OUTA lays corruption charges against Daniel Mantsha

The case was opened at Brooklyn police station on 30 August 2017.

“Dan Mantsha sold out his country to pay his municipal bill,” says Ben Theron, Chief Operating Officer at the Organisation Undoing Tax Abuse (OUTA). 

“He tried to give the Guptas access to South Africa’s defence technology business, thereby handing them billions of dollars in lucrative deals. He shared confidential government documents with the Guptas and took favours from them in trips to India and Dubai.

“Why is a man like this still allowed to chair the Denel board? In our opinion, the Public Enterprises Minister Lynne Brown should fire him.”

Mantsha was appointed as chairman and non-executive director of the state-owned entity Denel on 24 July 2015. Denel is involved in the defence and security industry, developing and producing defence equipment and with an annual revenue of R8 billion.

As soon as he was appointed, Mantsha started working with the Guptas to share with them his access to this lucrative defence industry. He attempted to tie Denel into a deal that would have given the Guptas access to billions of dollars in defence deals in Asia.

Mantsha seems to have been in financial difficulty when he was appointed to Denel and apparently found the Guptas useful.

Ten days after joining Denel his office emailed the Guptas the municipal bill for his Joburg home – “for your urgent attention” – which was three months in arrears and had reached R14 238. Presumably the Guptas paid it to keep his lights on.

The next day, the CEO of VR Laser emailed Tony Gupta a draft of a joint venture agreement between Denel and VR Laser. VR Laser was owned by the Guptas, their friend Salim Essa and President Jacob Zuma’s son Duduzane Zuma.

This agreement, which went through various drafts emailed to Tony Gupta over the next few weeks, would set up a joint venture between Denel and the Guptas’ business VR Laser. The joint venture would be called Denel Asia, be registered in Hong Kong and trade in the Asian defence industry. KPMG would do the paperwork in Hong Kong and act as accountants for the joint venture.

Mantsha’s role was to try to sell this joint venture to the National Treasury and Ministry of Public Enterprises.

They claimed the joint venture had the potential to do business in Asia to the value of $9.2 billion over five years.

VR Laser would put up R100 million in operating expenses for five years (as a loan to the joint venture); Denel would “make available” to the joint venture “all products manufactured by Denel in South Africa, for manufacturing and sale, and shall transfer all information in regards to these products to the company”. Although it was supposed to be a joint venture, VR Laser had full responsibility to “execute all functions in regards to fabrication, manufacturing and operational aspects”.

The deal blocked Denel from doing any deals by itself, giving the joint venture priority.

That meant that for R100 million, the Guptas would get access to all Denel products, be in charge of deciding what business to do and be in line for half the profits on $9.2 billion.

The deal gave each party first option on the other’s shares, if one wanted out. If one side decided the other had breached the deal, it could force the other to purchase its shares at 120% of value, or force the other to sell its shares to them at 70% of value. KPMG Hong Kong would set the value.

“The JV was heavily in favour of the Gupta family,” says Theron in the affidavit.

Mantsha acted for both Denel and VR Laser.

“This constituted a gross conflict of interest,” says Theron.

“The Guptas’ advantageous position can be directly attributed to Mantsha’s personal involvement.”

While this deal was being set up, Mantsha travelled to India in August 2015 and again in October 2015, then to Dubai in January 2016, all at the Guptas’ expense.

“There is no evidence suggesting that Mantsha was authorised to travel to Dubai, although it would seem that the trip was business related. The dealings that ensued between Denel and various Gupta entities can be measuredly attributed to Mantsha’s sinister relationship with the Gupta family,” says Theron in his affidavit.

Mantsha tried to get Minister Brown and then Finance Minister Nhlanhla Nene to sign off on the new enterprise but they resisted. He tried again during Des van Rooyen’s first day as Finance Minister.

The deal was exposed in the media and ultimately blocked.

Mantsha’s role in this has been known and, despite this, he remains chairman of Denel.

Case Documentation:

Affidavit

Annexure SF1 - SF9.3

Annexure SF9.4 - SF11