Even crime families need excel spreadsheets.
How else were the Guptas supposed to keep track of the R5.3 billion in kickbacks they were expecting from three different Transnet locomotive contracts?
Although Parliament has so far focused its attention on Eskom, Transnet was the most deeply captured of all the state-owned enterprises and by value the locomotive deals were the Guptas' biggest heist, dwarfing the Estina dairy project.
One of the great discoveries of the #GuptaLeaks is the spreadsheet which details how Gupta front companies received kickbacks from China South Rail (CSR) on Transnet locomotive deals starting as far back as 2012.
The spreadsheet details what portion of the purchase price of each locomotive would be paid to front companies (20 – 21%), the amounts already paid (in US dollars), and how much the front companies would retain as their fee for laundering the payment (15% of the kickback), and the ultimate payment the Guptas would receive (R5.267 billion).
But until now there has been very little information about what the Guptas did to justify the massive kickbacks they received.
After amaBhungane published the allegations from the #GuptaLeaks last year, Transnet hired Werksmans to conduct an independent investigation. But their report has been held back as supposedly "incomplete and inconclusive" by a Transnet board still dominated by Zuma-era appointees.
Now investigations by amaBhungane and Scorpio show how the Guptas pulled it off.
The evidence suggests the family wove a web of influence around Transnet – and then used it to demonstrate their muscle to manufacturers bidding for the huge contract to supply 1 064 locomotives for Transnet's general freight business.
Central to this show of influence were manoeuvres around two earlier locomotive deals – known as the 95 and 100 locomotive contracts – in 2012 and 2013.
The new information highlights the role of Iqbal Sharma – a business partner of Gupta lieutenant Salim Essa, who served as the chair of the crucial Transnet Board Acquisition and Disposal Committee and was seemingly able to intervene in tender processes in ways that ultimately benefited the Guptas' main client, CSR.
Sharma has denied any wrongdoing – see his full response below:
Transnet declined to answer detailed questions, while CSR failed to respond at all.
The information also shows how the Guptas tried to gain control of a parallel R50 billion tender at the Passenger Rail Agency of South Africa (Prasa), which fell under the Department of Transport.
It failed, but provides a case study of their modus operandi at the time and the enormous clout they drew from their relationship with then president Jacob Zuma and his son Duduzane.
Part 1: Meet the Guptas
Our story begins with an extraordinary rendezvous at the Gupta compound in Saxonwold on Sunday, June 10, 2012.
On that day, Tony Gupta had summoned Ben Martins, then deputy public enterprises minister, and introduced him to the man who was going to be his advisor, Jacinto Rocha, a former deputy director-general in the minerals department.
Martins and Rocha had never met and it was two days before Jacob Zuma announced an unexpected Cabinet reshuffle.
Rocha confirmed to the Sunday Times last year: "Approximately six days... before the announcement of the reshuffle, Tony Gupta called me requesting to come to Saxonwold... during our meeting he stated that there was going to he a Cabinet reshuffle the following week and that he wanted to recommend me to the future Minister of Transport for me to be one of his special advisers."
Martins neglected to deal with this incident when he gave evidence at the Eskom state capture inquiry in Parliament last month – and failed to respond to detailed questions from amaBhungane about his conduct.
As we shall see, the parliamentary inquiry – plus new evidence obtained from former Prasa chief executive Lucky Montana – has confirmed and fleshed out further meetings between Martins and the Guptas reported by amaBhungane in 2016.
READ: Guptas' R51bn train grab
Meanwhile, the Guptas were pursuing a parallel strategy with Transnet, where many of the same train-builders bidding for the Prasa contract, such as CSR and Bombardier, were also competing for Transnet tenders.
Transnet tracks cleared
Over at Transnet, the Guptas already had sympathetic people in place. The jury is still out on just how tight was the embrace between the Guptas and their friend Malusi Gigaba, now home affairs minister. In November 2010, then president Jacob Zuma gave him his first full ministerial portfolio: that of public enterprises, which controlled most of the large state companies.
Recall that Zuma fired Barbara Hogan and installed Gigaba after she resisted pressure to meet with India's Jet Airways, on whose behalf the Guptas were lobbying for access to South African Airways' Mumbai route.
