Mon, 30 Nov 2020

The bankruptcy last year of India's Jet Airways might be of little interest to South Africans, but for one fact: the airline has just been bought by a consortium led by Gupta associate Murari Lal Jalan.

Likewise, the glitzy launch of a number of major property developments in Uzbekistan would normally not make the local news. Except that these multibillion-rand developments are being undertaken by the self-same Jalan, in cooperation with members of the Gupta family.

Jalan has, via his lawyers, denied any "relationship, business or otherwise", with the infamous brothers Ajay, Atul and Rajesh Gupta, or that he acted as a front for them. He admitted to employing two of their children, their nephew and their son-in-law.

Jet Airways

Last year, Jet Airways entered what in India is called a corporate insolvency resolution process - something akin to South Africa's business rescue.

A number of consortia made bids, but on Saturday, creditors voted in favour of a consortium consisting of Jalan and a UK venture capital outfit called Kalrock. The price was reportedly in the region of R2.2 billion.

Kalrock did not respond to questions. The company is part of the Fritsch Group, an investment vehicle founded by German entrepreneur Florian Fritsch. The group website calls Fritsch "a true conscious capitalist who ensures a positive impact to society".

Last year, amaBhungane revealed how the broader Jalan and Gupta families cemented ties through one of the Gupta clan's signature mega-weddings, which saw Shivangi Jalan marry Atul Gupta's son, Shashank Singhala, then 21.

Murari Lal Jalan is Shivangi's uncle.

amaBhungane GRAPHIC: Supplied by amaBhungane

London law firm Kobre & Kim, which boasts of its "aggressive" approach to solving client problems, replied on Jalan's behalf for this article.

It wrote:

It is a matter of public record that Mr Jalan's brother's daughter is married into the Gupta family. Mr Jalan accordingly knows some of the Gupta family through that extended family connection in India.

"However, the private marriage carries no business link or interest between the Jalan family and the Guptas. Mr Jalan and his brother maintain separate business entities. Their personal relationships have no connection with their business activities, which are separate and distinct."

There was at least one reason to ask whether the Guptas were involved in any way in Jalan's bid for Jet Airways: their alleged efforts to lobby on behalf of Jet in the past.

Former ANC MP Vytjie Mentor testified at the Zondo commission that she was offered the post of minister of public enterprises in 2010 if she got SAA to scrap its Mumbai route, so that Jet could take over.

This offer was allegedly made by Ajay Gupta at the Gupta compound in Saxonwold.

Mentor testified she refused to take the bait and instead Malusi Gigaba was appointed.

Former SAA chief executive Sizakele Mzimela told Zondo that, shortly after her appointment, Gigaba called SAA executives to a meeting with controversial Jet founder Naresh Goyal on 10 January 2011.

They waited for two hours only to have Goyal show up and angrily demand that SAA cede the route. Gigaba said nothing, she testified.

Jet was also the airline used by the Gupta family to land their guests at the Waterkloof air base for the infamous Sun City wedding in 2013.

Jet's bankruptcy coincides with Goyal's fall from grace. The man who allegedly felt entitled to shout at SAA bosses in front of a sitting minister is now being investigated for money laundering in India.

Jalan, via his lawyers, said he did not know Goyal and that amaBhungane's questions were the first time he had heard about the Guptas lobbying for Jet in South Africa.

He also denied that any member of the Gupta family has anything to do with his Jet bid.

He said:

"None of the individuals connected with the Gupta family ... are either directly or indirectly involved in the Jet Airways bid. The Gupta family, extended or otherwise, is not funding the bid."

From SA to Uzbekistan

The Gupta brothers may not be involved with the Jet rescue, but the broader family have joined the Jalans, embarking on a truly epic project: property development in Uzbekistan.

This venture appears to have drawn in a big chunk of the extended Gupta family and at least one notorious middleman.

The vehicle is MJ Developers, a property group set up in the Central Asian country with four mega-developments already announced. The sheer scale of these plans make them seem almost fantastical.

Murari Lal Jalan has evidently invested heavily in his public image in Uzbekistan as a benevolent billionaire investor and philanthropist. On his group's website, there are articles describing him as an "intelligent investor in diverse sectors", "an eminent figure in the business fraternity", "a man who has a global vision" and "leader, chairman and visionary", among other things.

Jalan is the face of the group, but glued to his side and representing the company at public events is Gupta in-law Aakash Garg, of Sun City wedding fame. That extravaganza saw Garg marry Vega Gupta, the Gupta brothers' niece, Achla.

According to press releases and media reports from Uzbekistan, Garg is the "vice-president of the marketing department" of MJ Developers.

Jalan's lawyers called Garg a "marketing advisor to MJ Developers" in response to amaBhungane's questions. On a company website, he is described as a "part of the family" and one of the "core contributors to convert Mr Jalan's ventures into grand success".

amaBhungane GRAPHIC: Supplied by amaBhungane

At one stage, Garg was touted as more than just an employee or advisor.

AmaBhungane previously showed that he was recorded as the 50% shareholder of at least part of the new Uzbek property empire, dubbed "Minerva World of Knowledge".

Minerva entails a proposed academic city-in-a-city sporting multiple colleges, residential areas and sports grounds in the Uzbek capital, Tashkent.

Garg's shareholding was reflected in company registration documents dating from last year. The co-signatory and other shareholder in this document is Murari Lal Jalan.

amaBhungane PHOTO: Supplied by amaBhungane

Garg was also present at an event in August to lay the foundation stone of the first building at the promised sprawling Minerva site.

amaBhungane PHOTO: Supplied by amaBhungane

Jalan's lawyers denied that Garg or any other member of the Gupta family funded or held shares in MJ Developers or its subsidiaries like Minerva.

