Guptas jet to be reposessed??

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happyskipper
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Guptas jet to be reposessed??

Unread post by happyskipper » Thu Dec 21, 2017 9:48 am

The Gupta jet registered as ZS-OAK faces being impounded as the Saxonwold family, close to beleaguered President Jacob Zuma, appears to have run out of money to make scheduled repayments.

The Financial Mail has reliably learnt that the Canadian government’s export credit agency, which provided a soft loan for 80% of the finance required for the jet, has instituted legal action against the Guptas for defaulting on their payments.

The agency, Export Development Canada (EDC), promotes the growth of Canadian businesses abroad by providing finance to international customers who buy products from that country.

The Canadian company appeared to be offering a generous deal to the family when the firm was bidding for state contracts in SA

Documents contained in the Gupta e-mail leaks show that by October 14, when the next US$1.4m payment for the aircraft fell due, the Guptas still owed $28.3m to EDC.

Sources in the aviation industry told the Financial Mail that EDC had in November grounded the aircraft at Lanseria airport for 48 hours "due to non-payment".

"It would appear that a bank (unknown to us) provided the guarantee of funds and the
EDC released the aircraft".

This was confirmed by another source.

Flight records for ZS-OAK show that, since it departed from Lanseria, the aircraft travelled mostly between India and Dubai, where the Guptas have property and business interests.

But on December 13 it flew from Dubai to Zurich, where it remained for six days before taking a 36-minute hop to EuroAirport Basel Mulhouse Freiburg in France on Tuesday evening.

Asked this week if the Guptas have defaulted on their loan, EDC spokesman Phil Taylor confirmed that the Canadian lender has cancelled the finance agreement.

"EDC monitored the performance of the transaction, as it would for all of its counterparties," Taylor says.

"Consistent with EDC’s underwriting principles and policies, we exercised our contractual rights and the transaction was terminated."

He declined to comment further.

However, the Financial Mail understands that the Guptas are currently embroiled in a legal dispute with EDC, which apparently wants to seize the jet to settle the outstanding debt.

The Gupta family had not responded to e-mailed questions by the time of going to print.

The Gupta e-mail leaks contain several revelations that raise uncomfortable questions about the business dealings of both Canadian aircraft and train manufacturer Bombardier and EDC with the Saxonwold family.

They show that in 2015, despite being aware of the political risks attached to the Gupta family, EDC funded $41m towards the purchase price of the Gupta family’s now infamous Bombardier Global 6000, registered as ZS-OAK.

The aircraft was used to fly cabinet ministers and parastatal bosses who furthered the Guptas’ business interests around the world, including to Mumbai and Dubai, where several were put up in luxury hotels.

The leaks further reveal that in 2016, a year after the Guptas bought ZS-OAK and amid an international outcry at allegations of the family’s role in state capture, Bombardier was putting the finishing touches to the sale of a second Global 6000 to Gupta companies.

Zuma’s son Duduzane Zuma was involved in this deal.

Though this sale never materialised — apparently because the Guptas were running short of funds — the negotiations documented in the leaked e-mails show the degree to which Bombardier was comfortable doing business with a family deeply mired in highly publicised corruption allegations.

In fact, negotiations for the sale of the first Global 6000 were being finalised eight months after the Guptas first hit international headlines for commandeering a military airbase to fly in guests for the wedding of a relative in Sun City.

The e-mails indicate that Bombardier appeared to be offering a generous deal to the family at a time when the Canadian company was bidding for state contracts in SA.

In 2013, when Bombardier first offered to sell the Guptas the aircraft, US-based Flying Magazine gushed that "this kind of beauty and capability comes, not surprisingly, with a breathtaking price tag — the Global 6000 starts at about US$58.5m, a bit more if you want the shower".

In 2014, the list price was $60.5m. It increased to $62.3m in 2015.

However, in February 2014, Bombardier offered the Guptas a "revised price" of $52m.

The aircraft company also increased the number of pilots it offered to train from two to three and provided credit memos worth $1.35m, along with extras and "special customisations" for the jet worth $2m.

On February 19 2014, Trevor Lambarth, Bombardier’s vice-president for aircraft sales in Europe, e-mailed Ajay Gupta, thanking him for the "hospitality and kindness" he’d shown him and Bombardier’s Africa sales director, Hani Haddadin, during their visit a few months earlier.

Since then, Lambarth and Haddadin had held discussions with potential financiers, including a private equity firm based in Chicago, in the US.

An internal Bombardier e-mail says the funders were "okay, broadly, with the politically connected nature of the Guptas".

Lambarth’s e-mail to Atul Gupta concludes with the hope that clinching the deal "will lead to further opportunities for our organisations to explore working together, whether on infrastructure or aviation-related business".

Another funder "broadly okay" with the Guptas’ political connections was EDC.

A repayment schedule and sale agreement contained in the leaks shows the agency loaned the Guptas $41m at preferential rates.

The first of 28 instalments fell due in July 2015.

By then, the Guptas and close business associate Salim Essa, who is widely regarded as a front for the family, were already shopping for a second Global 6000 and hoping to secure the funding from EDC again.

In June 2015, Haddadin sent an e-mail to Ronica Ragavan, CEO of Gupta holding company Oakbay Investments, following their discussion about buying another aircraft.

"I am excited to be able to offer Mr Gupta a second aircraft to meet their growing travel needs," Haddadin wrote.

"Adding a second aircraft from a common fleet [will] have significant advantages to your daily operations, fleet commonality among others."

He added he was "currently in discussion with EDC bank and [would] be reverting back shortly with the steps going forward".

Eight months later, in February 2016, Haddadin e-mailed Ragavan again, asking the Guptas to approve the colour scheme for their second Global 6000.

