TBML moved millions of dollars for Gupta linked companies

South Africa’s state capture inquiry has been told by a central bank official that trade-based money laundering (TBML) was extensively used to move illicit funds by companies linked with the Gupta family.

The family has been under intense suspicion of corruption because of its close ties to Jacob Zuma when he was South Africa’s president.

One of the family’s companies, Homix, was used to illicitly siphon millions of rands in kickbacks to other companies linked to the family both inside and outside South Africa according to a senior official at the central bank.

No explanation

South African Reserve Bank (SARB) official, Elijah Mazibuko, told the state capture inquiry that Homix was summoned by the central bank to explain suspicious activity in its accounts amounting to 14 million rands (R14 million – US$950,000). 

Curiously, nobody representing Homix ever turned up to meet with SARB to explain this activity nor did anyone try and claim this amount that the company was obliged to forfeit to the state when it offered no explanation.

No real trading

Mazibuko said Homix’s Standard Bank account remained largely inactive until March 2014, when there was a dramatic increase in activity. It received several large deposits totalling about R660 million, with no evidence of real trading.

A similar pattern was discovered in subsequent months, with Homix in April 2014 receiving from Neotel the sum of R34 million that was then entirely transferred Gupta-linked entities, Ballatore Brands and Bapu Trading.

Two months later some R1.8 million entered Homix’s account and was transferred to Bapu Trading three days later.

Clearly TBML

Mazibuko made clear to the state capture inquiry how he saw these transactions.

“When you talk about these type of transactions, there’s something that is called trade-based money laundering and it is a process whereby criminals use legitimate trade to hide their criminal proceeds from unscrupulous sources whatsoever, so the trade has to look legit,” he said.

Categories: Trade Based Financial crimes News

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