Recall also that former public enterprises chair Vytjie Mentor alleges she refused a Gupta offer to be made minister on condition SAA drops the India route in favour of Jet Airways.
Whether Gigaba was more pliable, or just so vain that he was easy to manipulate, is one of the many questions that Deputy Chief Justice Raymond Zondo's state capture inquiry will have to tackle.
Gigaba has always maintained that the "cordial relationship" he enjoyed with Ajay Gupta never influenced how he discharged his duties. A month after taking office, Gigaba installed a new Transnet board. Its members included Sharma, a former trade and industry official, who was then an acknowledged friend of the family and also in business with Essa.
Gigaba appointed Mafika Mkwanazi as Transnet chair, a man who was experienced, having served as chief executive from 2000 to 2003, but who also admitted to having a personal relationship with the Gupta brothers.
Half a year later, Gibaga reportedly tried to elevate Sharma to the position of board chair, only to have it vetoed by his Cabinet colleagues. But in 2012, Sharma was made chair of the powerful board acquisitions and disposals committee, which decided on large procurements.
Gigaba also appointed Brian Molefe as Transnet chief executive and confirmed the permanent appointment of long-acting chief financial officer Anoj Singh. Both men's links to the Guptas were later exposed.
By August 2012, Sharma, Molefe and Singh were in control of Transnet's Market Demand Strategy, a R300 billion plan to buy rolling stock and upgrade infrastructure.
The 95 loco tender
In late 2011 Transnet issued a tender for 95 electric locomotives for its general freight business. Bids closed on February 28, 2012.
For what happened next, we are reliant mostly on a single witness, a South African businessman who became the empowerment partner for one of the bidders, Canada's Bombardier Transportation.
The businessman is well known to those involved, but has asked us not to disclose his name to protect his other businesses.
Mr X says they submitted a tender, which was very competitive.
He alleges that after the first round of assessment, the Bombardier consortium was 20 points ahead of CSR. He does not explain how they knew this, but bidders for such large procurement projects generally have good intelligence about the bidding process.
Then bidders were asked to do a presentation, something that was not provided for in the initial tender specifications, according to Mr X.
He suspects the Chinese had been given access to the Bombardier consortium file – and were able to study it and close the gap at the presentation.
According to a senior Transnet manager, some Transnet engineers also gained the impression that information was leaking to the Chinese, represented by a CSR subsidiary, CSR Zhuzhou Electric Locomotive Company (CSR-ZELC).
Certainly, there seems to have been some manipulation around the terms of the adjudication.
On August 21, 2012, Sharma chaired his first acquisitions and disposals committee meeting. On the agenda: a briefing by management – presumably including Molefe and Singh, who attended – on the evaluation of a tender for 95 electric locomotives.
According to the minutes: "Management informed the committee that Option B [CSR] was recommended as the supplier can deliver in 2014, whereas other bidders can only deliver 18 months from the appointment date.
"The total cost of ownership did not take into account the delivery date. By the time the other bidders deliver, the Company would have earned revenue. Going forward the Company should ensure that the RFP [the tender document] takes into account the total cost of ownership inclusive of the delivery schedule.”
The committee approved other retrospective changes to the bid criteria.
This suggests the committee, which Sharma chaired, approved changes to the scoring criteria and the way locomotive "cost" was calculated – both of which seem to have altered the result in CSR's favour.
They gave Molefe the authority to contract with CSR pending final negotiations for a "maximum tender value of R2.5 billion excluding hedging costs".
On August 29, the Transnet main board approved a similar resolution.
Softening them up: the Guptas apply pressure
Less than three weeks later, on Monday, September 17, 2012, Mr X landed in Frankfurt to attend InnoTrans, the huge railway exhibition that takes place every two years in Berlin, Germany.
On about September 19, he broke away from InnoTrans to see his Bombardier principal in Zurich, Switzerland, where Bombardier has its global centre for locomotives.
While overseas, Mr X received a call from a business associate, Mr Y, who has also asked not to be identified.
