What Is a Company Formation Agent?
Hidden assets, money laundering, tax dodging, and the firms that help make it all possible. Here’s how formation agents can facilitate abuse of the global financial system.
Members of South Africa’s controversial Gupta family have long been implicated in a series of corrupt political connections and illegal deals that have earned them millions, often in government funds. The influence of the family, now reportedly in exile in Dubai, is so all-pervasive that the affair is widely known as the “state capture scandal.”
OCCRP has previously reported how Gupta-linked firms and operators extracted money from a state transport infrastructure company, profited from a corrupt locomotive tender, exploited a compliant bank, and emptied part of a pension fund for state workers using insider information. The total amount of money allegedly stolen by the Guptas and their associates reaches into the hundreds of millions of dollars.
What’s been largely unreported is what happened to this money after it was safely out of the reach of the state.
The matter is much more than an intellectual exercise. After the country’s high court recently ordered Trillian, an investment firm at the center of the Guptas’ web, to repay 595 million rand (US$41 million) unlawfully taken from the state electricity company, it emerged that the money was no longer in the firm’s accounts.
Now, having exclusively obtained a Trillian server containing more than three million documents, including memos, invoices, and internal emails, OCCRP has been able to piece together where at least a portion of the Guptas’ millions went between 2014 and 2017.
Under Trillian’s direction, the money was cycled through a network of 10 shell companies and consulting firms that held accounts at South African and international banks. The money, which also passed through a Bermudan group of companies, ended up as far afield as India and Dubai.
Intra-company and shareholder loans appeared to be a key mechanism for the laundering of the money, which in some cases was repeatedly moved from firm to firm, obfuscating its origin.
The new findings account for how the Guptas acquired a large portion of their fortune, mainly through inflated contracts with state-owned entities such as Eskom, the state electricity provider. South Africa’s High Court has ruled that the deals were illegal. The 595 million rand ($41 million) sought by the court, and paid to Trillian in tranches, are among the newly revealed transactions.
Though Trillian is difficult to link to the Guptas directly — the family is known to work through trusted associates — exclusive, newly revealed emails appear to show one “R P Gupta” communicating personally about the deals. The name may refer to Rajesh Gupta, the youngest of the brothers.
In addition to sending millions to offshore firms, Trillian appears to have spent or laundered even more through various other schemes, including paying exorbitant service fees to consultants. By working with KF Investments, a Johannesburg-based investment firm, Trillian even managed to buy and hold shares in major global businesses including Woolworths Holdings and British American Tobacco.
The Guptas’ dealings were aided by other businesses. Stein Scop Attorneys, a Johannesburg-based law firm located near Trillian’s high-priced offices, was the attorney of choice and record for most of the deals. The firm received over 100 million rand ($7.6 million) from Trillian and held it in trust accounts.
Trillian, an unassuming investment firm once headquartered in Johannesburg’s swanky Melrose Arch neighborhood, is the key instrument of the Guptas’ dealings. Spun out of Regiments, another key piece of the empire that featured heavily in earlier reporting about the Guptas, the firm took over the company’s trade in securities.
Trillian oversaw the network of consultancies and shell firms that helped the Guptas shift their gains. According to documents found on the company’s server, it was both the sender and the recipient of the key transactions, which include millions from Eskom and other sources:
In addition to cycling money it had received from state entities, the records show that Trillian also moved tens of millions of dollars acquired by other companies in the Guptas’ network in a series of financial transactions that may have been intended to launder the money.
The company’s CFO, Tebogo Leballo, did not respond to questions. Rajesh ‘Tony’ Gupta and Atul Gupta could not be reached for comment.
Trillian and the network of shell companies it oversaw was the brainchild of two key Gupta associates: Eric Wood, a stock trader and former director of Regiments Capital, and Salim Essa, the man who would link the family to key political players. The company was created in 2015, and the two men’s relationship is widely thought to date from that year.
