State capture: NPA could have stopped Guptas 12 years ago, but didn’t bother
The Guptas' alleged capture of swathes of the South African state and suborning of state institutions could have been stopped 12 years ago if the National Prosecuting Authority had prosecuted a R120-million tax and customs fraud case linked to the family.
The NPA now says it cannot explain why such a prosecution was not mounted - because the file has been destroyed.
In 2001 Gupta-owned Sahara Computers and another company, Trump Technology - allegedly a front for Sahara - were investigated by the NPA's Directorate for Special Operations (the Scorpions) for exchange-control contraventions, fraudulent VAT claims and customs fraud committed between at least 1999 and 2001.
There appear to have been two investigations that were conflated into a single docket overseen by the Scorpions. The investigation was apparently concluded in 2003 but the NPA declined to prosecute only in 2005.
The rise of Sahara Computers was a critical factor in the growth of the Gupta empire. It led to the emergence of Oakbay, the vehicle at the centre of many state capture reports today.
Trump Technology, the sole supplier to Sahara at the time, was owned by Johannesburg businessman Herbert Chalupsky, who refused to talk to The Times. Company records show that Atul Gupta and his wife, Chetali, were the directors of Sahara Computers at the time.
NPA said the file alleging
customs, exchange control
and VAT fraud was
destroyed “in line with
SARS sources revealed that the Scorpions started a criminal investigation after a witness came forward with information. The revenue service was already busy with similar investigations and was asked to assist with the case.
In 2002 a whistleblower provided the Reserve Bank with detailed information on how Sahara and Trump Technology were operating their alleged scam. According to official documents seen by The Times, this investigation was then also assigned to the Scorpions for investigation.
After an investigation by SARS, the Reserve Bank, and the Scorpions, a completed docket was handed to prosecutors in 2003.
The alleged scam involved under-declaring the value of imported electronic goods, and then reflecting the items' sale at falsified values on invoices.
Sahara, SARS sources said, gave fraudulent customs clearance certificates to the banks that processed payments to Sahara's foreign suppliers as the basis for submitting inflated VAT refund claims to SARS.
The NPA on Friday said it could not establish why it had declined to prosecute. NPA spokesman Phindi Louw said the file was destroyed in line with regulations.
"Dockets are filed by the police and since this is an old matter we will have to recall the docket from the police to establish what transpired."
She said the advocate assigned to the case had left the NPA and another, who had been assisting him, could not recall the reasons for the failure to prosecute.
Both SARS and the Reserve Bank declined to comment on the investigations, citing confidentiality strictures.
Gupta family lawyer Gert van der Merwe said he had no knowledge of the matter. Family spokesman Gary Naidoo failed to respond to questions.
Customs expert Georgia Mavropoulos said computers and software were a very "grey area" when it came to customs evaluations.