By then, the Guptas had already become embroiled in a series of highly publicised corruption scandals involving Jacob Zuma and his family, with major banks closing their company accounts after flagging suspicious transactions over a year earlier, that were suggestive of money laundering.

"Following my meeting with Mr Salim [Essa], please find attached the exterior paint concepts, as requested," Haddadin wrote in the e-mail, dated February 19 2016.

"Kindly confirm which of the options they approve."

Ragavan forwarded the e-mail to Essa, Rajesh "Tony" Gupta and Duduzane Zuma.

Bombardier confirmed last week that the sale of a second Global 6000 to the Guptas had not materialised, without providing reasons.

The company bridled at the suggestion that the Guptas had received a discount.

"I’m sure you are well aware that business jets are rarely sold at list prices, but at market prices," spokesman Mark Masluch said.

"In fact, the price you mention here was well within a ‘normal’ sales price range for Global 6000s sold that year. Any suggestion otherwise is entirely false and lacks any factual basis."

He did not respond to a question about whether Bombardier had given any consideration to the reputational risk these sales could result in, given the controversies surrounding the Gupta family.

EDC told the Financial Mail it had been "aware of potential political exposure risk" when it decided to finance the Gupta aircraft in 2014.

"But we did not [uncover] any opportunities for the potential risk to manifest within the transaction itself," says Taylor.

"We felt that the indirect risks, which were speculative in nature, but still present within the broader corporate structure and part of EDC’s review, did not present a material risk to the transaction itself at that time."

The Gupta leaks have demonstrated that the family, alleged to have the country’s president in its pocket, had grown accustomed to running a parallel state to serve its own business interests.

But as Zuma’s power wanes, so do the fortunes of his shadowy network of benefactors.

The days when the Guptas could seemingly snap their fingers to appoint cabinet ministers who would do their bidding are over.

Their money squabbles with EDC might well be another indicator of their fall from grace.

Two years ago, the bank was eager to advance the Guptas a soft loan to buy one of the world’s most prestigious corporate jets.

Today it just wants its money or its plane back.
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Re: Guptas jet to be reposessed??

Unread post by Jel » Thu Dec 21, 2017 9:50 am

Is it / was it, still being managed by Execujet? If so they don't see to have the same moral dilemma as the banks did in dealing with the Guptas :wink:
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Re: Guptas jet to be reposessed??

Unread post by GL » Thu Dec 21, 2017 10:03 am

Impounded where? SA has still not signed the Cape Town convention. And I bet the Guptas are trading on that.
Be very interested to know if ExecuJets hangar / maintenance / pilots fees etc account is up to date.
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Re: Guptas jet to be reposessed??

Unread post by Jel » Thu Dec 21, 2017 10:52 am

The Guptas probably have the money its just the difficulty in moving it around that's all
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Re: Guptas jet to be reposessed??

Unread post by jimdavis » Thu Dec 21, 2017 12:53 pm

Jel wrote:The Guptas probably have the money its just the difficulty in moving it around that's all
I think it will still make their eyes water!

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Re: Guptas jet to be reposessed??

Unread post by Marius Schrenk » Thu Dec 21, 2017 1:18 pm

Jel wrote:The Guptas probably have the money its just the difficulty in moving it around that's all
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Re: Guptas jet to be reposessed??

Unread post by micmaq » Thu Dec 21, 2017 2:35 pm

EDC (Export Development Canada) is a Crown Corporation (state owned) export credit agency established to help Canadian companys clinch export sales and secure good paying manufacturing jobs in Canada - Since the USA no longer provides a similar service to it's manufacturers it gives Canadian companies , especially in aerospace , a competative advantage

EDC financed the purchase of a Bombardier Global 600 bizjet for the Guptas

Pity they did not research the reputation of the Guptas before making the loan - The fact that S Africa has not ratified the Cape Town Convention making it relatively easy for lenders to attach mobile assets they are financing (like aircraft) plays right into the hands of the Guptas
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Re: Guptas jet to be reposessed??

Unread post by Marius Schrenk » Thu Dec 21, 2017 2:56 pm

What ever it cost the Guptas till now to have the Jet......would be payed by.....the RSA taxpayer.....again. :twisted: Moerse nice tax deduction. :twisted:
Politics attracts crooks and lawyers,most of the time its the same person.
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Re: Guptas jet to be reposessed??

Unread post by Chimsoro » Thu Dec 21, 2017 3:00 pm

Please DO NOT repossess the aircraft until they have used it to FOXTROT OSCAR .
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Re: Guptas jet to be reposessed??

Unread post by Marius Schrenk » Thu Dec 21, 2017 4:58 pm

Eisch they "created" 7003 jobs....and a few millionaires. :roll:
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Re: Guptas jet to be reposessed??

Unread post by GLF4 » Thu Dec 21, 2017 5:08 pm

I heard Execujet gave them the boot as other client's were complaining about the Gupta jet :lol:
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Re: Guptas jet to be reposessed??

Unread post by Rotor kop » Thu Dec 21, 2017 5:17 pm

I trust and hope that they loose everything and get jail time for what they have done.
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Re: Guptas jet to be reposessed??

Unread post by Skymaster » Thu Dec 21, 2017 6:03 pm

This could put them in a bad moodly
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Re: Guptas jet to be reposessed??

Unread post by Bearcat » Thu Dec 21, 2017 6:09 pm

The current .. and hopefully soon to be booted SA Prez has been looking for an aircraft ... this one should be donated to 21 Sqd ... as taxpayers ...we have already payed for it
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Re: Guptas jet to be reposessed??

Unread post by African Flyer » Thu Dec 21, 2017 7:02 pm

Rotor kop wrote:I trust and hope that they loose everything and get jail time for what they have done.
Agree 100% =D>
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