Guptas dismantle South African empire as bank accounts close

South Africa's President Jacob Zuma. Photo / AP file

The Gupta family is selling its assets in South Africa to little-known companies as their access to banking facilities dries up and allegations intensify that they used their friendship with President Jacob Zuma to wield undue influence over his Administration.

Today the Guptas announced the sale of a coal business to a Swiss company that has no history in the commodities business, after saying this week that they plan to sell their media unit to a former government spokesman in a deal the family are funding themselves. They have said that without banking facilities they won't be able to pay workers.

"The Guptas allegedly use very elaborate structures to do their business and may be selling assets to circumvent their lack of access to banking facilities," Darias Jonker, an Africa analyst at risk advisory firm Eurasia Group, said.

"I wouldn't be surprised that as these deals progress and we take a closer look, we find that there's been no real transfer of ownership."

The family is facing a backlash from politicians and civil-society groups over allegations they used a friendship with Zuma and a business relationship with one of his sons to secure sweetheart deals from the government and state companies.

The scandals put a spotlight on Zuma's dealings and opened fissures in the ruling African National Congress, with senior officials including Deputy President Cyril Ramaphosa, speaking out against what is locally termed "state capture".

South Africa's four biggest banks shut Gupta-controlled company accounts last year, citing reputational risk and regulatory concerns. India's Bank of Baroda, the last lender to continue doing business with them, is in the process of following suit.

The Guptas, who moved to South Africa from India in the 1990s, deny wrongdoing and claim they're being targeted by established white business interests intent on protecting their turf that they built up during apartheid.

Zuma dismisses accusations that he's been unduly influenced by the family or given them preferential treatment.

Protesters against President Jacob Zuma, march to Parliament in Cape Town South Africa, this month. Photo / AP file

The Guptas became a household name in South Africa in 2013 after it emerged that they'd used a military base near the capital, Pretoria, to land a chartered jet bringing guests from India to a family wedding. The use of the so-called national key point by civilians for private business is illegal.

Separate reports by the nation's graft ombudsman in November, and the country's main church organisation and a team of top academics in May alleged that they used their links to the president to secure contracts and deals from state companies.

- Bloomberg