- This “shadow bank” fed state capture laundries – wittingly or unwittingly.
- The Guptas used existing networks to launder their ill-gotten gains – and thereby gave us insight into a whole underground financial network.
- AmaBhungane has re-traced the path trodden by the Zondo Commission – and discovered new tributaries of the great South African river of dirty cash.
- For more financial news, go to the News24 Business front page.
Recap: In our previous instalments, we delved into RENS Kontant in Transito – one of the cash-in-transit companies seemingly acting as a conduit for moving funds for a broad and exotic clientele. Looking even deeper, we managed to find what may have been a previously unknown route for the dissipation of state capture loot.
The Gupta family and the sprawling network of fixers that coalesced around them did South Africa one favour.
The work of laundering the proceeds of state capture has led to the exposure of vast swathes of the clandestine money-moving industry, generating leads that amaBhungane has now been able to follow to the door of many under-the-radar operators.
Among them is the cash-in-transit “shadow bank” we delved into in the previous instalment of our #Laundry series: RENS Kontant in Transito, run by mother-and-son team Christo and Jacoba “Kotie” Janse van Rensburg.
We’ve already seen how some alleged local and international crooks managed to move billions through its accounts, although RENS’ attorneys have assured us that the company “at no stage willfully or knowingly engaged in any illegal or nefarious conduct”.
Nevertheless, hidden against the background of billions moving through RENS there are smaller payments, totalling just shy of R100 million, to a telling set of entities: companies identified in research submitted to the Zondo Commission by ShadowWorld researcher Paul Holden as conduits for money skimmed from a number of major government contracts.
And behind all these payments sits one large RENS client – a broker that according to RENS’ bank statements seemingly organised hundreds of millions of rands in cash pickups followed by electronic payments to a diverse range of nominated accounts.
A caveat is necessary up front: the companies that would have instructed RENS to move state capture money are known to have moved funds for other clients as well, whether legitimate or illegitimate. That means that the flows we have identified going through RENS may not necessarily be “Gupta money”.
However, circumstantial evidence, specifically the timing of payments, suggests that RENS may in fact also have been used for the state capture project, wittingly or unwittingly.
The trail does not stop there. Following the money brings us to the doors of other prolific South African operators in the underground financial services industry – and ultimately Hong Kong.
It all seemingly starts with a secretive Pretoria businessman.
Shell game
Its bank statements show RENS constantly making payments labelled “Airtime Connect” or, alternatively, “Tayfoor”.
Bank data shows how Tayfoor or “Airtime Connect” directed RENS to make payments totalling well over R2 billion between 2013 and 2018, which is where our data ends.
Our attempts to identify this steady RENS customer led us to Tayfoor Altamash, a Pretoria businessman who was at the time director of Alta Cash Management Services.
This identification derives from two independent sources, buttressed by the beneficiaries RENS paid on his behalf – which included related parties – as well as our efforts to track an email address assigned to “Airtime Connect” in RENS’ internal files.
Efforts by email, calls and messages to get Altamash to confirm or deny his involvement went unanswered.
The clients Altamash apparently directed payments to include a number of entities that have had run-ins with the authorities or have had their bank accounts seized by the Reserve Bank.
These clients also include flamboyant businessman Zunaid Moti, who received R102 million via four of his companies.
All of these payments coincided with what we previously reported as a giant money moving endeavour through various parallel channels, including suspicious loans to all of Moti’s property companies.
Moti told us that third parties used this RENS channel to carry out legitimate payments to him, but that he had nothing to do with these arrangements.
“I confirm that these payments were made to the relevant companies by RENS on behalf of a third party based on proper agreements and contractual basis. The payments received were made by arm’s length contracting parties who used the services of RENS for such purpose. I had no control over the payment process.
“I can confirm that at no time have I, or any Moti Group company, met with or concluded any transaction with RENS.
“Further, I can confirm that I have never met or interacted with Tayfoor Altamash, and that neither I nor any Moti Group company have any involvement or relationship with him.”
Taken at face value, this would make Altamash simply a broker for other unknown players, including legitimate clients.
State capture
The first clue that something is seriously awry with this broker’s use of RENS’ services, however, is a burst of payments made back in January 2014 to an entity named Chivita Trading – around R29.9 million in total.
Those who closely followed the Zondo Commission will recognise this name.
