South Africa’s 'state capture' scandal widens

Summary

Activists in South Africa have accused President Jacob Zuma of allowing corruption by business leaders, particularly the Gupta family, who are said to have captured the state. Both Zuma and the Guptas deny these allegations, but the scandal continues to expand, involving international brands like Bell Pottinger, KPMG, and major banks such as HSBC and Standard Chartered. Investigations are underway in multiple countries, including the UK, US, and Dubai, yet no independent inquiry has been established in South Africa. Despite this, those at the heart of the controversy remain unaffected, with the state capture continuing unabated.

Takeaways

• 😀 Activists in South Africa claim that President Jacob Zuma has allowed corrupt business practices, particularly involving the Gupta family, to control the state.
• 😀 Both President Zuma and the Gupta family deny the allegations of corruption and state capture.
• 😀 The corruption scandal continues to expand, with several international brands now linked to it, including Bell Pottenger, SAP, KPMG, and banks like HSBC, Standard Chartered, and Bank of Baroda.
• 😀 These international companies have been defending themselves, with some issuing apologies and taking remedial actions such as firing executives and repaying funds related to Gupta accounts.
• 😀 Lord Peter Hain, a former anti-apartheid activist, has pushed for investigations into British banks allegedly involved in money laundering related to the scandal.
• 😀 The scandal involves billions of pounds siphoned from taxpayers via dodgy contracts and grants, which allegedly benefited Zuma's family and the Gupta brothers.
• 😀 Some of the illicit money has been laundered abroad, before being recycled back into South Africa, complicating investigations.
• 😀 Although the UK, US, and UAE are investigating, President Zuma has yet to establish an independent inquiry into the state capture, as ordered by a public watchdog a year ago.
• 😀 State capture is seen as a system that ensures impunity, with individuals placed in positions to protect private interests at the expense of public welfare.
• 😀 Despite widespread allegations, business continues as usual for those at the heart of the scandal in South Africa.

Q & A

What is the main issue discussed in the transcript?

The main issue discussed is the allegations of corruption and state capture involving President Jacob Zuma, the Gupta family, and several international companies. These entities are accused of facilitating corrupt practices to take control of the state, particularly through the misuse of contracts, grants, and money laundering.

What role does the Gupta family play in the alleged corruption?

The Gupta family is accused of using corrupt practices to gain control over South Africa's state resources. They are at the center of the state capture scandal, with allegations that they facilitated corrupt business deals and laundered money abroad.

How do international companies factor into the corruption scandal?

Several international companies are implicated in the scandal, including British PR firm Bell Pottinger, German software giant SAP, auditors KPMG, and banks like HSBC, Standard Chartered, and Bank of Baroda. These companies have been accused of either knowingly or unknowingly facilitating corruption.

What action has been taken by the international companies involved in the scandal?

The international companies involved have taken remedial actions, including apologizing for their roles, firing senior executives, and repaying money earned from Gupta-related accounts.

How have the banks involved responded to the allegations?

The banks involved have not commented extensively but have confirmed they are cooperating with investigations into the allegations of facilitating corruption and money laundering.

What is Lord Peter Hain's role in addressing the scandal?

Lord Peter Hain, a former anti-apartheid activist, has advocated for investigations into the role of British banks in the scandal. He convinced financial regulators and the Serious Fraud Office to probe the money laundering activities connected to the profits of state capture.

What is meant by 'state capture' in the context of the transcript?

State capture refers to the process through which private individuals or companies, in this case, the Guptas, use corrupt practices to influence and control state institutions, ensuring that government contracts and grants are diverted into their pockets, often with the assistance of government officials like President Zuma.

What is the significance of the investigation by the Serious Fraud Office in the UK?

The investigation by the Serious Fraud Office is significant because it is focused on British banks that may have been involved in money laundering related to the profits of state capture in South Africa. This investigation could have broader implications for companies operating internationally.

Has President Zuma taken any action regarding the state capture inquiry?

Despite the call for an independent inquiry into state capture, President Zuma has not set up the inquiry as required by a public watchdog a year ago. His failure to act suggests that the scandal continues without the necessary accountability.

How do investigations in the UK, the US, and the UAE impact the companies involved?

Investigations in the UK, the US, and the UAE are likely to impact the companies involved by potentially uncovering illicit activities, leading to reputational damage and legal consequences. However, in South Africa, it appears to be business as usual for those at the center of the scandal.