A controversial family of Indian-born businessmen known for their close links with President Jacob Zuma has been thrust back into the spotlight in South Africa after a key opposition party demanded their ouster from the country.
It was another ordinary day in abnormal South Africa when, during a news briefing last week, the Economic Freedom Fighters (EFF), the opposition party known for its confrontational tactics, answered a question about the Guptas.
“Guptas must leave the country with immediate effect. We’re tired of talking about the Guptas,” EFF leader Julius Malema said. “We must take action against corruption. It’s a battle, it’s a war against the Guptas.”
Malema continued: “We are not going to allow South Africa to be sold over a plate of curry. We’re not part of that mess. We’re going to take physical action over that.”
The attack was the latest salvo by critics of the family, led by brothers Atul, Rajesh and Ajay, known for their close proximity to South Africa’s powerful, in particular President Zuma and his family.
On Tuesday, the Gupta brothers and nine other applicants filed an urgent application in the high court of Pretoria, asking it to interdict Malema from inciting violence against employees of their businesses.
South Africa is facing a difficult time 22 years after the end of apartheid. GDP growth has slowed, with the World Bank pegging it at 0.8% this year, and the country is facing downgrades from ratings agencies.
South Africa has also struggled with inequality and the official unemployment rate is more than 25%, though some estimate the unofficial rate to be much higher. Recently, a spate of racist social media posts by white South Africans has called into question once again the state of race relations.
Zuma and the ruling African National Congress have been criticised for a lack of development, in particular not doing enough to improve the economic prospects of the African majority while favouring businesspeople with political connections – such as the Guptas.
Who are the Guptas
The Guptas’ business deals have been in the news for all the wrong reasons. Their mining companies have been accused of benefiting from political connections. Last year some accused them of influencing the decision to fire South Africa’s finance minister Nhlanhla Nene, and replace him with a party backbencher, a move that sent the financial markets into a tailspin.
Political analyst Ebrahim Fakir says that while the Guptas have built their success on access to political figures, they are not alone in this.
“Every successful business, whether family or otherwise, they all managed to get terribly successful because of their proximity to power. This is true everywhere,” Fakir says. “The trouble is they appear to have been lobbying in an unethical way.”
Atul Gupta reportedly arrived in South Africa in 1993 and entered business, most notably with Sahara Computers, whose name invoked an Indian business giant but which has no connection to its namesake. The government at the time was emerging from apartheid and eager to attract investors.
“They came at a time of euphoria when the country was looking for investments. I think they came with a pot of money to invest and they grew from there,” Fakir says.
Zuma’s son Duduzane Zuma is director of Sahara Computers. His twin sister Duduzile has also worked for Sahara. One of the wives of the polygamous Zuma has reportedly been employed by a mining company owned by the family.
It was with Duduzane Zuma that the Guptas made their introductions to many South Africans. In 2010, Duduzane and members of the family were among those set to become beneficiaries of an 800-million rand mining deal, a little more than $100 million at the time, involving AngloAmerican and ArcelorMittal.
The deal drew controversy and was later overturned in court.
The Guptas were back in the news in 2013, after the family used a South African military airbase, Waterkloof, to ferry foreign guests for a niece’s wedding at a posh resort. Atul Gupta later apologised for the family’s use of the airport.
And while the Guptas were in the news, they also launched their own media company, first with The New Age newspaper in 2010. The paper’s editor and several senior staff members quit shortly before the publication’s launch.
The newspaper was followed by the 24-hour cable news network, ANN7, which launched in 2013. For critics, the newspaper and news network have highlighted the Gupta family’s improperly close relationship with government, and they allege that state-owned companies are inappropriately supporting the media units in the form of advertisement and sponsorships.
The New Age and ANN7 have been accused of supporting Zuma and the Guptas editorially as well. The criticism reached a new, tense high at Malema’s news briefing, when he accused them of being part of the family’s “cartel” and banned them from covering EFF’s events.
“We cannot guarantee the safety of Gupta employees at our events,” Malema told reporters.
‘Emblematic of country’s problems’
The Gupta family could not be reached for comment on this report. But in December, The New Age CEO Nazeem Howa released a statement defending the family from accusations that it was benefiting from political connections.
“They are not politically active nor have they taken any political benefits and remain simple business people focusing on running profitable and sustainable businesses,” Howa wrote. He added the Guptas employ more than 5, 000 South Africans and haven’t taken money out of the country as suggested by some media entities.
But Mondli Makhanya, a political editor for South Africa’s Citypress newspaper, wrote last year the Guptas had become emblematic of the country’s problems.
“It could be argued that it is unfair on the Guptas to have all the nation’s woes piled on their shoulders. But the thing is, they are taking the bullet for many others who are involved in the project of state capture by business interests during the Zuma presidency. The Guptas are emblematic of that phenomenon,” Makhanya wrote.
Fakir agrees, saying unhappiness with Zuma has become “enmeshed” with the Guptas due to their close relationship.
“Because Zuma is so closely tied to them they appear to be closely related. So everything Zuma does wrong, and he does plenty wrong, gets tied to them,” Fakir says.