Friday, March 2, 2018

Bombardier Global 6000, ZS-OAK

Johannesburg - The South Gauteng High Court in Johannesburg ruled on Monday that a Bombardier Global 6000 aircraft, which the Gupta family was leasing, must be handed over to the applicants and stored at Lanseria Airport in Johannesburg. 

The court also interdicted the family and its companies from using the aircraft. 

Export Development Canada (EDC), which operates as an export credit agency, and Stoneriver brought the application against the Guptas over a lease agreement relating to the Bombardier jet valued at $41m. 

The Guptas have a lease agreement with EDC for the aircraft, registered as ZS-OAK, but are currently engaged in a court dispute in the UK over the agreement.

EDC had asked the court in South Africa to ground the plane, until a final order was made, and to prevent its movement while the tracking system was switched off.

A Canadian bank is petitioning a court to ground a Bombardier luxury jet after a C$52 million loan issued to purchase the aircraft allegedly went unpaid. 

In 2014, Canada’s state-owned export-import bank, Export Development Canada (EDC) approved a US$41-million (C$52-million) loan to South Africa’s Gupta family for the purchase of a Bombardier Global 6000. The Gupta family is at the centre of several political corruption scandals around the former South African president, Jacob Zuma, though they have consistently denied any wrongdoing.

The EDC had been helping Bombardier secure a sale, but said in December 2017 that it had scrapped the deal after the Guptas failed to meet loan repayment requirements in previous weeks.

In addition, the EDC cited a “political exposure” risk as a factor in the decision. Under the agreement, the Canadian government’s export agency was financing 80 per cent of the C$52-million cost of the Bombardier Global 6000 with the tail number ZS-OAK.

However, the Canadian aircraft has since disappeared after a public tracking device was disabled on February 4, as stated in court documents, and the EDC is petitioning a Johannesburg court to ground the aircraft until its request to have the plane removed from the Gupta family’s possession can be heard in a U.K. court.

According to the local news outlet EWN, a lawyer representing the EDC told the court that the aircraft’s tracking device had been turned off, making it impossible to determine its location.

“Export Development Canada (EDC) is petitioning the courts to ground the aircraft,” said Phil Taylor, a spokesman for the agency, which provides Canadian exporters with trade financing.

The EDC has said in previous statements that the family defaulted on the loan in October 2017, and still owed the bank US$27-million. Furthermore, the EDC expressed concern in the statement that the aircraft had been used to help the GUPTA family escape justice from the law.

The Gupta family’s alleged corruption started a chain reaction of political scandals that forced former president Zuma out of office. An arrest warrant is still outstanding for one of the family’s three brothers, Anjay Gupta, who has been declared a “fugitive from justice.”

“All my clients want is for the aircraft to sit in a hangar somewhere so it can’t be flown to Dubai or India or somewhere,” Alfred Cockrell, EDC’s lawyer, told South Guateng high court in Johannesburg.

He added that EDC does not “want to sell this aircraft in the interim period, they just want the aircraft to be put in a safe place where it can be stored and where it cannot be used by the Guptas.”

Global News previously reached out to EDC for comment but was told the agency couldn’t speak on the matter while involved in court proceedings.

The proceedings were adjourned on Friday with judgment expected in a week or so, local media reported.

The Guptas say they have every right to fly their Bombardier jet around the world as the Canadian bank that financed it refuses to take their money. 

Export Development Canada (EDC) went to court to ground the jet because the Guptas defaulted on repayments and to stop the family from using it to commit crimes or flee from justice. The Hawks consider Ajay Gupta a fugitive after he failed to hand himself over for arrest.

But an aviation newsletter has reported the jet registered in South Africa as ZS-OAK, which was thought to be missing and hidden from creditors, flew from Dubai to Delhi on Saturday and returned to Dubai on Monday afternoon.

ZS-OAK latest flight took place just before Indian authorities reportedly conducted multiple raids on Gupta properties and offices in Saharanpur on Tuesday morning.

Last month EDC applied to the South Gauteng High Court for an urgent order to force the Guptas to return the aircraft or face having it deregistered pending the outcome of legal proceedings in the UK. The Johannesburg case is due to be heard on Friday. The Civil Aviation Authority says it will not oppose the application.

