Ensure Gupta asset sales above-board: SACP

File photo: Reuters/Siphiwe Sibeko

File photo: Reuters/Siphiwe Sibeko

Published Aug 28, 2016

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Ekurhuleni - The South African Communist Part on Sunday called on the Financial Intelligence Centre to ensure that if any sales of the politically-connected Gupta family's South African shareholdings are effected, the Gupta family itself or close relatives are not the beneficial owners of the sale.

In a statement issued after the SACP central committee (CC) meeting in Ekurhuleni, Gauteng, this weekend, the SACP said it had noted Saturday's announcement that the Gupta family intended to sell off all its assets in South Africa by the end of the year to certain unspecified international interests.

“Ostensibly this is for the benefit of South Africa and to save local jobs. Frankly, we treat this announcement with a great deal of skepticism. It comes at a time when Gupta companies are reportedly under increasing scrutiny from the [South African] Reserve Bank, [National] Treasury, and the Financial Intelligence Centre,” the SACP said.

The announcement that the sale would be completed before the end of the year happened to coincide precisely with the 2017 date for the multi-lateral, international Automatic Exchange of Information (AEI) agreement coming into operation. The agreement provided for the automatic exchange of non-resident financial account information with the tax authorities in the account holder's country of residence. This would facilitate the discovery of formerly undetected tax evasion by way of illicit flows into foreign bank accounts.

The AEI would provide South African authorities with much greater insight into the foreign bank accounts of South African residents.

“Given the over-valued and under-traded nature of Gupta-linked JSE [Johannesburg Stock Exchange] interests, we doubt that there will be much appetite for purchasing them. There is a strong possibility that the Guptas simply intend to sell their South African interests to themselves through their foreign-based investment venture capital operations.

“We call on the Financial Intelligence Centre to satisfy itself that if any sales are effected, the Gupta family or close relatives are not the beneficial owners of the sale. We trust that the Reserve Bank, before approving any sale from a resident to a non-resident, will ensure that there is full legal compliance with capital export requirements.

“We also believe that our financial regulatory entities should ensure that money is retained in South Africa in a blocked account so that any potential penalties and liabilities are covered should further information emerge in regard to the wrecking-ball activities of the Guptas and their associates,” the SACP said.

African News Agency

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