18.07.2017

Crane companies accused of bribes

A South African investigative news outlet has accused China’s Shanghai Zhenhua Heavy Industries and Liebherr of paying what amounts to a bribe or kickbacks to the influential Gupta family, in order to win port crane contracts from state owned Transnet.

The claim cites numerous transactions from the two companies to various consultants and intermediaries and then ongoing transactions from those companies to the Gupta family , supposedly in order to secure the relevant tenders. In the case of Shanghai Zhenhua it was for seven tandem-lift ship-to-shore cranes in 2011, for the container terminal at Durban harbour in a deal worth $92 million. For which the reports says it paid a total of $4.2 million in kickbacks, 19 percent of which was skimmed off by the intermediaries.

The Liebherr deal was for four 65 tonne ship to shore cranes and 18 rubber tyred gantry cranes - See 22 Liebherrs for Africa - and was transacted through Liebherr Africa with the support of the Liebherr Killarney plant in Ireland. This was not the first order from Transnet which already operated nine Liebherr cranes at its facilities.

The news outlet claims that Liebherr paid R55 million ($4.25 million) through various intermediaries, one of which was a 2015 down payment on a feasibility study to a subsidiary of advisory firm Regiments Capital.

A spokesman from Transnet said: “The company is conducting its own internal enquiry and will investigate all allegations made. Where appropriate, it will enlist the services of independent experts, depending on the required expertise.”

Shanghai Zhenhua has so far declined to comment, while Liebherr was quick to confirm that any such payments are totally contrary to its ethics and principles and denies any relationship with the Guptas. It has also issued a statement confirming that it has launched a full investigation into the claims and hopes to be able to update on its finding in the next week or two.

The full statement from Liebherr (translated by us from German) is as follows:

"In a report published on 17 July 2017, the investigative South African journalist group Ama Bhungane refers to Liebherr Container Cranes Ltd based in Killarney, Ireland and the company Accurate Investments Limited. Ama Bhungane informed us in advance of the publication.

We take the allegations made in the report very seriously. The business practices described are unacceptable to us. The commitment to integrity and the commitment to fair competition on the world's markets are an integral part of our core values. They are essential to the identity of the Liebherr Group. Our business partners, customers and employees as well as the general public and the media are rightly looking forward to the events.

We shall, therefore, fully investigate and clarify the processes in question and their background. We have already initiated the relevant steps in the process. Currently, we expect the results to be available to us during the next week. We apologise for not being able to comment on the matters in question."

Other companies that the Daily Maverick/Amabhungane & Scorpio claims have made kick backs to the Guptas include: SAP, McKinsey, China South Railway and a number of telecoms suppliers.

The Gupta family is an Indian-born South African business family whose most notable members are the brothers Ajay, Atul, Rajesh ‘Tony’ Gupta as well as Atul Gupta's nephew Varun Gupta. They have a controversially close relationship with South African president Jacob Zuma and own a business empire spanning computer equipment, media and mining. In 2016 Atul Gupta was named the seventh wealthiest person in South Africa with an estimated net worth of R10.7 billion ($ 773.47 million), based on JSE-listed holdings.

The original story can be seen www.dailymaverick.co.za