Canadian bank lent controversial South African family $52M for a luxury jet, which is now missing
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 to buy a luxury jet, who then defaulted on the loan and hid the plane after a string of political corruption scandals.
The Gupta family is a wealthy South African family of Indian descent who owns a business empire spanning several industries including media, mining and equipment. The family has been accused of having a corrupt relationship with the region’s former president, Jacob Zuma. The Guptas and Zuma have consistently denied any wrongdoing.
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The EDC had been helping Bombardier Inc. secure the jet sale, but said in December 2017 that it had scrapped the deal after the Guptas failed to meet loan repayment requirements in the weeks prior, and 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.
The EDC said in a statement that the family defaulted on the loan back in October and still owes the bank $27 million. In addition, the EDC is concerned that the plane has been used to help members of the Gupta family escape legal repercussions.
The Gupta family’s alleged corruption started a chain reaction of political scandals that forced former president Zuma out of office, and an arrest warrant is still outstanding for one of the family’s three brothers, Anjay Gupta.
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“There is a very real concern that the aircraft may be used to escape justice or for some unlawful means,” wrote EDC in an application to a South African court asking for permission to ground the jet.
However, the EDC hasn’t yet been able to locate the plane. According to reports from the Washington Post, the Guptas made the aircraft’s location data private after the EDC’s court filing requested the plane’s exact location.
The plane is listed as missing on the site FlightAware, which allows the public to track the location of planes around the world, though its location data is not available for public tracking. The site states that the removal of public tracking data for the aircraft was requested by the owner.
The Washington Post reports that the plane has been spotted in recent weeks in India, Russia and Dubai. The EDC is likely to find the plane eventually due to an international agreement allowing the lenders to seize a plane in any country that’s part of the pact, Toronto-based aviation lawyer Ehsan Monfared told The Post.
However, Kathy Keenan, the director of Above Ground, a Canadian human rights and development nonprofit told the Post that the loan still represents an embarrassing decision for the agency.
“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.”
Global News reached out to EDC, who confirmed that they are in legal procedures to locate the aircraft but would not comment further as the proceedings are ongoing.
— With files from Reuters
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