But the Guptas argue that EDC lent them $41m to buy the jet despite knowing of the reputational risks involved and wanted to seize the plane as a "face saving exercise", not because the family had defaulted on payments.

EDC’s complaint that it couldn’t keep tabs on ZS-OAK movements because its "public tracker" had been disconnected was "of no consequence" because the Guptas’ UK lawyers had disclosed the aircraft’s location to the bank.

This is contained in opposing papers filed by Gupta executive Ronica Ragavan.

In an affidavit obtained by Business Day dated February 27, Ragavan said the Guptas had defaulted only once, in October 2017, because the Bank of Baroda had delayed effecting a repayment.

Once the payment was made the bank withdrew its termination notice.

In December EDC cancelled the loan and in February it went to court to ground the jet. In its papers the bank said the Guptas had defaulted on payments "more than a dozen" times between October 2017 and January 2018. The Guptas still owe EDC $27m.

But in their responding papers the Guptas countered that Westdawn was prevented from paying the bank because it had "unlawfully" ended their lease with Stoneriver, a special purpose vehicle registered in Ireland. As a result the Guptas were "entitled to continue the enjoyment of the full spectrum of rights granted under the lease agreement".

Westdawn leases the aircraft from Stoneriver, which loaned $41m for 80% of the aircraft’s purchase price from EDC in April 2015. The Guptas paid Bombardier a deposit of $10m for the jet in December 2014 and stand surety for the EDC loan.

The Guptas had offered to exercise their right to end the lease and buy the aircraft but hadn’t received a response from EDC. Their offer would be accepted if EDC was "truly interested in their commercial interests, rather than some unspecified political agenda which they now seem to harbour against the Guptas", Ragavan said.

Other "contract breaches" EDC cited for cancelling the loan were "minor technical defaults". These included allegations that Westdawn and other Gupta companies had received corrupt payments from Estina dairy and from coal contracts with Eskom.

These presented a "clear risk of criminal, civil and reputational sanctions" for the Guptas, the bank said. Letting them continue to use the jet represents "substantial reputational harm" to EDC.

EDC was also concerned that the jet wasn’t being properly maintained.

Ragavan said it was "farcical" to say the Guptas would let the aircraft fall into disrepair after ExecuJet had cancelled its maintenance contract, as this would be "life threatening".

The only reason the bank had cancelled the loan and gone to court was because of the reputational damage it suffered by keeping the Guptas as clients, she said.

There was no case to be made for urgency, which she described as "self-created", because corruption allegations against the Guptas had been widely publicised since 2013, including in Canada. Yet EDC had done nothing to distance itself from the Guptas for several years and continued to enjoy "a commercially beneficial relationship" with the family.

The urgent court application was therefore little more than "a public relations and face-saving exercise".

Ragavan said there was no evidence that the jet had been used in illegal activity. The bank is "free with the South African criminal authorities to ensure that the aircraft is permanently seized by or forfeited to the State" for allegations that have been in the public domain for years, but hadn’t done so.

She also denied that money the Guptas allegedly looted from Estina dairy was used to pay for the aircraft, pointing out that the Asset Forfeiture unit had only frozen R6m of Westdawn’s funds, a sum "which is not material".

Ragavan herself appeared in court in connection with the Estina dairy project. She is currently out on bail. Gupta patriarch Ajay Gupta is currently regarded as a fugitive by the Hawks who have issued a warrant for his arrest. Other Gupta family members are expected to be arrested in relation to the dairy farm project and other allegations of state capture.

The application by a Canadian bank, to ground a Gupta-owned airplane, has been postponed to Friday.

The South Gauteng High Court in Johannesburg was due to hear the urgent application by Export Development Canada (EDC), the country’s state-owned export-import bank, to ground a plane being used by the Gupta family.

However, the matter was referred to Deputy Judge President Phineas Mojapelo for a special allocation and it is now expected to be heard on Friday.

It was reported at the weekend that the controversial Gupta family had defaulted on a $41-million loan for the jet, and EDC believes the plane might be used to evade justice or for other unlawful means.

