Leaving their humble beginnings as a family of traders based in the western Uttar Pradesh city of Saharanpur far behind, the Guptas today have interests in power, coal and uranium mining, real estate, information technology and the media, and have more than 10,000 people on their payrolls in South Africa. Since 2016, the family’s business reputation has taken a deep dive, taking the goodwill of several global firms down with it. The dive turned steeper when a series of investigative reports, titled #GuptaLeaks, including some by South African non-profit organisation, amaBhungane Centre for Investigative Journalism (ACIJ).
In India too, there are allegations that the Guptas have misused their association with politicians and powerful people. The charges against the Guptas include what the South African media has termed “state capture” (i.e., buying influence in the government, controlling cabinet appointments etc), using substandard materials, tax evasion and money-laundering. The group, owned by three brothers, has denied these allegations and claimed they are being targeted for reasons of political and business rivalry.
Ajay Gupta, the eldest of the three brothers, is a close friend of South African president Jacob Zuma. This has led to allegations of crony capitalism. Zuma’s son was employed in Gupta’s businesses until 2016 when he was forced to resign due to public pressure. Zuma is expected to announce an independent probe by a former judge soon, and if he doesn’t, the Opposition has warned it would take the matter to court.
The worst hit are global firms such as audit and consultancy firm, KPMG and consultants McKinsey. The Guptas had hired the PR firm Bell Pottinger, but exposes of the image consultants’ work soon had Pottinger hurrying to clean up its own image. KPMG recently went on record to review and reveal a part of its wrongdoing, replace its top management in South Africa and start digging for more problems in its 15-year-old relationship with the Gupta businesses.
A protest in SA against Zuma, demanding his resignation
The audit firm has also had to come clean about one of its manipulated reviews (for the country’s revenue service) which smeared South Africa’s former finance minister. Eventually, at least one politician had come on record to say that the Guptas were offering him the finance ministry. Another said he had been made a similar offer back in 2010. Zuma had denied these claims in the South African parliament.
The Guptas have found only sporadic mention in the Indian media, but there is no dearth of anecdotes revealing their bonhomie with old friends and proximity to UP politicians, nor of allegations of grey real estate deals and the contentious construction of a temple on a public cemetery, allegedly by buying influence.
Outlook sent a detailed questionnaires to Ajay Gupta and the company on October 10, a week before going to press. His response is still awaited.
Ajay, Atul and Rajesh Gupta are sons of Shiv Kumar Gupta, a small-time trader in Saharanpur, who—according to Javed Sabri, a local journalist who claims to be Ajay’s friend and says he plans to contest the mayoral election in Saharanpur on a Congress ticket—turned out to be a man with a vision. Detractors, suspicious of the origins of the Gupta family’s seed capital and their subsequent leap to wealth in South Africa, point out that the father was not rich, but had big plans for the sons. “Shiv Kumar used to borrow from other traders to raise purchase costs. Often, he made just enough to repay the loans. So, he had to sell the sacks used for packing the goods, besides selling milk procured locally,” says a local trader who had known him briefly.
Sabri recalls that Shiv Kumar was aware of South Africa’s business potential. “He encouraged Atul to work with computers, while Ajay was working with an export firm in Delhi, where he learnt about running a business abroad,” says Sabri. In 1993, the sons shut down their businesses and left for South Africa. After the father died a few years later, they took their mother to South Africa.
Atul Gupta outside his Johannesburg house
Sometime in the 1990s, the Gupta family tried investing in India. They invested in a partnership with Subrata Roy’s Sahara Group for a computer company, Sahara Computers and Electron-ICS Ltd. Roy’s group severed ties with the Guptas after the venture went bust, says a Sahara insider.
The names of several Samajwadi Party leaders figure in the list of political ass-ociations. Ajay’s list of friends reporte-dly includes Azam Khan and Shivpal Yadav, while former CM Akhilesh Yadav is believed to have kept a distance. Rajiv Shukla and Amar Singh are alleged past associates.
“If you meet Ajay, you will see how easily he bonds with people. It’s no surprise that powerful people, such as the South African president, are his close friends. And yet the Opposition and White media owners are spinning it into something suspicious,” says Sabri, who also seems to have a lot of friends. The walls of the living room of his residence in Saharanpur’s Nawabgunj area are packed with his photographs with famous people. There are many with Bollywood actor Anil Kapoor, cricketer Kapil Dev and journalist-turned-politician-cum-cricket administrator Rajiv Shukla. In one corner is a photograph with former UP minister Azam Khan, but more to the centre, next to one with former Uttarakhand CM Harish Rawat, is a photograph where Shukla seems to be introducing him to industrialist Mukesh Ambani. There are some with Ajay, including one where he and Sabri are flanking the South African president. Was it taken in South Africa? “I have been there many times. I also met Zuma-ji when he was here for the Africa Summit,” answers Sabri.
Sabri says that Shiv Kumar was a devout man and frequently visited the memorial of Baba Lal Dass, a local saint in Saharanpur,. “He would bicycle there to feed pigeons and cows during the day and, at night, he would visit the cemetery behind the memorial to pray,” says Sabri.
