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Wednesday, June 29, 2022

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SA lost around R73bn to state capture by Guptas

The Gupta brothers, Ajay and Atul, presided over a criminal network that siphoned off more than R73 billion from the government. File image.

The Gupta brothers, Ajay and Atul, presided over a criminal network that siphoned off more than R73 billion from the government. File image.

Published Jun 23, 2022

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Johannesburg - The controversial fugitive Gupta family and their related companies siphoned off almost R73 billion from the government through state capture and this may not even be the full amount.

Chief Justice Raymond Zondo revealed the figures in the last part of the final report of the commission of inquiry into state capture, which he chaired for the past four and a half years.

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”The amounts set out above do not represent the full loss by the state as a result of the Gupta enterprise-related state capture,” the report reads.

According to Justice Zondo, about R57.3bn is the aggregate amount of total payments made to contractors in contracts with the state in which the Gupta enterprise was involved in state capture activities.

He found that a second amount of more than R15.5bn is the aggregate amount of total payments to the Gupta enterprise made by the state itself or to contractors which had contracts with the government in which the Guptas were involved.

Justice Zondo uncovered that the amounts included kickbacks paid to the Guptas by third party contractors doing business with the government in cases where no open and honest competitive procurement processes were undertaken.

”The direct kickbacks aggregated to R7.3bn and the indirect kickbacks aggregated to R920 million. So, the known value of kickbacks was R8.15bn,” he added.

Another type of amount was gratuitous expenditure incurred with little motivation other than ensuring the enrichment of the Guptas.

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”The Gupta enterprise state capture created a culture of corruption and indifference to cost in many state-owned enterprises and government departments.

“There is reason to believe that third party contractors who were protected by their relationship with the Gupta enterprise exploited this culture to charge the state excess amounts even beyond those necessary to recover the cost of the kickbacks they were paying to the Gupta enterprise,” the report explained.

Justice Zondo said his report didn’t purport to quantify the total loss suffered by the state as a result of Gupta-related state capture.

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He believes that it can safely be predicted that this amount is in excess of the more than R15.5bn that was paid directly or indirectly from public funds to entities forming part of the Gupta enterprise.

The Saturday Star

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