"We are instructed that Mr Garg and Mr Jalan considered a 50/50 joint venture in Uzbekistan. However, Mr Garg withdrew from the project before the company began trading. Mr Garg did not invest any funds and has no investment or ownership interest in MJ Developers or any of its projects or entities," the lawyers said.

They said:

"MJ Developers and its associated entities are 100% owned by Mr [Murari Lal] Jalan (save for one project which is owned by his nephew), and have never received any funding or investment from the Gupta family, directly or indirectly."

Jalan's version does not account for the obvious involvement of several other members of the Gupta family and a key associate, amply demonstrated by MJ Developers' own promotion of its projects in Uzbekistan.

Photos from one glitzy MJ Developers event in Uzbekistan in February this year show them posing together with Uzbek politicians.

Apart from Garg, this event included Kamal Singhala (Ajay Gupta's son) and Varun Gupta (son of Achla, the sister of the more famous three Gupta brothers).

A more surprising presence is Ashok Narayan, the one-time "advisor" to Ace Magashule; he was the Guptas' point man in the Estina dairy scandal and a key cog in the Gupta machine.

amaBhungane PHOTO: Supplied by amaBhungane amaBhungane PHOTO: Supplied by amaBhungane

Photos from another launch event for a MJ Developers project show Srikant Singhala (Atul Gupta's son) joining the two Jalans on stage alongside Uzbek dignitaries.

amaBhungane PHOTO: Supplied by amaBhungane

After initially skirting the question, Jalan's lawyers admitted that Srikant, Kamal and Varun were in fact employees of MJ Developers.

They denied that Narayan or another apparent Gupta associate seen in the pictures had "any role" in MJ Developers, and played down the importance of the Gupta children in the organisation.

They said: "With respect to the referenced event, the five individuals named were part of a large gathering of more than 200 people from India and the Middle East at the launch of one of MJ Developers' projects.

"These individuals did not share the stage with Mr Jalan and, following the launch events, many individuals came to meet and shake hands with Mr Jalan and were photographed in the process. This is not an indication of any special business or personal relationship with Mr Jalan and/or any unique privilege(s) granted to the individuals photographed."

But in another indication of seniority, on at least one occasion Kamal Singhala (Ajay Gupta's son) was the one showing the governor of Namangan region around the building site of the Namangan Square development.

amaBhungane PHOTO: Supplied by amaBhungane

In the background: More deals

In its previous reporting, amaBhungane showed how the Guptas were kept informed of a Jalan deal with one of the Gupta associates as far back as 2015.

Recent court proceedings involving Garg in Bermuda have revealed more interactions.

In January 2018, Garg's Dubai-based company AGEV Investment signed a loan facility for $5 million with Jalan's company AgioImage. The next month, Jalan reciprocated by extending a loan facility of $20 million to AGEV.

A month after that loan agreement was signed, AGEV proceeded to try and buy the Guptas' airplanes stuck in South Africa as an ostensible independent investor. The attempt was thwarted by the Reserve Bank, as amaBhungane reported.

"The loan extended by Mr Jalan to Mr Garg [or] to entities controlled by him was a commercial, arm's length transaction. Mr Jalan denies any suggestion of impropriety in respect of that transaction," said Jalan's lawyers.

Jalan also cut the Guptas a cheque for R12 million to help pay for another of the family's mega-weddings early last year.

The lawyers have an explanation for this too. According to them:

"Mr Jalan's brother wished to make a contribution as is a common custom between Indian families associated by marriage or engagement."

Jalan, however, paid on behalf of his brother because the latter owed Murari money, they said.

In other words, Jalan did not really give the Guptas money, despite having written the cheque.

Then there is another plane-related deal from 2018, again tying the Jalans to the Guptas.

In India, Gupta investment company LCR Investments owned 68.5% of another company, called Heritage Aviation, a licensed carrier with a single jet registered in its own name. The company has, however, functioned for many years as the operator of aircraft owned by the Gupta family via companies in Dubai under lease agreements.

On 13 July 2018, LCR Investments entered into an agreement with a Jalan holding company in India, Bengal Orion Financial Hub.

The Guptas were selling their stake in Heritage to Bengal Orion for INR68.5 million (R13 million at the time). Ankit Jalan, Murari's nephew, signed on Bengal Orion's behalf and then became a director of Heritage.

There is some dispute over whether the transaction involved Murari Lal Jalan.

Share registers from India seem to show Bengal Orion was still under his control, with a 78% stake, on 26 November 2018, months after the agreement was signed.

Murari's shares were at some stage transferred to his brother Vishal, the father of Shivangi, who married into the Gupta family. Vishal is one of three Jalan brothers. Murari's acolyte, Ankit, is the son of the third one, Narayan Jalan.

Jalan's lawyers claimed that Murari had in fact transferred his shares to Vishal in 2017 already and was thus not a shareholder when the Heritage deal with the Guptas took place and that he had "no involvement in or knowledge of" it.

Contemporaneously with that deal, the Jalans and Guptas were also setting up two new companies in India, called Patanjali International and Patanjali India Distribution respectively.

The former was registered on 10 December 2018, with Shashank Singhala (Atul Gupta's son who married into the Jalan family) owning 49.4%, while Ankit Jalan owned 33% and Achla Gupta (the mother of Vega Gupta, who married Aakash Garg at Sun City) 17%.

Patanjali India Distribution was registered in January last year with Anil Gupta, Achla's husband, owning 99.4%. Shashank Singhala, Murari Lal Jalan and others owned nominal shares.

Jalan's lawyers said this was "a not-for-profit company incorporated specifically for doing charitable work ... which never got off the ground".

A few false starts aside, it is becoming clear that, far from bunkering down in Dubai, the Gupta family's next generation has gone into the fray with greater ambition than ever.

Source: News24

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