Would the Guptas be as wealthy as they are without Zuma?

23 April 2017 - 02:00 By Pieter-Louis Myburgh
Atul Gupta at his home in Saxonwold in Johannesburg. File photo
Atul Gupta at his home in Saxonwold in Johannesburg. File photo
Image: KEVIN SUTHERLAND

In his book ’The Republic of Gupta’, award-winning journalist Pieter-Louis Myburgh looks at how the controversial family started from humble beginnings and set about getting their tentacles into the centre of political power in South Africa

It was 1995 and South Africa appeared to have shaken off some of the early jitters of its transition to democracy. A wave of patriotism was now washing over the country, partly driven by the Springboks' fairy-tale victory over New Zealand in the Rugby World Cup final held in Johannesburg in June that year.

Nelson Mandela's dream of a Rainbow Nation was within reach and the country's economy had absorbed some of the new-found optimism. Businesses, particularly those in the nascent IT sector, sought to exploit the opportunities that accompanied the new political dispensation.

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It was within this context that John, a Johannesburg-based businessman, met Atul Gupta and his entourage for the first time. John's business had a footprint in South Africa's young IT sector and Atul, who had been busy setting up Correction Computers and Correct Marketing, his two earliest IT ventures, needed help establishing a network of business contacts in his newly adopted city.

"I was at my business's premises when four guys pitched up there in a Toyota Camry, one of those with the little wing on the boot. One of the men introduced himself as Atul Gupta," recalls John. The other men were introduced to him as Mr Roger, Ashu and Tony. Ashu would turn out to be Ashu Chawla, the Gupta associate who would later become the CEO of Sahara Computers. Tony may well have been Rajesh "Tony" Gupta, the youngest of the Gupta brothers.

This first encounter was the start of a business relationship that would last for years, one that would give John a front-row seat to the rapid evolution of the Guptas' earliest ventures into a multibillion-rand business empire.

"Correction Computers was first operated from a house on Van Buuren Road in Bedfordview," he recalls. "It was one of those houses that had been converted into offices. At that stage they knew nobody in town. They were going around making contacts and finding people who could help them with various aspects concerning their new business."

About two years after that first meeting, Atul told John that the family had decided to move their IT endeavours under the umbrella of a new brand and identity, namely Sahara Computers. This new venture, says John, originally operated from a small shop in a retail complex in Midrand. As the business grew, the Guptas opened a second store in Midrand. This would serve as an assembly facility for Sahara Computers.

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"What they had was a [computer] box on which they put the Sahara logo. The motherboard came from whomever was making motherboards, the chip came from Intel, the hard drive came from another manufacturer. They just put the computers together at the assembly facility in Midrand. But in those days that was how everyone did it, not just Sahara," explains John.

Through his interaction with the Guptas, John witnessed some of Atul's less savoury business practices. "He was very hard on his staff; he drove them like mad. It was like drawing blood from a rock. That was just how he operated."

Atul apparently also had a way of getting, or at least trying to get, all manner of services for his businesses without having to pay for them.

"Even though we were in business, Atul always put pressure on me to do certain things for free," recalls John. "He actually wanted everything for free. It was a matter of putting one's foot down, otherwise you'd end up making a loss in your dealings with him."

But when it came to getting paid himself, Atul made sure he was never short-changed. "I once saw how one customer's cheque for a new computer bounced, and Atul would only finally be paid about a week later. He almost cried like a stuck pig over this one bounced cheque," John remembers.

By 1998, about a year after Sahara Computers was established, Atul's Toyota Camry was replaced with a BMW M5. "I remember how proud Atul was of his new car," John recalls. "He came to me just to show me his new set of wheels." It would seem that by now Atul viewed John as a confidant, someone with whom he could share some of the more sensitive titbits about his business activities.

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"It was around the time that Atul showed me his new car that he mentioned the name Jacob Zuma," says John. "It is actually crazy how frank he was about this, but he bragged about having an ANC guy in his pocket. Atul said that when this guy eventually becomes president, their [the Guptas'] ship was going to come in big time."

Atul allegedly told John that he was paying school fees for some of Zuma's children.

"At the time I didn't really take it seriously," says John. "Zuma was a little-known guy with no hope of ever becoming president. I didn't think a Zulu would stand a chance in an ANC that was dominated by Xhosas."

