How Gordhan thwarted Gupta arms dealing plans

Ousted Finance Minister Pravin Gordhan and officials at treasury were the only stumbling block between a sweet deal for the Guptas trying their hand at arms dealing.

After about a year of head-butting between treasury and Denel, the state-owned arms manufacturer filed an application on March 23 asking the court to legalise their contentious Gupta-linked venture Denel Asia.

This move came as Gordhan prepared for two other court cases against the Guptas while being publicly peppered by Gupta company Oakbay’s PR machine.

“There is a desperation and urgency we pick up from the Guptas that is astounding and worrying,” a well-placed treasury official said hours before Gordhan got axed.

Alleged Gupta lieutenant Salim Essa registered Denel Asia in Hong Kong on January 29 2016. It was set up as a joint venture between Denel and the Gupta-linked company VR Laser Asia, also controlled by Essa.

The venture was labelled “illegal” by Gordhan because adequate procedures weren’t followed. Amid speculation that the Guptas captured the new Denel board, Gordhan described them as “arrogant and belligerent”.

Denel needed his approval to operate Denel Asia legally in order for the arms manufacturer and the Guptas to bag millions of rands by selling arms to the booming Asian market.

Newly appointed finance minister Malusi Gigaba will find this contentious problem on his table.

Despite Denel’s inextricable involvement with the Guptas, its acting chief executive, Zwelakhe Ntshepe, has attempted to distance Denel from the Guptas.

The curious case of Denel, the Guptas and the Oppenheimers’ luxury airport terminal is perhaps the clearest indication that Gigaba may not be impartial.

The overarching story is about so-called white monopoly capital (WMC) that saw a gap to make more money. Now the same WMC accuses the Guptas in court proceedings of trying to oust them, ostensibly hijacking the Oppenheimer project.

Gigaba’s odd role in this power clash between two of the richest families in the country is highlighted in the approval process.

The Oppenheimer aviation company, Fireblade, initiated proceedings in August 2012. Since then they jumped through several hoops to gain permission from more than 17 government departments to allow foreign guests to land at their international terminal. 

The approval was at such an advanced stage that government departments, including Gigaba’s home affairs, designed the terminal to be built and added requirements that included an Ebola scanner and medical equipment.

Minutes of a meeting on January 28 show Gigaba told Nicky Oppenheimer and two Fireblade representatives he’d signed off on a letter of approval for their facility. 

Four senior home affairs officials, including Gigaba’s acting chief of staff , also attended the meeting.

But on October 27 Gigaba unexpectedly refused the application, blaming mostly security concerns raised by Denel. The new Denel board has on several occasions been accused of being Gupta-aligned.

A paper trail dating back three years claims to show that the Oppenheimers had addressed all Denel’s security concerns.

The Oppenheimers also accused the Guptas of trying to hijack their project, detailing conversations with two unnamed Gupta pilots.

Gigaba vehemently denied having approved the application for Fireblade’s luxury facility and accused the Oppenheimer family of casting a “negative aspersion” on his integrity. He labelled the allegations “borderline racist” and said the names of the Guptas were used for convenience.

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Pauli van Wyk
Pauli van Wyk is a Scorpio investigative journalist. She writes about the justice cluster, state-owned companies, state politics and the inescapable collision course they're on. Pauli cut her teeth at Media24. She became a journo at Beeld, was trained by the amaBhungane Centre for Investigative Journalism and joined Mail & Guardian's investigative team before becoming a member of Scorpio.

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