family - report

October 19, 2017

As probes into the Gupta family intensify in South Africa, the FBI is reportedly also investigating the Guptas in relation to suspicious cash flows between South Africa, Dubai and the US, according to a newspaper report.

Deutschland FBI Logo in der US-Botschaft in Berlin
Image: picture-alliance/dpa/T. Brakemeier

The Federal Bureau of Investigation's (FBI) probe, which has been reported by UK daily Financial Times, comes at a time when the South African special crime investigation unit, the Hawks, has said that the Guptas are part of its investigations into "state capture" -  the raiding of taxpayers' funds by outside interests.

South Africa's parliament has already started grilling ministers and leaders of state enterprises regarding allegations that they have helped the Gupta family engage in systemic political corruption.

Read more: South Africa's power family, the Guptas: What you need to know

The Financial Times says the FBI is investigating individuals, companies and bank accounts for ties with the Gupta family. Top of the list are suspicious cash flows from the Guptas in South Africa, to Dubai and the US.

The FBI has focused its investigations on US citizens, Ashish and Amol Gupta, nephews of South African based Atul and Ajay Gupta.  Cash flows between the company owned by Ashish and Amol, and Gupta linked companies in South Africa, are the subject of the investigation. The FBI suspects that millions of dollars were laundered through accounts linked to the Guptas.

A separate investigation, also revealed by the Financial Times, is being conducted by Britain's banking regulator, the Financial Conduct Authority (FCA). It said that it was making inquiries into two UK banks over any possible links to the Gupta family and the banks' potential exposure to illicit funds.

Portrait of Ajay und Atul Gupta sitting behind a black desk
Ajay and Atul Gupta are under investigation in South Africa and abroadImage: Imago

Read more: South African unions protest corruption, Jacob Zuma's rule

Today, members of parliament took Deputy President Cyril Ramaphosa to task on the issues of state capture. Floyd Shivambu, an MP from the Economic Freedom Fighters party, wanted to know why companies linked to the Gupta family are not being investigated for their alleged involvement in the corruption scandal.

 "Why hasn't the government done anything about the 500 million rand (US$37 million, 31 million euros) that have been paid to [Gupta-linked company] Trillian Capital? Why is there no forensic audit? Are you scared of the Guptas?" Shivambu demanded.

Ramaphosa, who has contradicted Zuma on a number of issues, including his cabinet reshuffle and is now seeking to take over from Zuma, was clear and blunt in his response.

"Any amount that has been paid out unduly should be returned and should be returned immediately. Those who were responsible in dispensing all these monies should be taken to book," he said.

Leaked emails

The FBI investigations coincide with a string of leaked emails in South Africa showing that the Guptas have had undue influence on President Jacob Zuma, his ministers and leaders of government-owned companies, making millions of dollars in the process.

A report by former Public Protector Thuli Madonsela has shown that Zuma was at the center of state capture, with testimonies that he consulted the Guptas on his appointment of certain ministers. Zuma has refuted these allegations.

Zuma's son, Duduzani, a business associate of the Guptas, has been cited in the leaked emails as the main facilitator of the corrupt dealings. He has also denied the claims.

The Gupta family has described the allegations as a political smear campaign against them

Südafrika Pretoria - Südafrikanischer Präsident Jaboc Zuma
South Africa's President Zuma is coming under increasing pressure Image: Reuters/S. Sibeko

Parliament has embarked on a process of summoning ministers and heads of government-owned companies to answer questions on their alleged involvement in the state-level corruption. As yet, no one has been prosecuted.

Read more: Zuma corruption allegations: South African court rules to reinstate charges

Professor Ivor Chipkin, University of Witwatersrand's Public Affairs Research Institute, says there is only one solution to state capture.

"If we treat the current phenomenon simply in terms of criminality, then we come up with essentially a law-and-order solution, a policing solution. Arrest the Guptas, get rid of Zuma and we will somehow be resolved," he said

Many have welcomed the FBI investigations saying it could provide more information on who has been involved in corrupt dealings and how much South Africa has lost in the process.