The Guptas are grounded
And their tax woes in India are also piling up
On the day a Johannesburg judge clipped the embattled Gupta family’s wings by ordering them to immediately return a luxury VIP jet to South Africa, they were dealt another blow – this time by the Indian tax authorities.
Johannesburg High Court judge Fayeeza Kathree-Setiloane on Monday ordered that the family’s Bombardier jet [ZS-OAK], which their company Westdawn Investments bought through a US$41-million loan from the Export Development Canada bank [EDC], be flown to Lanseria airport outside Johannesburg.
Kathree-Setiloane also ordered that the Civil Aviation Authority (CAA) immediately deregister the aircraft pending the outcome of ongoing court proceedings in the UK.
The deregistration, say aviation lawyers, means that the aircraft, which was last recorded as having flown to Dubai, will effectively be grounded.The order came as the Times of India reported on Monday that the Gupta brothers had been given until March 26 to appear before the Indian Income Tax Department in connection with alleged money-laundering and fraudulently amassing properties across that country.
The newspaper reported the authority was investigating the family for having allegedly hidden away properties from the Indian tax authorities and that tax officials were now preparing to seize the properties, which include a R200-million temple. The Indian tax authorities are also investigating dozens of the Guptas’ relatives, including their brother-in-law Anil Gupta, who was allegedly found in possession of hundreds of blank cheques, reported The Times of India.
Aviation law expert Pieter Truter, of Marais Muller Hendrik attorneys, said Kathree-Setiloane’s order effectively clipped the Guptas’ wings.
He said that the deregistration of the aircraft by the CAA would reflect on an international aviation registry.
“The court order will have to be communicated by the CAA to all international aviation authorities.”
On fears that the family could try and re-register the aircraft and move it, Truter said that once deregistered an aircraft could not automatically be registered in another country, especially if there was a legal dispute around it.
“Anyone who tries to re-register the aircraft will be blocked until all legal procedures are resolved.”
He said if someone tried to take off with the aircraft, the authorities of that country would be bound to prohibit them from doing so and ground the aircraft.
Truter said if the aircraft was outside of the country’s borders it would have to be flown specially back to South Africa.CAA spokesman Kabelo Ledwaba said they would study the court order and abide by it.
“If it means deregistration of the aircraft, we will do so as ordered by the court.”
He confirmed that once deregistered, until it was registered in another state, no one could fly it.
“Stateless aircraft cannot be flown. An aircraft must be registered before it can be flown.”
He added that anyone or company that acted in contempt of court would have to be dealt with by the relevant state organs.
Monday’s order follows an urgent application by the EDC in February for the aircraft to be grounded. The grounding occurred a day after the Hawks raided the Gupta compound in Saxonwold and announced that the family patriarch, Ajay Gupta, was a fugitive from the law.
EDC brought the application after the closure of several of the family’s bank accounts, numerous corruption charges were laid against the family, the delisting of their holding company after the loss of auditors and sponsors, and preservation orders were obtained by the Asset Forfeiture Unit, including for money from Westdawn, the Gupta company that leases the jet.
EDC welcomed the order, which the Guptas are expected to appeal. The Guptas had argued that EDC unlawfully cancelled its loan agreement after they had inadvertently defaulted on a repayment in October last year because the Bank of Baroda had failed to make the payment.
The payment was later made but the Guptas could make no further payments because the bank cancelled the loan agreement, citing reputational damage. The Guptas still owe the bank $27-million.
- Additional reporting by BDLive