However, documents newly obtained from the Trillian server show that Wood and Essa first linked up at least three years earlier. In a September 2012 email to Essa with the subject line “project scoping,” Wood outlined how, working together, the two men could win business deals worth 775 million rand ($52.6 million) over a period of two months — September to November 2012 — from state companies, including Denel and Transnet (Eskom, the Guptas’ biggest financial heist, was not yet listed). The message, which is clearly part of a larger discussion, reveals that Wood and Essa — who was acting on behalf of the Guptas — were already discussing the public entities that they later exploited.
In 2013, Essa’s company, Elgasolve, formally became Regiments’ business development partner. The firms would be involved in a series of destructive deals with state entities which amassed large profits for Essa, Gupta associate Kuben Moodley — and the Guptas — who appeared to receive half of the profits.
Though comfortable with the existing relationship, Regiments’ other directors declined Elgasolve’s subsequent offer to purchase 50 percent of the company. But, unlike his Regiments colleagues, Wood was eager to deepen his ties to the family.
By spring of 2015, he and Essa co-founded Trillian with the aim of creating a vehicle that would enable them to keep all of the state money for themselves. According to an affidavit seen by reporters, the plan was to run the company only until 2019 – a period intended to correspond to Jacob Zuma’s term in office. The president and his political allies were key to making the Guptas’ state capture possible.
The early exit of Zuma from office ended Wood and Essa’s deals sooner than expected — but not without hundreds of million of dollars under their belt.
Wood did not respond to phone calls or to questions sent by email. Essa could not be reached.
In his doctoral thesis submitted to South Africa’s University of the Witwatersrand, Wood made a blunt case for an aggressive style of moneymaking. He argued that the key to success as a trader is to make high-risk investments — and not to count on having a long career. In other words: Haul in the money — and fast.
In his thesis, Wood listed a Bermuda-based company, Centaur Asset Management, as an example of a financial service provider.
But Centaur was not just any company. It was part of a group of companies conceived by the Guptas which received tens of millions of dollars from Trillian — and then agreed to “loan” 400 million rand ($27.2 million) back to the trader on Sept. 1, 2016. To build a legitimate-looking paper trail for the operation, Trillian entered into an agreement to provide financial advisory services to Centaur, which was ostensibly a mining company.
In fact, according to leaked documents from the Bank of Baroda, where the accounts involved in this transaction were held, this operation represented part of the millions the Guptas had taken from Eskom, as well as other income from state companies, such as Transnet. The money was cycled through these loans, which made no business sense unless they were designed to disguise its origins.
After arriving back in Trillian’s hands, the money was then sent on to Cutting Edge Commerce, a South African company co-owned by the Guptas.
Though there is no document showing that the Guptas owned Centaur themselves, a wealth of evidence points to the fact that it is their creation.
According to Trillian documents obtained by OCCRP, the Centaur group consists of at least seven Bermuda-based entities and one South African company — most of them created in 2014. The Guptas were copied in emails relating to the companies’ activities.
But they were run by proxies: An Indian citizen named Akash Garg, who married into the Gupta family, and a Dubai-based U.K. citizen named Daniel McGowan.
Garg’s move to South Africa with his family was actively assisted by the Guptas. Visa requests relating to the move were found in emails sent and received by Ashu Chawla, an employee of Rajesh “Tony” Gupta — a Gupta brother whom Garg referred to as “mamaji,” an Indian term of respect. The visa requests were addressed to the South African government on the letterhead of Sahara, another Gupta company. (Garg and Chawla could not be reached for comment. )
When he registered two of the Centaur companies, McGowan listed their addresses as an apartment in Dubai’s famous Burj Khalifa tower. Emails on the Trillian server show that Tony Gupta sought to purchase an apartment in the same building, presumably for Duduzane Zuma, the son of the deposed president.
McGowan’s email address at Centaur was cc’d on exchanges between Tony Gupta and Salim Essa involving the apartment. According to a realtor also included in the exchanges, the papers would be sorted by the time Duduzane arrived.
McGowan’s communications with Essa and the Guptas also show their efforts to make Centaur look like a legitimate investment firm.