News24 reported in February that the Bombardier Global 6 000 business aircraft registered as ZS-OAK, had landed in Russia.

Following this, the plane could no longer be tracked on publicly accessible flight tracker websites and apps.

The plane flew from Dubai to Zurich on December 13, where it remained for six days, before undertaking a 36-minute journey to EuroAirport Basel Mulhouse Freiburg in Switzerland.

There the plane stayed put for more than a month, before taking to the skies again on January 25.

Legal proceedings remain

It was widely reported in December that the Guptas had fallen behind in their scheduled repayments on the loan from EDC that financed ZS-OAK, and that the plane was grounded.

It also isn’t clear if the Guptas were able to make a payment leading to the release of the aircraft after that, but Phil Taylor from the EDC told News24 at the time that the legal proceedings they have against the Guptas were still proceeding.

“Our position has not changed,” Taylor said.

The EDC, which provided a soft loan for 80% of the finance required to buy the jet, had instituted legal action against the Guptas for defaulting on their payments and wanted to seize the aircraft to settle the outstanding debt.

EDC provides finance to international customers to buy Canadian products.

Last month, News24 reported that Ajay Gupta was a fugitive from justice, while his brother Atul signed an affidavit that formed part of his application to have a preservation order obtained against him by the NPA‘s Asset Forfeiture Unit (AFU) set aside.

The Krynaauwslust farm near Vrede in the Free State was also put under curatorship by the Free State High Court in January.

News24 reported at the time that the order reveals that the Free State’s agricultural department - under then agriculture MEC Mosebenzi Zwane - paid R220-million to the Guptas in what the AFU calls a “scheme designed to defraud and steal monies from the department”.

Canada lent a family $41 million to buy a luxury jet. Now the jet is missing

OTTAWA — If you spot a sleek Bombardier Global 6000 business jet sporting tail number ZS-OAK, Canada would love to hear from you.

The jet belonged to South Africa's notorious Gupta family, whose alleged corruption helped trigger the scandals that recently forced President Jacob Zuma out of office. But the Guptas bought the plane with help from a $41 million loan from Export Development Canada, or EDC, Canada's state-owned export-import bank.

EDC was helping Bombardier Inc., the Canadian aerospace firm, land the jet sale. But that turns out to have been a poor bet: EDC now says the family defaulted on the loan in October and still owes the bank $27 million.

And with an arrest warrant outstanding for Ajay Gupta, one of three brothers in the family, there are other worries, too. “There is a very real concern that the aircraft may be used to escape justice or for some unlawful means,” wrote EDC in a recent application to a South African court seeking permission to ground the jet.

But EDC first has to find the plane; the Guptas made the plane's location data private after EDC sought the jet's exact whereabouts in a court filing. The disappearance of the plane is noted on FlightAware, a website that allows the public to track the location of planes around the world. “This aircraft (ZS-OAK) is not available for public tracking per request from the owner/operator,” the site says. The plane has been spotted in recent weeks at airports in India, Russia and Dubai.

Ehsan Monfared, a Toronto aviation lawyer, says that the case is unusual. Most people or entities who buy business jets of that size and value don’t have credit issues, and banks like EDC make sure they’re well protected. EDC, for its part, insists it performed due diligence on the Guptas.

Phil Taylor, a spokesman for EDC, said that the bank’s motion seeking to ground the aircraft is due to be heard in Johannesburg on March 6, but he declined to comment further. A separate court case is also underway in Britain. An effort to contact the Guptas through their London law firm was not successful.

It's certainly an embarrassing incident for the bank. But Karyn Keenan, the director of Above Ground, a Canadian human-rights and development nonprofit, finds it ironic that EDC is now worried about risking its reputation when it should have known of the corruption allegations against the Guptas that were circulating in South Africa at the time of the loan deal.

“This loan should never have been made,” she told The Washington Post. “Everybody in South Africa knew who the Guptas were. They had been investigated by South African authorities.”

The good news for EDC is that it's likely to get the plane back eventually. Under an international agreement called the Cape Town Treaty, Monfared said, lenders have the right to seize a plane in any country that's part of the pact. “I don’t think the Canadian taxpayer is going to get bilked, unless the aircraft has been otherwise disposed of,” he said.