Chivita was identified as one of many fronts used to dissipate millions of rands skimmed from state contracts. The commission’s final report tied Chivita to Salim Essa, often referred to as a Gupta “lieutenant”, who brokered huge so-called introduction fees for companies scoring large contracts with state-owned companies.
Chivita made roughly R140 million this way, principally by taking a cut of contracts between Transnet and notorious consultancy, Regiments.
This evidence was set out in an extensive study of the Gupta money laundering machinery prepared and submitted to the Zondo Commission by Holden, who also testified.
According to Holden, Chivita also had other sources of income. Among them, we can now reveal, was RENS, which paid Chivita the aforementioned R29.9 million in January 2014.
This was right in the middle of the period in which Chivita was also receiving regular payments from Regiments.
These RENS payments followed conspicuously large and rounded physical cash deposits into one RENS account that would immediately get transferred to another RENS account before being paid out to Chivita under the reference “sett Tayfoor”.
Since the deposits in question were all physical cash, it is impossible to determine the ultimate source of the money, which is potentially the point of the exercise.
According to Holden, Chivita had been receiving large amounts of money from many unknown quarters long before the start of what he terms the “Gupta Enterprise” around 2013.
“I believe that the most reasonable inference to draw is that the Gupta Enterprise came to know or be aware of this money laundering organisation by at least May 2013, and began directing state capture funds through this network. The Gupta Enterprise was thus piggybacking, as it were, on an existing criminal network.”
The payments we have found in the RENS records may very well represent other business carried out by the “existing criminal network”, but at the very least, the timing of payments raises questions about whether the cash-in-transit company may form part of the state capture story.
For one thing, Chivita was only a single node in a veritable thicket of coincidences.
Patterns
In fact, RENS made payments to a number of entities similarly implicated in state capture, always at the behest of Tayfoor/Airtime.
In addition to Chivita, these included Zokubyte Trading (R9.6 million), CMC Distributors (R14.5 million), Shazari Trading (R16.2 million), Birtusa Capital (R11.85 million), Schacob Commerce (R5.6 million), Coral General Traders (R4.5 million) and Samcom Technologies (R21.4 million). According to Zondo Commission evidence, each of these served the Gupta family and its associates in one way or another in evacuating the profits of state corruption.
Based on the above, the minimum amount we can trace paid from RENS to state capture-related money laundering entities is R92 million, although as we will show, the real figure could be higher.
To reiterate, while this does not definitively prove that the money we see leaving RENS to these entities can be linked to state capture, both the timing in relation to known state capture payments and the identities of the parties in question is suggestive of money flows researchers and investigators may have missed, and which could comprise additional channels for shifting misappropriated public funds.
Take Shazari, a company which Holden showed to be a pooling account for money from a variety of sources. Once pooled, part of this money made its way offshore and into the waiting arms of, among others, fronts in Hong Kong (more on that below).
The primary vehicle through which Shazari received state capture funds, at least in Holden’s analysis, was a company named Saamed Bullion, which was the pitstop for large amounts of cash derived from corrupt contracts – about R190 million that has been identified by Holden.
This money derived from portions of contracts between Regiments and its successor, Trillian Management Consulting, with Eskom and Transnet, as well as money from German software group SAP and SA Express contracts.
Saamed Bullion in turn paid about R23.5 million to Shazari, which ultimately sent money abroad to entities in Hong Kong.
Payments from RENS to Shazari conspicuously alternate with payments from Saamed Bullion to Shazari in a way that invites speculation that the two sets of payments are connected.
Specifically, these payments neatly alternate weekly with RENS’ payments to the same place. When we examine the ultimate destination of this money, which we will get to shortly, it becomes impossible to distinguish between the RENS money and the money known to originate from state capture profits.
But it is not just Shazari that shows this pattern.
Another conduit for state capture money laundering, according to Holden, was CMC Distributors, which likewise received cash from Saamed Bullion and paid it forward offshore. CMC was, however, also a multi-purpose “pool” for payments from all manner of sources.
Just as with Shazari, we now know that one of those sources was RENS, at the behest of Altamash. RENS was in fact the larger funder.
Similarly, another notable channel by which state capture funds left South Africa was Zokubyte, where RENS was again a funder alongside Saamed Bullion.
Our data shows that RENS paid R9.6 million to Zokubyte at the same time that Saamed Bullion was funding it.
