The writer is a former anti-apartheid leader and former Labor Minister
South Africa’s decade of corruption under former President Jacob Zuma robbed its taxpayers of many hundreds of millions of pounds (billions of rand) and contributed to a catastrophic loss of gross domestic product of about a fifth.
But the recent finding of the country’s Judiciary Committee headed by Deputy Chief Justice Raymond Zondo accusing Bain & Company of “illegal” conduct under Zuma is just the tip of the iceberg of global and UK-based companies complicity in the state scandal. in South Africa.
The miraculous looting and money laundering would not have been possible without the cooperation of Bain & Company, KPMG, McKinsey, SAP and the banks HSBC, Standard Chartered and Baroda, some of whom have owned and even repaid some of the fees. On the basis I have outlined in Parliament, I also believe the law firm Hogan Lovells was complicit.
Global corporations have been awarded contracts with beloved state to help Zuma’s business partners, the Gupta brothers, loot the state and get their stolen billions out of South Africa, and sometimes back, undetected.
Global banks such as HSBC, Standard Chartered and Baroda opened their electronic banking channels for the Guptas and their associates to transfer money through their digital pipelines to less regulated and transparent jurisdictions such as Dubai and Hong Kong, or British Overseas Territories in the Caribbean. And then launder the money by mixing it with other funds and disguising its origin.
These banks should have identified suspicious activity much earlier or immediately. Global lawyers and accountants helped the Guptas set up shell companies, hiding their true owners and moving money from one country to another. Unfair checks concealed suspicious transactions. Brokers received money laundered during the purchase of real estate in Gupta.
Global brand names profited as the Guptas hid and spent stolen funds otherwise earmarked for essential South African government spending, nearly bankrupting public finances and stalling growth.
Given the devastating findings about Bain in the first of three Zondo commission reports — two to come and expected to cover other global companies — it’s unacceptable for Bain to be licensed in the UK, US or anywhere else, at least. until it reimbursed fees estimated at £100 million (2 billion rand) earned by the South African state during the Zuma years, and answered charges in the courts there (the company says the commission “mischaracterized its work “).
Bain had contracts worth £55million with the UK Cabinet Office in recent years alone; I have written to Prime Minister Boris Johnson asking that he suspend his government contracts and do the same for others accused by Zondo.
Because blind-eyed governments are also part of the scandal. Unless the governments of the UK, US, China, India and UAE work together, state takeover will happen again, either in South Africa or elsewhere.
Despite claims of strict anti-money laundering and anti-corruption laws, international criminals continue to loot and launder with impunity through centers such as London, New York, Hong Kong, Delhi and Dubai.
Researchers need the right resources, but never get them. In the UK, the head of the National Crime Agency asked for an additional £2.7bn in funding for law enforcement in 2019 – not granted.
Governments around the world are talking about corruption but have so far refused to take the necessary tough action against companies to prevent them from enabling it. Without cross-border cooperation, no country will be freed from financial crime, estimated by the United Nations Office on Drugs and Crime at up to 5 percent of global GDP, or $2 trillion, a year.