Evidence of millions flowing to a Gupta company has tied the family directly to an apparent racket of shaking down companies that sought state contracts.
For more than a year, amaBhungane has investigated how a letterbox company called Homix secreted away hundreds of millions; apparent kickbacks from companies doing business with Transnet, the state-owed transport operator.
Read our analysis: Zuma's treasonous alliance with the Guptas
There were signs all along that this had something to do with the Guptas. Homix's self-proclaimed chief executive used to manage a Gupta company.
Some of the money flowed to a Hong Kong firm that shared an address with a Gupta lieutenant's companies.
Now, papers filed in the High Court in Johannesburg have provided direct evidence of Gupta involvement: after Homix was exposed, a seemingly round 10% of the first year's fee on another big Transnet contract flowed to Gupta-owned TNA Media.
The amount, R17,1 million, was allegedly laundered through two companies on the strength of a backdated contract and bogus invoices before arriving at TNA, which publishes The New Age.
The latest evidence adds substance to the claim at the centre of the "state capture" debate: that the Guptas squeeze kickbacks from companies doing business with the state by using their political connections and officials they have deployed or bought.
The Gupta family did not reply to questions this week, saying via a spokesperson: "AmaBhungane has consistently printed innuendo, speculation and lies about the Gupta family, its businesses and its friends.
"We have replied in good faith many times, but still suffer from total rubbish being printed. We fully respect genuine media enquiries but will no longer reply to ... amaBhungane."
Transnet denied wrongdoing, saying it was "confident in [our] processes".
The emergence of Homix
The story so far starts in early 2014 when Homix made contact with telecoms provider Neotel.
In a letter, it offered to land Neotel a Transnet IT equipment contract — in return for which it wanted 10% of the contract value.
Despite internal misgivings, Neotel paid Homix R35 million and landed the contract, worth over R300 million.
During August 2014, an even bigger prize came up. Transnet nominated Neotel as preferred bidder in a tender for a wide suite of network services, saying that it would get the contract if terms could be agreed by a December deadline.
With two weeks to go, Transnet withdrew from the negotiations without giving reasons, according to information from an investigation later ordered by Neotel's board. In apparent desperation, Neotel reached out to Homix again.
A Neotel employee told the board's investigators that Homix again demanded 10%. Neotel bargained it down to 2% of the R1.8 billion contract value — R41 million including VAT.
Transnet returned to the negotiating table and Neotel got the contract.
There can be little doubt the payments were kickbacks. Homix was not a sophisticated consulting business whose work could justify millions in fees.
When amaBhungane visited its Wierda Park, Centurion office address last year, we found a locked blue door abutting a latrine in a neglected office block.
A neighbour said a single person used to come in irregularly, generally after hours.
Homix's only registered director, Yakub Bhikhu, was hard to trace.
When someone claiming to be him finally answered a phone number stuck to the blue door, he did not respond to questions.
However, when the Neotel investigators started asking questions, one Ashok Narayan identified himself as Homix's chief executive and tried unsuccessfully to convince them that the company had done real work for Neotel.
Narayan was a former managing director of Gupta IT company Sahara Systems.
The Homix laundry
Homix bank records later seen by amaBhungane confirmed the impression that it was a front to launder kickbacks, not a legitimate business.
The records showed minimal office and no salary expenses. But they did show money flowing in and out of Homix at an astounding rate: R144 million in and R189 million out over just six months.
The inflows consisted largely of transfers from Neotel and four other companies, each of which benefited from Transnet contracts.
Almost all of the outflows went to Bapu Trading, a company more obscure even than Homix. There the trail went cold.
But a month later, in May 2015, Homix made 16 transfers totalling about R66 million to two Hong Kong companies, according to an official report seen by amaBhungane.
The Reserve Bank got suspicious, as the outflows did not match claimed imports. It froze the last three transfers at the end of that month.
One of the two Hong Kong companies on the receiving end, Morningstar International Trade, shares a registered address with companies formed by Gupta lieutenant Salim Essa.
During this entire history, two more very large contracts came up at Transnet, this time to install CCTV cameras at ports. Again they went to Neotel, and again 10% appears to have been laundered.
But this time it ended discernably in a Gupta account. It went like this:
In May 2014, Transnet approved the confinement of the first CCTV contract, worth R329 million, to Neotel. "Confinement" is Transnet's term for appointing a supplier without a competitive tender.
Nine months later, on February 20, 2015, Transnet management recommended confining a second CCTV contract to Neotel too, Transnet procurement records show.
The timing was interesting.
The day before, Neotel records show, Neotel had signed a "business consultancy agreement" with Homix finally to give effect to its promise to pay Homix R41 million to get the unrelated Transnet network services contract.
Transnet notified Neotel that it had won the second CCTV contract, worth another R505 million over three years, at the end of March 2015, Neotel records show.
Two weeks later Transnet formally placed the order with Neotel.
