South Africa graft: US sanctions the brothers at heart of scandal

Washington says Gupta family is responsible for misappropriating state assets, in win for current president, Ramaphosa.

    South Africa has been struggling to address endemic corruption, which has also contributed to political turbulence [Siphiwe Sibeko/Reuters]
    South Africa has been struggling to address endemic corruption, which has also contributed to political turbulence [Siphiwe Sibeko/Reuters]

    The United States on Thursday sanctioned the three Gupta brothers at the centre of the corruption scandal in South Africa that contributed to the downfall of former President Jacob Zuma, saying they had misappropriated state assets.

    The US decision to impose financial restrictions on the brothers is a public relations victory for Zuma's successor, Cyril Ramaphosa, as he tries to clean up national politics and attract foreign investment to lift South Africa's flagging economy.

    The relationship between Zuma and the three brothers - Ajay, Atul and Rajesh - is one of the main areas of focus of a judicial corruption inquiry that Zuma was pressured into setting up before he was ousted by his own party in February 2018.

    Zuma and the Guptas deny the corruption allegations and law enforcement officials have yet to nail down a convincing case against the brothers. The matter has fueled public frustration with government attempts to crack down on graft.

    "The Gupta family leveraged its political connections to engage in widespread corruption and bribery, capture government contracts, and misappropriate state assets," Sigal Mandelker, the US Treasury's under secretary for terrorism and financial intelligence, said in a statement.

    'Those who profit from corruption'

    Restrictions on the brothers and their business partner Salim Essa made by the Treasury's Office of Foreign Assets Control mean that US citizens are prohibited from doing financial transactions with them or any entities they control.

    "We will continue to exclude from the US financial system those who profit from corruption," Mandelker said.

    The corruption inquiry has shocked South Africans with revelations about the brazen way some people close to Zuma allegedly tried to plunder state resources.

    This week, Zuma's son Duduzane, another business partner of the Guptas, appeared at the inquiry and made light of allegations against himself and the Guptas.

    South African Minister of Justice Ronald Lamola said it was critical that the country confront corruption.

    US Secretary of State Mike Pompeo said the restrictions demonstrated Washington's commitment to promoting transparency, accountability and the rule of law.

    Rudi Krause, a South African lawyer for Ajay Gupta, said he was preparing a statement. Atul Gupta, Rajesh Gupta and Salim Essa could not immediately be reached for comment.

    The Guptas left South Africa shortly after Zuma's removal from power and are believed to be living in Dubai in the United Arab Emirates.

    SOURCE: Reuters news agency