The Guptas’ house in Saharanpur, UP
Back in 2005, the Guptas arranged for an unscheduled diversion of the South African team when it was touring India. It made for great optics, a son of the soil had brought in an international cricketing team to Saharanpur. Politicians came from Lucknow, the editor of one of the largest Hindi dailies travelled from Delhi to be the guest of honour.
“There are security restrictions that require Ajay to travel with bodyguards, but when he’s here, he can walk with you, ride a bicycle or sit pillion on a scooter,” says lawyer Sanjiv Sharma, Ajay’s classmate in school who now represents him in some local real estate disputes. Ajay usually flies down in a chopper and lands on a specially built helipad, with top district officials waiting to welcome him. Anil Gupta, spouse of the only sister of the Guptas, looks after the local businesses, including real estate investments. He had state cabinet minister status as a member of Uttarakhand’s planning commission under the erstwhile Congress-led government.
Another lawyer, Rao Killan, had filed a criminal complaint against Ajay, Anil and six others. Killan had to get a magistrate’s directive to have the case registered as the police were reluctant. Sharma and Sabri dismiss Killan, who has filed many civil and criminal cases against the Guptas, as a cunning lawyer out to harm the Guptas.
One case Sharma didn’t want to talk about concerns a temple complex the Guptas have been building around an old temple. Said to cost Rs 200 crore, it is “Saharanpur’s response to Delhi’s Akshardham”, say Sabri and Sharma. Spread over seven acres, it’s much smaller than Akshardham. A site engineer says the facade is being made with pink sandstone from Rajasthan and the int-erior with marble from Ethiopia as well. The premises include a guest house for devotees, the 125-foot-high under-construction temple and the old temple.
The Guptas want to convert the Paondhoi river flowing to the complex’s east into a Venetian canal, but their entreaties to the government to clean it have gone unheeded. The stream is of a dark grey colour and gives out a pungent odour contributed by the refuse emptied into it by several drains upstream.
The temple is situated near a cemetery, and as per Hindu customs, approaching a temple past it is a strict no-no. The brothers solved it by getting the UP state government to build a bridge across the canal from the west bank. This was allegedly made possible by diverting the district’s rural development funds.
The temple is more than half done, but some years ago the local media reported that it was being built atop a Hindu cre-matorium. “One day, when the land was being dug up, we saw human remains,” alleges Dinesh Chand Singhal, who was a site manager there for less than a year in 2014-15. “I later discovered that the religious trust has encroached on land of the crematorium, which is illegal according to Supreme Court decisions.”
Singhal shared a set of RTI replies and land records to show how much land the religious trust has allegedly encroached upon. “One day, electricity officials turned up to disconnect the connection. The trust was using a 5KW connection (meant for domestic use) to run machines that require up to 70-80 horsepower. There were cash payments in lakhs for the raw materials, many of which were illegally mined locally,” alleges Singhal, who shared documents to back his claims.
Singhal had engaged Killan and filed several cases against the trust, claiming it has fudged construction plans with the help of corrupt officials, evaded development tax of nearly Rs 1 crore, felled trees, committed electricity theft and so forth.
“The Guptas bought into the trust with Rs 25-30 crore. Then, the trust passed an illegal resolution that the two Gupta family members would have equal voting rights and shares as the rest of the trustees. A public trust cannot be run like a company,” says Singhal, who might be a disgruntled former employee just as Killan may have extraneous objectives. Anticipating that the local authorities will not be able to prove the cases, they plan to approach the Allahabad High Court, seeking a special investigation team. It is also learnt that CM Yogi Adityanath’s office is looking into the allegations.
Sabri says the South African media became disenchanted with the Guptas when they launched a newspaper called The New Age in 2010 and followed it up with a television news channel. Al Jazeera has reported that the newspaper was used to plug pro-Zuma stories. The newspaper received the same government ad revenue as others with 10 times the circulation. The dying state airline spent around a million dollars in stocking the newspaper on its flights.
In 2013, the Guptas enlisted several Indian journalists when they launched a TV channel, ANN7, with the help of Essel Media’s Lakshmi Goel. Journalist Rajesh Sundaram was asked to head the new channel. He detailed his experience with the Guptas in an unpublished “book” he wrote in 2014, which he has titled “Indentured: Behind the Scenes at Gupta TV”. “What was to be a world-class news channel lapsed into a circus of meddling by the owners, who misbehaved with the staff,” says Sundaram, who had to literally “run” from South Africa. The Guptas recently sold their stakes in the media to one of Zuma’s former spokespersons.
The lack of media independence comes across in a 2014 e-mail exchange between the then KPMG CEO and senior partner, Moses Kgosana. The latter asked Atul for advice on how to deal with an adverse news report that had appeared in The New Age. Kgosana, the e-mail shows, had been invited to Atul’s daughter’s wedding and, as ABCIJ notes, was “gushing” about having attended it with his wife. Atul Gupta did respond to Kgosana and said that the Guptas’ “media group CEO will look into it immediately”.
By Ushinor Majumdar in Saharanpur (UP)