The Gupta Family: Corruption in South Africa

Por: Laura Paola Villa García | Posted on December 31, 2019

Context

Who is the family surrounding this corruption scandal? The Gupta brothers are a family of businessmen from India who moved to South Africa at the end of apartheid. They are mainly interested in mining, air travel, energy, technology and media (“South Africa’s Gupta brothers sanctioned by US over ‘corruption'”, 2019).

Facts: Who gave what to whom and why?

The Gupta, one of the richest families in South Africa self -imposed exile after a scandal of corruption involving ex-president Zuma and the party once directed by Nelson Mandela (Onishi & Gebrekidan, 2018).

The family, originally from India, arrived in South Africa selling shoes and years later became the most influential family of the country at the end of apartheid. How did they become rich? Apparently, after Mandela’s election in 1994, the family made connections with leaders of his party sought to mass wealth in the African National Congress. Slowly, the Guptas created ties with bureaucrats and became so close with ex-president Jacob Zuma that they made one of Zuma’s son their business partner (Onishi & Gebrekidan, 2018).

Later they bought a coal mine through government intervention and set up a media company which was also directed with the then president. They also made deals with other politicians of the African National Congress, who acted as fixers for multinational companies, which paid them kickbacks (Onishi & Gebrekidan, 2018).

The charges were so serious that Jacob Zuma was forced to resign in February 2018 over allegations of corruption in his government and the Guptas fled South Africa and they are now living in Dubai as a result of these allegations (“South Africa’s Gupta brothers sanctioned by US over ‘corruption'”, 2019).

The Gupta family used their political connections to commit bribery, participate in rigged tenders and drain government assets (“US blacklists South Africa’s Gupta family over widespread corruption”, 2019).

The US government has already taken measures against the Gupta family for their corruption network and has sanctioned members for leveraged overpayments and other corrupt acts (“US blacklists South Africa’s Gupta family over widespread corruption”, 2019).

Law

United Nations Convention Against Corruption

Why the case is relevant?

This case is relevant because it shows how corruption is a new form of government intervention that slowly takes over not only government funds but gives the power to make important decisions such as minister appointments. The Gupta family used their economic power and transformed into political power in order to perpetuate their status in a newly formed country that surged after the end of apartheid. The Gupta’s knew that it was important to get the support of Mandela’s party to fix government contracts and misappropriate state assets.

Lessons learned

Also, it shows other examples of how the US government is looking to exclude not only companies but also people who are linked to corrupt acts abroad from the US financial system as a part of the anticorruption agenda. The case also shows a kind of clientelism, which consist in an unequal system of exchanging resources and favors between the wealthier and the less wealthy(“Anti-corruption glossary”, n.d.) The Gupta family gave the money to public officials derived from rigged contract and they in exchange kept intervening in public procurement to maintain status and wealth.

What type of corruption is it and what are the crimes involved?

This is a case of political corruption as there was a manipulation of institutions, policies and rules of procedures by public officials in order to preserve power and money. Although the Gupta family was not originally from South Africa, in the time they arrived, they created important ties and connections with the political community. Once they gained enough political influence to grow their businesses, they profited from them and gave a portion to public officials in order to have preferential treatment in public procurement though bribes and kickbacks.

 

APA References

Anti-corruption glossary. Retrieved 2 January 2020, from https://www.transparency.org/glossary

Onishi, N., & Gebrekidan, S. (2018). In Gupta Brothers’ Rise and Fall, the Tale of a Sullied A.N.C. Retrieved 31 December 2019, from https://www.nytimes.com/2018/12/22/world/africa/gupta-zuma-south-africa-corruption.html

South Africa’s Gupta brothers sanctioned by US over ‘corruption’. (2019). Retrieved 31 December 2019, from https://www.bbc.com/news/world-africa-50003150

US blacklists South Africa’s Gupta family over widespread corruption. (2019). Retrieved 31 December 2019, from https://www.indiatoday.in/world/story/us-blacklists-south-africa-indian-gupta-family-corruption-1608079-2019-10-10

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"The Gupta Family: Corruption in South Africa"; Laura Paola Villa García, México, 2019.


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