Zuma had, in fact, been elected deputy president of the ANC in December 1997, with Thabo Mbeki as the party's president. At that stage Nelson Mandela was still president of the country. There was no guarantee that Zuma would become deputy president of South Africa after the next national elections in 1999, but he was certainly a rising star.

The Guptas themselves claim to have met Zuma in the early 2000s, when he was already deputy president of the country. Gary Naidoo, the family's long-standing spokesperson, once told the Mail & Guardian that Zuma met the Guptas in 2001. Atul Gupta later told the Sunday Times that the family's first meeting with South Africa's then second-in-command took place "around 2002, 2003", when Zuma attended an annual function hosted by Sahara Computers.

But according to John, they met him earlier. And, considering the recent revelations about the Guptas' relationship with the Zuma-led government, John is convinced that what Atul allegedly told him all those years ago was true.

"Would the Guptas be as wealthy as they are without Zuma?" John asks. "Not at all. They targeted him right from the start, and they chose to go into that type of business path way back then."

These are all just allegations, of course. But John's knowledge of the Guptas' earliest business dealings in South Africa certainly suggests he was privy to information that could only have come from the family. This includes the name of the small insurance company that to this day insures the Guptas' businesses.

A director at the insurer confirmed that his company is indeed a service provider to the Guptas. John also has a cellphone number for Atul that does indeed belong to the middle brother.

In addition, John's claim that the Guptas met Zuma as early as the 1990s is backed up by a former Indian diplomat who was based in South Africa at the time.

block_quotes_start They [The Guptas] targeted him [Jacob Zuma] right from the start, and they chose to go into that type of business path way back then block_quotes_end

In April 2016, after revelations came to light about the family's alleged job offers to top government officials, a former Indian high commissioner told the Cape Times: "I remember them [the Guptas]. They were courteous but we were all familiar with their proximity with Zuma in the 1990s. It was understandable that they [would] prosper when he came to power."

John was also able to refer me to another of the Guptas' earliest business associates, a Gauteng-based businessman who I will call Joe. Like John, Joe witnessed the rapid growth of the Guptas' computer and IT empire in its earliest days, from selling computers from a rented house in Bedfordview to the establishment of Sahara Computers and its subsidiaries.

Sometime during the mid-to-late 1990s, Joe visited Atul Gupta at Sahara's first business premises in Midrand. Joe recalls how small the operation was at that stage: "There was just Atul, the lady that was making the tea and a little Chinese guy called Evan Tak. It was just those three, and there were computer boxes lying everywhere." (According to records at the CPIC companies registrar, Tak became a director at Sahara in 2009.)

Soon thereafter, Sahara Computers moved to another office just around the corner from the first. It is the building that Sahara occupies to this day, while the former is now home to Annex Distribution, a Sahara-owned company that distributes Sahara's computer products. "I remember how excited Atul had been about the new building," remembers Joe. "When they moved in it was in quite a bad state. The plugs were hanging from the wall and there were electrical wires coming out of the ceiling."

He says it was "incredible" that the Guptas were able to afford such large premises after launching their company just a few years earlier. And after the move, things "just exploded" in terms of the business's success, he adds.

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"I think they just really had a good business model at that stage, and their timing to enter the computer market was just perfect, seeing as everyone needed computers then," Joe recalls. "They were running specials for something like R2,000 or R3,000 for a whole computer set, which was significantly cheaper than most of their rivals in the industry."

While he remembers Atul as a humble and friendly person, Joe, like John, also experienced the Gupta brothers' more ruthless side. "Whenever I did work for them, Atul would [haggle] over the bill I'd send him. He would always maintain that he could get the job done for much cheaper elsewhere, and then he'd end up paying me only half of what he owed me."

Joe also witnessed first-hand the inner workings of the Gupta family structure. "Ajay Gupta is definitely the main guy," he says. "When he walked into the office, everyone would stand up, and when he spoke, everyone would keep quiet to hear what the big boss had to say."

Although the Guptas never discussed with him any details about their ties to government officials or politicians, Joe did pick up signs as far back as the early 2000s that Atul had a connection with Zuma. "I do remember seeing a photo in Atul's office of him and Zuma at a school somewhere, with a whole bunch of computers," remembers Joe. "It was during the time when Zuma had still been deputy president, so it had to have been before 2005."

While the context of the photograph is unclear, it is nevertheless interesting to note that one of the Guptas' first major government contracts was for the supply of computers to schools.

'The Republic of Gupta' is published by Penguin Random House and sells for R260