08/12/2016 03:37 GMT | Updated 08/12/2016 08:09 GMT

A Dummy's Guide To The Gupta's Money-Laundering Allegations

It's complicated, but amaBhungane breaks it down for HuffPost SA.

A payment of R17.1 million has revealed how the notorious Gupta family directly benefitted from a highly suspicious transaction — and the evidence suggests that this may not have been the first time. It ties them to Homix, a company that had no staff and a single office behind a blue door, which nevertheless received R144 million in just over six months.

What happened? A yearlong investigation by amaBhungane has revealed evidence that points to an incredibly sophisticated system apparently set up for the benefit of the Guptas from state contracts.

How did they manage the flow of money? We saw how what appears to be a bribe in exchange for facilitating a Transnet contract works its way through a complex series of transactions and companies to land in the Gupta's lap, at their majority-owned TNA Media company.

How much money are we talking about? It appears R17.1 million was a 10% kickback payment on behalf of communications giant Neotel to the Guptas for ensuring that Neotel got a fat Transnet contract. This arrived directly at the Guptas' door, at their TNA Media. Before that, huge amounts flowed to a company linked to them, Homix. We saw R144 million in just six months.

What does this mean? We believe this investigation provides clear evidence of money-laundering. On face value it is a case study in how the Gupta family and associates have allegedly used their political leverage to extract kickbacks from SOE contracts, and move the proceeds to their bank accounts.

But the Guptas have never been charged with anything? Of course, the Guptas have denied all these allegations, blaming a political and media conspiracy against them, while using their media outlets to run a propaganda campaign against the president's opponents. While the Gupta denials are wearing thin, given the litany of claims and their consistent pattern, their trump card has always been that they have never been charged or convicted of any crime.

How did the scheme apparently work? Think of it this way: a playground bully wants a cut of the tuckshop money. The tuckshop has a number of suppliers who want a deal with the tuckshop's owner. The playground bully however uses his contacts in the tuckshop to ensure one of the suppliers gets a deal, in return for a kickback.

What about the bribe? The bully is very smart and processes his kickbacks through a number of bogus payments that eventually sees the money landing in his back pocket.

Who is who in the zoo? In this scenario, the playground bully is a Gupta-aligned company, Homix, and the (very rich) tuckshop is Transnet. Neotel is the supplier who landed the fat contracts and Techpro is its subcontractor, who is benefiting too.

How did the money get from Transnet to the Guptas? At first, Neotel and other Transnet contractors paid kickbacks to Homix, from where the money flowed to uncertain destinations, although with signs of Gupta involvement. But in the latest case the evidence shows that Transnet paid contract fees to Neotel, which paid Techpro, which paid the loot — R17,1 million — to Regiments, which in turn paid it to the Guptas' TNA Media.

But how . . ? The evidence before the court is that Homix boss Ashok Narayan asked Eric Wood, a director of Regiments, to invoice Techpro for R17,1 million, and Narayan organised TNA Media in turn to invoice Regiments for the same amount. The payments happened on two successive days.

Who are these people? Homix is a shelf company whose CEO Narayan previously managed the Guptas' Sahara Systems business. Homix would have intervened on Neotel's behalf at Transnet. Techpro was a subcontractor to Neotel and Regiments had a director, Eric Wood, who sided with the Guptas. Techpro and Regiments appear to have been roped in when the bribes couldn't be channelled through Homix.

What now? Nothing. After Neotel's auditors blew the whistle on Homix, it was reported to the Hawks. But their spokesman says he's unaware of any investigation.

Where did all the information come from? The latest evidence only emerged from a dispute in which Wood and his former partners at Regiments are suing each other in the High Court. (Wood has left Regiments for Trillian Capital, which he runs along with another Gupta associate.) We have relied on banking, Neotel and Transnet records, as well as other information, for the wider story.

And what do Transnet, Neotel and Techpro say about it all? Transnet has denied wrongdoing and won't investigate. Neotel did an earlier investigation which led to the resignation of its chief executive and financial officers, but it seems loathe to reopen the wound. TechPro says it doesn't know what to think and has asked its lawyers to investigate.

But surely it needs to be investigated? We believe that in a country with a functioning criminal justice system, the police would have already opened a case against Wood and Narayan. They would be preparing an application in terms of the Prevention of Organised Crime Act (Poca) to secure the assets of TNA Media and seeing who else they could pull in via Poca's very wide racketeering net.

What about the Hawks, after all, they're responsible for organised crime? The fact that this prospect is laughable under the present leadership of the Hawks is down to one man: Jacob Zuma. What this story does, in our view, is significantly to buttress the allegation that Zuma is at the centre of what is essentially a criminal enterprise, a racketeering conspiracy that is the dark heart of the "state capture" narrative.