Original article ➤

ZS-OAK, the tail registration of the Gupta brothers’ jet—a powerful symbol of the family’s immense wealth and global reach—may soon be grounded.

Following an investigation by amaBhungane and Daily Maverick’s Scorpio, which ran in conjunction with several pieces in Canada’s national newspaper, the Globe & Mail, it was revealed that Canada’s Export Development Corporation (EDC), ignoring the Guptas’ political exposure, loaned the family $41 million to purchase their now infamous ZS-OAK private jet. The resulting fallout, along with the Guptas reportedly being unable to service the debt, has led to EDC cancelling the loan.

The jet was purchased from the sleaze-ridden Montreal-based Bombardier Aerospace, which has recently been involved in bribery scandals in South Africa, South Korea, Azerbaijan, and Russia, to name only a few. The #GuptaLeaks revealed that Bombardier had courted the Guptas over the course of 2014, and in December of that year helped facilitate a loan between Westdawn Investments, an arm of Gupta umbrella company Oakbay, and Bombardier Aerospace, for the purchase of a Global 6000 business jet. Subsequently, ZS-OAK has flown South African politicians around the world, included deputy president (and newly-inaugurated ANC president) Cyril Ramaphosa, who in 2015 used the jet to attend a junket in Japan.

EDC is mandated to help facilitate Canadian business abroad. On paper, there is nothing especially notable about the lender—most countries have some version of an export development agency (EDA), which provide a range of financial instruments, including loans, bridge financing and insurance, to local manufacturers. But export development agencies are subject to scant international oversight, and they are a significant source of the dark money that flows through the global economy.

EDC is one of the biggest of its kind in the world, behind only China’s Exim Bank, and neck-in-neck with Japan’s EDA. The agency provided over $100 billion in financial services to Canadian companies and their clients in 2016. Traditionally, it has financed companies in Canada’s bread and butter industries—mining, oil and gas. Lately, however, it has underwritten Canada’s tech boom and, to a much larger extent, its big manufacturers. Bombardier is probably one of its greatest beneficiaries, having received around $5 billion in services over the course of 2015 alone.

Despite being an arm of the Canadian government, and notwithstanding Canada’s squeaky-clean international reputation, EDC is an opaque organisation that has consistently refused to institute more robust disclosure practices. No one in Canada, including the minister that oversees the agency, knows precisely how much it provides and to whom, and nor does it disclose the methodology behind its due diligence practices. This renders it a financial black hole—every year, it pumps over $100 billion into the global economy, from companies like scandal-plagued miner Kinross Gold, to two-bit operations like Westdawn, with much of that money being untraceable.

When asked why a syndicate as toxic as the Guptas were provided $41 million to buy a luxury jet, EDC spokesperson Phil Taylor, would not comment on specific transactions because, “the law does not allow EDC to disclose third party information without the consent of the obligor.”

He said in an email that, “in the case of allegations, EDC will undertake enhanced due diligence to better understand the situation (for example, are the allegations politically-driven, are they coming from a business competitor, and, conversely, are they leveled by formal authorities, is there a formal investigation, etc.) Where the facts surrounding the allegations cannot be determined or substantiated, EDC will then work directly with the obligor to research and document the issue to the satisfaction of EDC or the transaction does not go forward.”

In other words, the Guptas would be called on to investigate Guptas, an arrangement unlikely to result in success as far as disclosure it concerned.

Three days ago, a lengthy expose on EDC, written by this reporter, was published online by Walrus Magazine, a Canadian general interest periodical. A day later, according to a front-page article in the Globe & Mail on Thursday, EDC announced that it would be rescinding the loan, and may take steps to repossess the aircraft should the brothers continue to miss payments, and should they be unable to refinance.

ZS-OAK is currently in Basel, Switzerland, following a lengthy sojourn in Dubai. The Guptas may be forced to leave it there, and fly steerage back to Dubai. That is unlikely to upset many South Africans, but it is a small indication of how far the family has fallen over the course of this tumultuous year.

Original article ➤

1 comment:

Anonymous said...

South African Taxpayers see Guptas jailed.
That's a good headline.
The rest is just wasting time.