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Moves afoot to freeze Gupta-linked assets
By Agency Staff	 16 January 2018 No Comments
South African prosecutors have moved to freeze R1.6bn of assets held by McKinsey & Co and a company linked to the Guptas, the first significant response to corruption allegations against the politically connected family.
McKinsey earned about R1bn in consultancy fees from Eskom in 2016, but has since pledged to pay it back after being drawn into allegations the Guptas used their friendship with President Jacob Zuma to win lucrative government contracts.
Trillian Capital Partners, in which a Gupta family associate is a former shareholder, received cash from power provider Eskom at about the same time as McKinsey. The Guptas and Zuma have denied wrongdoing.
We are investigating a number of cases related to the issue of state capture, some of which have passed their stage-one levels
The National Prosecuting Authority's move comes during a South African parliamentary corruption inquiry into contracts awarded by Eskom.
"We have received no formal communication," McKinsey said in a statement late on Monday. "As we have said before, including before the parliamentary inquiry, we will return the fee we earned from the Eskom turnaround programme no matter what. We welcome any efforts to help us pay back the money."
Revelations about the Guptas in a series of leaked e-mails last year have turned the family's business dealings into South Africa's biggest post-apartheid scandal.
McKinsey said in October it had "made several errors of judgment" while working on a turnaround plan for Eskom, though the US firm said it didn't make payments to Trillian nor have a contract with the Gupta-linked company.
The US consultant suspended work for state entities, while companies including Coca-Cola's South African units aren't awarding it new business.
Warrant of arrest
South African police unit the Hawks have a warrant for the arrest of at least one of the three Gupta brothers, City Press reported on Monday, citing a senior official it didn't identify. The Hawks are now waiting for the NPA to sign off on the warrant, the news service said.
"We have not applied for an arrest warrant against any member of the Gupta family," Hawks spokesman Brigadier Hangwani Mulaudzi said by phone from Johannesburg. "We are investigating a number of cases related to the issue of state capture, some of which have passed their stage-one levels, and we are awaiting direction from the National Prosecuting Authority."
Ajay Gupta didn't immediately respond to a phone call and text message seeking comment.
The NPA's Asset Forfeiture Unit first obtained the order to freeze McKinsey and Trillian assets on 14 December, the prosecuting authority said. The two companies will have 90 days to show their contracts with various state-owned entities were lawfully awarded.
A spokesman for Trillian said he couldn't immediately comment. — Reported by Arabile Gumede and Renee Bonorchis, with assistance from Janice Kew, Paul Burkhardt and Paul Vecchiatto, (c) 2018 Bloomberg LP
Eskom Jacob Zuma McKinsey Trillian Trillian Capital Partners
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