Gupta-linked company scores in multi-billion rand govt tender: report
Gupta-owned group VR Laser has scored big in a multi-billion rand government contract through state-owned defence company, Denel, the City Press reported.
The contract in question is for 238 Badger vehicles, valued at R10 billion, awarded to Denel in November 2013.
According to the report, Denel Vehicle Systems would be responsible only for the construction of the vehicles, while Gupta-linked VR Laser would do the steel cutting.
Ajay Gupta’s eldest son – Kamal Singhala – is a director of the company.
Denel spokesperson Pam Malinda said VR Laser is a steel-cutting specialist, and that Denel followed the necessary procedures to award the contract to the company.
In 2013, DAM MP David Maynier said the total cost of the 238 vehicles being acquired was not known, but was estimated to be R10 billion.
“This means that each Badger infantry combat vehicle could cost approximately R42.5 million,” he said.
The contract is on top of a recent partnership between VR Laser and Denel, which is currently pushing ahead, despite claims from Treasury that it is illegal.
This week, Treasury said that the directors of Denel will face charges of financial misconduct if they move ahead with a new joint venture with VR Laser.
However, Denel maintained that all legal processes had been followed when it had set up a joint venture with the Gupta-associated company. The groups said that there was a misunderstanding on finance minister Pravin Gordhan’s part, and that the deal would thus proceed.
Treasury said that it had not yet approved the deal, making it illegal if it proceeds.
According to the City Press, while Denel is a 51% stakeholder in the partnerships, millions of rands will be paid in commission to marketers and agents in Asia, reducing profits.
Many of the outside companies involved including VR Laser Asia – which has one shareholder who is allegedly an affiliate of the Gupta family – who stands to reap massive profits from the deals.
You can read the full story in the City Press for 17 April 2016.
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