Battered Bain feels the heat

South Africa’s Department of Justice & Correctional Services is hoping the Gupta brothers – who have been implicated in state capture which plunged the country into an unprecedented crisis – will appear in court by the end of this month or the first week of November. Legalbrief reports that Rajesh and Atul Gupta were arrested in Dubai in June after fleeing the country amid investigations by the Judicial Commission of Inquiry into Allegations of State Capture. They were identified as the kingpins of corruption and fraud that hollowed out vital state insitutions. City Press reports that SA's National Prosecuting Authority says it has complied with the laws of the UAE to kick-start the process of getting the fugitives brought back to SA. The final documentation was submitted two weeks ago, when a delegation led by the department’s DG visited the country to finalise the process.

The development coincides with news that consultancy Bain, which has also been linked to state capture and barred from doing government business in SA for 10 years, has acknowledged that one of its partners met a member of the Gupta family in Dubai to discuss building a medical hub. A Fin24 report reveals the meeting in January 2016 was attended by a top director of Bain's Indian office, as well as Tony Gupta, Salim Essa and Indian national Sunil Sachdeva, the co-founder of hospital group Medanta. Sachdeva is known to have been involved with the Gupta family in a company called Cureva, which became embroiled in a tender scandal in SA for mobile health units. Details of the meeting come from the GuptaLeaks, a cache of emails leaked from inside the business empire of the Guptas. UK legislator Lord Peter Hain, a prominent critic of Bain, said he had not been aware of any meetings between Bain and the members of the Gupta family. ‘This has an unpleasant smell about it,’ he is quoted as saying.

Bain, which has urged SA’s financial authorities to overturn a ban that prevents it from doing business with the state, has come under considerable fire from a graft-weary nation that has its claws out for state capture rogues scattered around the world. The ban came soon after the UK barred Bain from public contracts for three years because of allegations related to SARS. Both the Zondo Commission and another inquiry headed by retired Judge Robert Nugent recommended that the international firm be investigated by relevant law enforcement authorities. While Bain said it accepted there must be consequences for its mistakes, singling out an individual company based on unproven allegations and without due process is ‘concerning,’ it said in a statement received by Legalbrief. ‘We believe that the decision to restrict Bain SA is fundamentally flawed,’ it said. The company added that it would continue to welcome and encourage any opportunity for us ‘to engage with SARS and National Treasury and discuss a potential path forward’. Fin24 reports that Bain, which has initiated legal action to overturn the UK ban, last week said it has been singled out based on ‘unproven allegations and without due process’. EWN reports that Bain did not say whether it would take legal action to overturn the ban. It has asked Treasury and SARS to overturn the ban and arrange a meeting to ‘discuss a potential path forward’.

In a hard-hitting interview on the Money Show last week, the company's managing partner in SA, Stephen York, said its own investigation found that there was no evidence of fraud or corruption on its part. ‘Let me start by saying we deeply regret the mistakes we made leading up to and including our work at SARS between 2015 and 2017. We've acknowledged those mistakes and we've apologised publicly on multiple occasions now. We also accept that there must be consequences for these mistakes – we're not trying to shy away from that. I also fully recognise and support government's responsibility in holding companies to account for the role that Bain has played in state capture.’ However, York added the rejoinder that Bain cannot accept ‘jurisdiction that singles out one individual company’. It also cannot accept action that is based on what the firm claims are ‘alleged fraud and corrupt practices that have not been proven’.

But Bruce Whitfield was having none of it. He noted that Bain has never made its internally commissioned report available for public scrutiny. When York argued that ‘the actual factual findings have been released and they can be found on our website,’ Whitfield objected: ‘You can’t pick and choose which bits you do (release). Unfortunately, what that does is it creates an impression that you are cherry picking. If you publish the report in its entirety to the extent that it exonerates you, then surely that would clear your name. You don’t know the truth. The damage done in the name of this business is deep and vast.’