Mr Y told us he was previously introduced to Essa, the Guptas' right-hand man – and, via Essa, also to Sharma.
Mr Y told Mr X that Essa had indicated an interest in partnering with Bombardier; that he was in Zurich and would like to meet.
Mr X agreed to the meeting, together with his principal, Chris Antonopoulos, then group vice president for sales and business development at Bombardier Transportation, a very senior position.
According to Mr X, they met at a Zurich hotel and present were himself, Antonopoulos, Essa and Sharma.
Mr X alleges Essa and Sharma proceeded to tell Antonopoulos that Mr X might be a fine guy but he would not deliver for Bombardier. They told the meeting that they had ensured that Bombardier would fail on the Transnet 95 loco tender and that they gave it to the Chinese.
Mr X claims Essa and Sharma boasted that they controlled a R4 trillion budget at state-owned enterprises and the only one not yet in their net was Prasa.
They allegedly told Antonopoulos that in terms of Transnet's new bid for the 1 064 locomotives they could make Bombardier succeed, but the price was a 20% commission.
Mr X told us: "Chris nearly fell off his chair. He said: 'How do we pay 20%?' They said: 'One, our money doesn't get paid in SA, it gets paid in Dubai and Hong Kong and, two, don't you make aeroplanes?' Chris confirmed Bombardier was one company with one owner: Bombardier Aerospace was a division.
"They said, 'You can sell us a $60m jet for $5m and claim it was second hand'."
(The Guptas did purchase a new Bombardier Global 6000 in 2014 – at a discount – but Bombardier insists the price and discount were market-related.)
The meeting broke up and Mr X headed back to South Africa via Frankfurt with his ears still burning from the audacity of the approach. He did not keep it to himself.
Lucky goes ballistic
Someone else was also at InnoTrans: Prasa chief executive Lucky Montana.
On the weekend of September 15 and 15, 2012, Ben Martins, the new transport minister, had summoned Montana to a meeting.
In Montana's evidence to the parliamentary state capture inquiry earlier this year, he recalled the events: "On the eve of my departure [for InnoTrans], I was called by the Minister of Transport, Dikobe Ben Martins, who invited me to his ministerial house in Delphinus Street, Waterkloof Ridge in Pretoria.
"We were joined 30 minutes later by two gentlemen that the minister introduced to me. This was Duduzane Zuma and Rajesh 'Tony' Gupta... The Minister... informed me they had expressed an interest in the Prasa Rolling Stock Fleet Renewal Programme. I did not know or previously met Duduzane Zuma and Tony Gupta.
"I indicated to them that I was travelling abroad but would be keen to listen to what they had to offer on my return...
"When I got to Berlin, I was approached by representatives of rolling stock manufacturers who made the claim that indicated they were approached by representatives of the Gupta family. The Guptas were extorting money from manufacturers and had wanted this money paid into some account in Dubai and stated they were working for President JG Zuma, Minister Ben Martins and Lucky Montana.
"The manufacturers were apparently 'summoned' to come to Zurich, Switzerland to attend a meeting chaired by one Salim Essa. It was at this meeting that they were instructed to pay monies if they wanted to get a share of the Prasa new-build programme. I was so furious with this. I could not comprehend this conduct other than to explain it as extortion."
Montana also recorded his impressions in a letter to his board chair the next month, October 2012, providing a contemporary account.
Montana recently confirmed to amaBhungane that Mr X was among those who later briefed him about what had happened to him in Zurich, where, according to Montana, there seemed to have been a series of meetings with more than one manufacturer.
Montana also identified David Anglin, Bombardier Transportation's head of sales for Sub-Saharan Africa, as one of those present in Berlin when Bombardier complained to him about the Guptas.
Montana told Parliament he was so angry, he called Martins from Germany and told him to convene another meeting with Duduzane and Tony Gupta. This took place on the weekend of September 22 and 23.
Montana said in his written submission: "I went to the house of the minister in Pretoria. Duduzane Zuma, Rajesh Gupta and a third gentlemen [sic] from India whom I can’t remember his full name, arrived at the house.
"At the meeting, I spoke at length and condemned their conduct... We had a big fight... and they even suggested that I could work with them and get my money in Dubai as well. I made it clear that what they were doing was unlawful and that they could not collect monies in our names.