Birtusa Capital was another entity identified by Holden as a conduit for state capture funds. It received just over R3 million derived from state contracts in April 2017, shortly after being registered.
In December of that year, however, Birtusa also received just shy of R12 million from RENS at Altamash’s behest. The fact that the timing does not overlap in this case makes it less reasonable to assume that this money also stemmed from the state capture project.
Samcom Technologies received a relatively paltry R365 000, at least that Holden could find, but it also received R21.4 million from RENS at roughly the same time in early 2017.
Lastly, Coral General Traders was exposed by journalists as yet another conduit for Gupta money, channelling payments at about the same time RENS sent money its way. Unfortunately we do not have dates for its receipt of the state capture money sent to it.
As we said at the outset, the fact that RENS (on Altamash’s instruction) made payments to the same entities used to launder state capture funds at the same time that they were receiving these state capture funds does not definitively prove that RENS’s payments can be linked to the theft of public funds, or that RENS had any direct knowledge in this regard.
The picture that emerges is of Altamash being, at minimum, another user of a network that state capturers also used, although potentially also playing a role in its functioning.
Saamed Bullion and beyond
We mentioned Saamed Bullion earlier – the company that funded all the same state capture-related entities RENS did.
Here there appears to be another link.
Saamed Bullion remained something of a mystery to the Zondo Commission. Its sole director, Sabbir Ahmed Ahmed, appears to have been a classic front – simultaneously a director of multiple money laundering entities used in the state capture enterprise. He could not be reached for comment.
Ahmed was also a director of one other company that never made it into the Zondo analysis: Savi Distributors.
Savi is, however, to be found in the books of RENS moving around R60 million to an array of customers who also got money from Altamash.
This reinforces the impression flagged by Holden in his state capture research that the Guptas and their entourage slotted into a larger pre-existing network of money laundering agents – in this case a network where Altamash – and potentially other clients of RENS – also played a role.
Onwards into the front factory
We have now seen how physical cash picked up by RENS was paid out to a set of entities who would later all be implicated in the laundering of state capture funds.
But what happens next?
The best clue comes from Shazari, the company that received the alternating payments from RENS and Saamed Bullion we described above.
Holden followed the subsequent money flow up to a point, and the rest of the story is filled in by two separate investigations conducted by the Reserve Bank, both of which have indicated the involvement of a number of prolific alleged underground financial operators.
First of all, who are the warm bodies behind Shazari Trading?
Company records show that it was put into voluntary liquidation a few months after all the 2016 payments we detailed above, at which time it had two directors.
Both seem to be victims of identity theft.
One of them is an employee at Rainbow Chickens we have not been able to reach. The other is Brian Sabelo Ngonyama, who expressed shock when contacted by amaBhungane.
It turns out that Ngonyama worked as a personal driver at the time of the payments. His boss was one Azhar Ansari, who has an accounting firm based in the Tudor Centre office park in Durban North.
Ansari, along with a colleague named Delores Perumal, were in fact directors of Shazari, but they resigned right before the payments started.
Be that as it may, when Shazari installed its new “front” directors and received all the money we have described, it was paying it onwards to another paper-thin company named Blue Nightingale Trading 41, registered at the very same Tudor Centre. Both Ansari and Perumal were, at different times, its directors.
Blue Nightingale, however, was just another pitstop.
Back to the state capture trail
The next stop for the money from Shazari involves yet more related companies: Lionhead Trading and Seattle Grain Merchants. Perumal was a director of both and Seattle, at least, was also registered at the Tudor Centre.
We know quite a bit about these two companies thanks to a Reserve Bank report gathering dust in the annexures of the Holden report, as submitted to Zondo.
This 2019 report recounts a bizarre chain of events when the central bank’s financial surveillance department came across Lionhead and Seattle during an unrelated investigation. The two companies’ accounts at Bidvest were frozen on suspicion of them making offshore payments for fictitious imports.
It was, however, not Ansari or Perumal who emerged to challenge the decision.
Instead, the SARB was approached by attorney Azgar Ally Khan and an “alleged employee” of Lionhead, Patricia Madurai.
According to the SARB report, after a first meeting:
“Ms Madurai invited [SARB representative Piet] Delport during the above meeting for dinner when visiting Durban again. It appeared from the above meeting and also later during telephone conversations with Ms Madurai that she wanted to influence Mr Delport’s decision to block the funds…”
The two representatives were not great choices if the point was to create the impression of legitimacy.