Neotel in turn subcontracted a CCTV specialist company, Technology and Procurement Holdings, better known as Techpro.
If Neotel or Techpro had promised a kickback on this latest contract too, paying it via Homix would have been risky.
In mid-April 2015, when Transnet placed the CCTV order, Neotel's auditors were crawling all over the earlier Homix payments.
They blew the whistle to Neotel's board, which commissioned an investigation that ultimately led to Neotel's chief executive and chief financial officers resigning.
And the air was not about to clear. By the end of April, Neotel's auditors had reported the Homix payments to the Independent Regulatory Board for Auditors, which in time notified other authorities, including the Hawks.
By the end of May, the Reserve Bank had frozen Homix's remittances to Hong Kong.
Wanted: a new kickback channel
So if a kickback could not be paid via Homix, then who?
The answer appears to lie in the dirty washing of financial advisory firm Regiments Capital, hung out to dry in rancorous litigation between its directors at the High Court in Johannesburg.
Directors Litha Nyhonyha and Niven Pillay on the one hand, and Eric Wood on the other, fell out after Wood sided with the Guptas and Essa when a Gupta offer to buy Regiments fell through.
Though Wood joined Essa in the competing Trillian Capital Partners this year, the two sides are still trying to have each other removed from Regiments' board.
In an affidavit filed last month, Nyhonya describes, and attaches, evidence he says was discovered after Wood left.
What it shows is this:
On June 4, 2015, days after the Reserve Bank froze Homix's transfers to Hong Kong, Wood received an email from Narayan — the former Gupta manager and self-identified Homix chief executive.
Narayan asked Wood to get Regiments to invoice Techpro, the Neotel CCTV subcontractor, for R17,1 million. Wood complied.
The next day Narayan emailed Wood again, attaching three invoices, also totaling R17,1 million, from TNA, the Gupta media company, to Regiments.
The TNA invoices purported to be for Regiments advertising in The New Age.
Next, Narayan emailed Wood an agreement purporting to be between Regiments and Techpro. It was already signed by Techpro and backdated five months to January 2015.
The agreement provided justification, on paper at least, for the Techpro payments to Regiments, saying Regiments would do "cost analysis and financial modelling" for Techpro "in respect of the second phase of CCTV installation at Transnet".
Nyhonyha states in his affidavit that Regiments did not advertise in The New Age and that Regiments did not provide the claimed services to Techpro.
Wood, he charged, "knowingly allowed Regiments to be used as a conduit for an entirely fictitious set of transactions" to launder money from Techpro to TNA.
Wood denies this, saying his version will be provided when he files a replying affidavit.
But Nyhonyha's version is supported not only by the emails, invoices and backdated contract annexed to his affidavit, but also by a Regiments bank statement which shows the symmetrical flow of R17,1 million from Techpro to Regiments and Regiments to the Gupta company on two consecutive days.
The backdated contract, perhaps carelessly in retrospect, tied the R17.1 million payment to the second Transnet CCTV contract. The amount also ties back neatly to it.
Neotel records show that it recognised R150 million in revenue immediately on getting the contract from Transnet.
R17,1 million — R15 million excluding VAT — is a round 10% of that first year's revenue.
And so, when the R17,1 million washed up at TNA, it not only swelled the Guptas' purse but gave the clearest indication yet they may have been the true beneficiaries of the Homix kickback laundry.
Narayan and Essa did not respond to requests for comment.
Wood said via a spokesperson: "Suffice to say that all of the allegations made by his former partners are strenuously denied and will be comprehensively traversed in his answer to the court papers which his attorneys are presently preparing on his behalf and which will be filed in short order.
"It would be improper and possibly prejudicial to his case to answer your questions prior to the filing of his answer."
He also said he "would advise that these matters" be left to an independent investigation led by Advocate Geoff Budlender, appointed by Trillian chair Tokyo Sexwale.
Techpro manager Craig Smith said about the allegations contained in the court papers: "As you can imagine it is quite a shock getting this kind of information and we've sent it to [our attorneys] to investigate further."
He added: "Whether the insinuations that you are making are true or not true I don't know.... If there is wrongdoing we want to know about it."
Neotel chair Kennedy Memani said that during the company's initial investigation the board "took all the necessary steps on the basis of what came out".
He said he did not want "to go back to that debate ... unless anything else comes out".
A Transnet spokesperson said the company was "confident in its processes... In addition, Transnet was advised by Neotel that an independent investigation commissioned by Neotel revealed no wrongdoing or corruption by Transnet or any of our executives".
"Please note that Homix is not a Transnet supplier. All matters related to Homix should be directed to Neotel. Transnet has never engaged with Homix or its executives."
He said the confinement of the CCTV contracts was justified by Transnet's urgent need to replace outdated CCTV equipment to comply with international standards and not lose its status as a ports authority.
Neotel was chosen as service provider as the existing infrastructure belonged to Neotel and "the need to integrate new and existing equipment and systems was crucial".
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