"They were arrogant and reminded Martins that they did not want me but he had convinced them that I was his comrade. After an hour of fighting, they ultimately relented but, after they had accused me of favouring Bombadier over other companies. I rejected the accusation very strongly.
"Rajesh Gupta indicated that the third gentleman will be responsible for coordinating their relationship with China South Rail and will contact me when they have issues... later, the man called and met with me at the Park Hyatt Hotel where he brought the CV of Salim Essa and Iqbal Sharma, demanding the two be appointed to the Bid Evaluation Committee (BEC) for the [Prasa] rolling stock tender. I rejected this. They went to complain to the Minister that I was still not cooperating."
This evidence about the "third gentleman" provides important corroboration for Montana's version. After his evidence in Parliament, we showed Montana a picture of Piyoosh Goyal. Montana confirmed this was the unidentified Indian gentlemen who were the nominated go-between for the Guptas and CSR.
Previous amaBhungane reports show that companies linked to Goyal were the first vehicle for the payment and laundry of a 20% kickback on deals reached by CSR in South Africa.
And the #GuptaLeaks confirm that the Guptas were expecting Goyal to land in Johannesburg on 22 September 2012, shortly before he allegedly pitched up at Montana's meeting with Martins, Duduzane Zuma and Tony Gupta.
They also show that as early as January 2012, the head of CSR's South Africa project, Pan "Alton" Wang was forwarding his correspondence with Brian Molefe at Transnet to a director at Goyal's World's Window group, from where his emails were apparently forwarded to Goyal and the Guptas.
Montana's credibility has been attacked in relation to other Prasa contracts concluded under his watch, but so far the R51 billion Metrorail tender the Guptas were targeting – which eventually went to French multinational Alstom – remains largely untainted.
Whatever his other sins, Montana appears to have pushed back hard against the Guptas.
It is worth stepping back and reviewing the extraordinary scope of the allegations set out by Mr X and Montana – and the response of those implicated, including the gaping silence or dissembling offered by most of them.
Iqbal Sharma, to his credit, offered a straight disavowal.
He told us: "It is well known that I was well acquainted with the Gupta family. I also explored many different business opportunities in a range of areas and therefore had regular contact with them. It is also a fact that Salim Essa and I were friends and business partners and that he met the Guptas through me, however … we parted ways when he decided that he did not want to continue in our business activities and preferred to go into business with Duduzane Zuma.
"I did not attend any meetings in Zurich or South Africa with any manufacturer and have never solicited any form of bribe for any transaction."
This directly contradicts Mr X, who claims there was a follow-up meeting with Sharma, Essa, Antonopoulos and himself at the African Pride hotel at Melrose Arch, Johannesburg, on about 25 September 2012.
By this time, Montana had upbraided the Guptas at minister Martins' house.
Mr X claims the family was aware he had spoken to Montana and at the Melrose meeting their displeasure was conveyed to him. Mr X says this was the last time he met Essa and Sharma.
We have reviewed evidence of Sharma and Essa's travels. This does not show them to have been abroad during the period September 17 to 23, 2012, the week of InnoTrans and the alleged Zurich meetings.
However, there are instances where the travel records are incomplete because they do not show travel abroad when other evidence shows Sharma or Essa to have been outside the country.
The #GuptaLeaks and the travel evidence shows Sharma and Essa were certainly closely aligned at the time, even if they parted ways later as Sharma states.
The evidence suggests Sharma and Essa travelled together about 10 times between May 2012 and December 2013.
In addition, #GuptaLeaks electronic diary entries show Sharma and Essa were scheduled to meet together with Tony Gupta in South Africa at least three times during this period and Sharma was booked to meet on his own with Tony a further 13 times.
On December 19, 2013, the #GuptaLeaks show that Gupta company Aerohaven paid R20 000 000 to Sharma. It was styled as a loan to finance his portion of the purchase of VR Laser, the steel cutting company that was to be the Gupta's entry point to the armoured vehicle business in South Africa and India.