Madurai was more recently, in 2020, saddled with an astonishing R106 million income tax judgment. This implies that she had undeclared income in the region of R400 million – the kind of astronomical tax assessment that often flows from holding individuals vicariously accountable for their companies handling massive amounts of money with no clear origin.
Attorney Khan also ran into trouble with authorities – his law firm, AAK Attorneys, had its own account blocked and subsequently seized by the SARB for an unrelated “scheme to illegally send funds out of the Republic”.
After these two failed to convince the SARB to release the Lionhead and Seattle accounts, an unidentified individual called up a completely uninvolved employee in the SARB economics department to ask when the money would be unfrozen.
Then, new lawyers appeared and for some reason directed entreaties to the then-director general of finance Dondo Mogajane, who has nothing to do with policing banks or foreign exchange payments.
Here things get yet more interesting.
Mr Dollars
In a letter to Mogajane dated 3 July 2017, one of the new lawyers, JF van Deventer, pleaded for the release of his clients’ funds. In his version, said clients were simply doing a job for two individuals who had approached them to “facilitate remittances”.
The two individuals they tried to finger instead? Rashid Patel and Yusuf Ismail.
These two are known business associates and the latter, Ismail, has landed in amaBhungane’s sights before. In the underground financial world he is better known as “Joe Dollars”, the less famous little brother of Mohamed “Mo Dollars” Ismail, another individual who has been on authorities’ radar for years.
The suggested involvement of Patel and Ismail potentially brings yet larger money-moving networks into the picture, illustrating how complicated the flow of funds through alleged components of South Africa’s underground financial system can get.
Irrespective of who really controlled Lionhead and Seattle, what happens next is important.
Mr 2%
In a nondescript office building in central Hong Kong lies the registered office of a company that can sell you anything.
Fully Grace Limited, according to invoices used at banks to justify payments from South Africa to Hong Kong, sells rice, rolls of fabric, ready-made garments, bicycles, generators, pots, pans and “crypto-wallet” systems.
The business was set up in 2015 and had first-year sales of at least R128 million to the aforementioned Lionhead.
An equally versatile sister company run by the same people, from the same address, Fareast Success International, had sales of at least R56 million – also to Lionhead.
Yet another company seemingly also run by the same people, again from the same address, Baladewa Limited, received orders for at least R27 million – again from Lionhead.
All three are registered at the same Hong Kong address in the offices of a secretarial company named Multi-Chain that seems to perform double duty as a touring bus operator.
But there is a problem: there was, by all appearances, no rice, no clothes, no bicycles or generators or kitchenware or crypto wallets.
Additionally, at Fully Grace, invoices ostensibly from the same company were clearly not created by the same people, having wildly different designs. All they have in common is the bank account number.
This would indicate that they were actually concocted by South Africans seeking to make offshore payments.
In fact, all three Hong Kong companies are tied to a single South African: Durban businessman Ashok Rajwani, who is, alongside family members, shown to be a shareholder in Hong Kong company documents.
According to an internal SARB report from June 2020, the low-key Rajwani first landed in the central bank’s crosshairs in 2017 as part of an expansive investigation dubbed “Project X-Ray”.
The report by the SARB’s head of financial surveillance, Elijah Mazibuko, said Rajwani “conceded that he earned a fee of approximately 2 per cent for facilitating transfers to the account of Fully Grace by South African remitters…once the funds had been credited to the foreign bank accounts of Fully Grace, he would simply cause same to be transferred to any third party…”.
Rajwani would, in other words, have earned a fee of 2% for expatriating the spoils of state capture, among other things. These would be the funds that potentially made their way through RENS to Shazari, then Lionhead and ultimately to Hong Kong.
Rajwani did not respond to a request to comment.
The Rajwani companies in Hong Kong received R211 million from Lionhead between June 2015 and July 2016.
They also received millions from other interesting quarters, which we’ll get to in a coming instalment of this series.
In reality, the money moving systems we’ve been looking at lead to two distinct additional sites of widespread abuse of fronts and fakery to get money out of the country: a tangled web surrounding a Johannesburg businessman named Ke Tang… and Sasfin Bank.
More on that in our next instalment.
This post was originally published on here
