The Gupta Empire: Top ANC members speak out
With fractured race relations setting the country aflame this week, ANC leaders are worried that the prominent influence and reported enrichment of the Gupta family can inflame anti-Indian opinion. And a second grouping leading the political argument against President Jacob Zuma’s close association with the family fears a return to “pre-Polokwane” practices.
“You cannot have a president made by a small group of businessmen like (former President Thabo) Mbeki,” said a member of the ANC national working committee.
Yesterday, government sought to stamp out the Gupta story by cautioning the media from asking Cabinet members if they had visited the family’s Johannesburg home – which one government adviser alleged rivals the party’s Luthuli House as a centre of decision-making.
A Gauteng ANC thought-leader said the first wave of Indian immigrants were indentured labourers while a second wave were merchants. The post-apartheid era had brought a third wave of sophisticated and monied immigrants who were benefiting from South Africa’s globalised economy and access to diplomatic links. This wave was symbolised by the Guptas.
“The way the third wave is behaving, the national question (the ANC’s skilful management of race relations) is in grave danger. The danger is that Indian people’s contribution to the struggle will be endangered,” he said. Three Indian ANC senior leaders who hold elected and party positions agree.
The recession, as well as the end of Mbeki’s presidency, has meant that BEE has lost its political support and that the flow of deals has virtually dried up. Black business feels excluded and is relaying the message to its political supporters.
“You have to be careful,” warned a former member of the ANC, who disagrees that the Gupta factor imperils race relations. “It’s easy to whip up anti-Indian backlash. But why are they not complaining about Walmart (the US retailer about to take over Massmart)?”
The Guptas and BEE
The Gupta family says it has never benefited from BEE but has, in fact, been a sponsor of BEE deals. Neither does it have a portfolio of big tenders.
According to them, their business interests lie in mining, infrastructure and publishing where the state’s role is important either through licensing, diplomatic links or advertising.
The family is ace at building relationships with politicians and parlaying that influence for long-term growth.
When asked if the apocryphal tale that he had the president on speed dial was true, Ajay Gupta offered us his BlackBerry to check. We didn’t. But from a three-hour interview this week, it’s clear they have a network that must be the envy of most other South African businesses.
The family provided the photographs on this page to show that since their arrival in South Africa in 1993, they have always been politically popular and that their star did not rise with Zuma’s appointment as ANC president in 2007.
The view that Zuma is facing a political battle disguised as an anti-Gupta lobby was repeated several times by Cabinet members who believe the family factor is “overblown” by losing bidders, losing appointees and by business rivals.
An ANC revolt?
The Sunday Times reported last week that the president faced an ANC revolt about the influence of the family which, it said, had inside knowledge of party decisions and debates. “It plays into the myth of the president (and the influence of the) Indian businessman,” said a minister. Zuma has high-profile relationships with Schabir Shaik, Vivian Reddy and the Guptas.
ANC members as well as labour federation Cosatu have, over the past fortnight, also reportedly raised concerns that Zuma is not consulting sufficiently on appointments like that of Brian Molefe as CEO of Transnet and that of Lazarus Zim as Telkom chairperson.
Zim is a business partner of the Gupta family while Molefe is an associate. The post-Polokwane era also promised the alliance leaders far greater leverage on deployments.
And now they feel left out. “It’s a backlash from constituencies that lost out,” the minister said, adding that reputations were always being besmirched in the new politics of the ANC.
“Molefe was first said to be a Cope member, then he was Trevor Manuel’s boy (Molefe worked at the treasury). Now he’s a Gupta boy.”
But a national working committee member said it was not a race issue. “It’s not an Indian thing, it’s the re-emergence of a trend we defeated in Polokwane.
Beware a new kitchen cabinet
Under Mbeki, there were a select few getting deals because of access to the president. “Saki Macozoma (former ANC NEC member and business luminary); Bulelani (Ngcuka, former prosecutions head and later prominent businessman); and Smuts (Ngonyama, former head of the Presidency at the ANC and a businessman) all benefited from Mbeki,” he said.
These men, said the leader, had political as well as business power. One of them had allegedly scuppered the appointment of Ngoako Ramatlhodi as successor to Ngcuka. ANC members do not want a return to a political culture where decisions were made by a kitchen cabinet of favoured elites.
“ANC members are moaning and groaning. This thing is going to explode,” said an official at Luthuli House.
An NEC member added that ANC leadership had never meant family enrichment. “(Former President Nelson) Mandela set a good example. He didn’t give his family business. (Now) you go to China and talk about infrastructure and the next thing your family benefits. What does that say to the public?” This week, the Gupta schism in the governing party exploded publicly.
The MK Military Veterans Association shot down ANC Youth League president Julius Malema for making an allegedly covert critique of the Gupta family and its associations with Duduzane Zuma. The veterans denied they were acting out of self-interest because they are the Gupta’s chosen BEE partners.
The veteran association’s chairperson Kebby Maphatsoe said they supported Zuma as a former soldier. He said the current row was started by people who wanted to “make the president unpopular” ahead of the party’s elective conference next year.
Responding to reports that ministers were called by the Guptas, Maphatsoe said: “Ministers know where the centre lies – in the ANC and in government. If I’m appointed a minister I cannot be summoned by anyone except the president.”
» End note: City Press practice is not to rely solely on anonymous sources. But for Maphatsoe, no sources would speak on the record. We interviewed 12 people, drawn from multiple levels of ANC leadership