, ,

Gupta Business Sell-off: What It Means For Zuma, South Africa – Analysts

The decision by the Gupta family to sell its businesses in SA is the latest indication that President Jacob Zuma’s grip on power may be slipping.

The Gupta family, which has holdings ranging from coal mining to media, made the surprise announcement on Saturday that it would exit all its interests in the country by the end of the year. Zuma, who has described the Guptas as friends while denying that the family wields political influence, is also facing a public backlash over a police investigation into Finance Minister Pravin Gordhan.

The Guptas’ move could be a signal that the family was positioning itself to take account of shifting power dynamics, Political Futures Consultancy director Daniel Silke said.

“They may feel that there is political change coming in SA,” Silke said. “In the sense that they may not in future have the same access to benefits that they have had in the past.”

The Guptas have been in business with the president’s son, Duduzane, and have employed one of his wives. Zuma and the Guptas say there is nothing untoward about their relationship and deny any wrongdoing.

With his second and final term ending in 2019, Zuma has faced calls to quit since the Constitutional Court ruled in March that he violated the Constitution when refusing to repay taxpayer funds spent on his private home.

Minister investigation

Criticism of the president has intensified since the Hawks said last week that they had asked Gordhan to appear at their offices over allegations including setting up an illicit investigative unit while he headed the South African Revenue Service (SARS) . Opposition parties and analysts have speculated Zuma may use the case to install a more compliant head of the Treasury. Zuma has said he does not have the power to halt the probe. The spat caused the rand and government bonds to tumble.

The Guptas’ business dealings and links to senior politicians, including Zuma, are currently being investigated by the public protector. In April, some of the country’s largest banks said they would close accounts related to the Guptas’ Oakbay companies.

Oakbay Investments owns 80% of Oakbay Resources, a gold and coal mining company listed on the JSE, according to the resource company’s website. Other businesses include closely held Sahara Computers, a heavy-equipment supplier, a safari lodge, ANN7 and the New Age newspaper.

“The Guptas are acting in their own interests,” Ethicore Political Consulting MD Abdul Waheed Patel said by phone from Cape Town. “One must take a cautious view of what happens between now and the end of the year. We have no indication that Zuma is going anywhere any time soon.”

A spokesman for the president, Bongani Ngqulunga, said by phone he was in Nairobi and was not immediately able to respond to questions on the implications of the Guptas’ sale plans.

Gary Naidoo, a spokesman for the Guptas, requested e-mailed questions and did not immediately respond to them.

The Guptas said in a statement on Saturday that the family had “no interest in politics, only business”.

“Clearly the Guptas have been feeling very uncomfortable and very unwelcome in SA,” Econometrix chief economist Azar Jammine said by phone. “It’s an issue that undermines the president.”



Sources: Bloomberg\www.bdlive.co.za


Leave a Reply

Your email address will not be published. Required fields are marked *