Indeed it was amaBhungane's expose of his involvement in VR Laser in June 2014 that appeared to torpedo his relationship with the Guptas and Transnet.
Essa did not respond to emailed questions.
Antonopoulos, who left Bombardier in 2014, did not respond to detailed allegations sent to him via WhatsApp. He is now the CEO of Swiss-based renewable energy company Lekela Power, which currently has five wind-power projects on the go in South Africa.
Bombardier told amaBhungane on February 2: "To date, we have been unable to ascertain through our records if a meeting of the type you describe ever took place. That's why we are not in a position to comment at this point on some particular allegations made to you directly or indirectly until we have reasonable time to review."
On February 8, amaBhungane sent follow-up queries to Bombardier, pointing out that it was highly unlikely that there was no correspondence or internal knowledge about allegations of "extortion" happening under the nose of one of their most senior executives and involving two of the most lucrative train deals anywhere in the world at the time.
We put to them what Montana told us: "The main source of the information I received at InnoTrans in 2012 was Bombardier. They seem to be backtracking now. The conduct of the Guptas and their associates was known to the entire industry at the time..."
To date, they have not responded.
In their earlier response, they offered rote assurances about Bombardier's "zero tolerance for unethical or improper behaviour" and rejected any suggestion that the Guptas were provided with any favours in regard to their 2014 purchase of a Bombardier Global 6000 executive jet.
"Whatever the underlying motives behind these allegations, there is simply no connection between the Global 6000 transaction and the locomotive transaction you reference... As you could confirm, the price that has publicly circulated regarding this Global 6000 jet transaction was well within a normal price range during that year for this kind of business jet."
That claim may be true, but it is diluted somewhat by the fact that Export Development Canada, the lending agency that works in concert with Bombardier to push its products, cannot find the Gupta jet it financed – and is struggling to get its money back.
Back to Transnet
There was one more strange diversion for the 95 loco contract.
Although the Transnet board had given the go-ahead at the end of August 2012 to conclude the contract with CSR, there was suddenly a stall in the process.
The events are recorded in an official Chinese language article about the locomotive deals which quoted project leader Pan Wang.
"In September 2012, CSR ZELC has been told to wait for 2 weeks... After 2 weeks, we didn't get any news. They said they still in analyzing when we called. The project seems blocked," Wang said.
"And we suddenly received a letter from Transnet at the end of September saying that the CEO wanted to come to Zhuzhou. The enterprise began to prepare seriously and make a detailed schedule for their visit...
"The CEO of Transnet... came to Zhuzhou and visited for half day. After listening to the report from the [technical] team, the CEO said, ‘Welcome to sign contract next week in South-Africa, we fully believe in you after our evaluation...’
"The surprise comes all at once for CSR ZELC... We were anxious to wait for one month without any news, but now we can sign contract just after half-day visit."
Evidence shows Transnet chief executive Brian Molefe flew to Hong Kong on October 9, 2012, returning on October. 16. The 95 contract was signed on October 22.
Transnet engineers believed they had got their locomotives at a good price at just over R28.2 million per engine (for a total contract value of R2 686 600 000) – a price that would be dwarfed by CSR's later successes with the 100 loco tender, where Transnet paid about R44 million per locomotive, and the 1 064, where Transnet paid about R50 million per locomotive.
But the spreadsheet buried in the #GuptaLeaks shows CSR contracted to pay a 20% commission even on this first deal – amounting to about R537 million.
The flows started with a December 29, 2012, payment of $5 932 935 (R50 million then), only two months after Transnet had signed the 95 loco contract.
Marked "CSR Loccomotive [sic]", the payment was recorded in a separate #GuptaLeaks spreadsheet as having gone to Century General Trading, an Emirati scrap metal trader associated with Worlds Window, the Indian group founded by Piyoosh Goyal.
Molefe told us: "I have no knowledge of the alleged kickbacks. I have no knowledge of the manipulation of adjudication processes. I have never met or had heard of Piyoosh Goyal. We did visit China (and other countries) to satisfy ourselves that the manufacturing facilities and capabilities do exist beyond what we saw on paper."
* Watch out for The great train robbery Part 2 - the great switcheroo
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