In a 2014 email, for instance, McGowan writes that the company needed to hold roughly $8 million in its account to show that it had capital. This money, he wrote, “could be paid to Centaur for a day [,] we could then issue the proof of funds directly and return the money the same day.”
McGowan did not respond to requests for comment.
Invoices found on the Trillian server reveal the mechanism the Guptas used to siphon over half a billion rand from Eskom. This is the $41 million now sought by the High Court.
The first step was for Eskom to send the money to Trillian. The first payment was made precisely one day after Eskom approved Trillian as a registered supplier, raising the question of how any work done could have been assessed within 24 hours. Trillian acknowledged in its own internal documents that the company lacked credentials and the necessary skills.
After arriving in Trillian’s accounts, large portions of the Eskom money quickly disappeared into a set of consultancies and shell companies. For example, after receiving over 235 million rand ($17.4 million) from Eskom in August 2016, Trillian sent on a full 221 million rand ($16.3 million) within five days.
Two of the companies that received this money were Gupta-linked consultancies Cutting Edge and eGateway. They received the money after invoicing Trillian for work they had allegedly done for Eskom. Explanatory notes such as “data analysis,” “cost saving initiatives,” and “technical services” — with no further contracts or any additional details — point to the fact that the work was, in fact, fictitious. In total, Cutting Edge and eGateway — which was described by Trillian as housing “some of the best skills in the world” — received almost 204 million rand (over $15 million) from the state utility.”
Cutting Edge and eGateway were able to receive payment from Eskom for their “work” because Trillian had joined an Eskom contract that global consulting giant McKinsey had already won.
McKinsey flagged its new South African partner as a risk due to Essa’s presence and sought to distance itself by denying any relationship. However, it had little choice but to accept the situation — thanks in part to Eskom’s head at the time, Anoj Singh, who travelled on the Gupta’s bill to Dubai. (Meanwhile, according to Trillian’s own internal investigation — the Budlender Report — the Minister of Public Enterprises Lynne Brown denied at the time that Trillian had been paid by Eskom).
After McKinsey finally soured on its relationship with Trillian, the Guptas turned to powerful friends in government to ensure that another suitable partner would be selected.
As Trillian continued to receive government money, McKinsey became more and more alarmed at its partner’s brazen theft. Although the relationship had ended in March 2016, Trillian had begun talks with Oliver Wyman, a U.S.-based global consultancy, to replace their balking partner two months earlier.
In an email titled “Meeting 2/1 Dubai - next steps,” Essa wrote Maarten De Wit, a partner at the company, that Wood would arrange “for you guys to sit with Mo Bhobhat the chief advisor for COGTA Minister.” The email appears to be a reference to Mohammed Bobat, a former Trillian employee who had become an advisor to a government minister. Presumably, the intent of the meeting was to keep Oliver Wyman’s accession to the role of Trillian’s pliant global partner on track.
Though Bobat had joined the government in December 2015, a tax certificate for 2017 for one Trillian company shows that he was still on the company’s payroll during 2016, receiving R471,702 ($31,446) for a single month.
eGateway’s relationship with Trillian also reveals, for the first time, direct involvement by one of the Gupta brothers in the network’s questionable financial operations. The company’s email address, firstname.lastname@example.org, was overseen by someone who signed his emails as “R P Gupta.” The youngest Gupta brother is named Rajesh Gupta (though he often goes by Tony).
Emails show that correspondents considered this account to be important. In one email from July 2016, R P Gupta sends a short note of praise to a Trillian employee, thanking him for work, which he describes as “highly appreciated by Escom [sic] and Trillian.”
In response, Trillian’s employee is obsequious, referring to R P Gupta as “Respected Sir” and emphasizing that he will do what is needed.
The Guptas’ two consultancies, Cutting Edge and eGateway, received over a third of Eskom’s $41 million.
According to bank transfers found in the Trillian data, as well as invoices justifying some of these transfers, another large portion — over 100 million rand, or about $7.5 million — was sent to six shell companies based in South Africa. One of them, Pactrade, is not known to have issued any invoices.
Though these firms appeared to be independent of Trillian, they showed few signs of functioning businesses.
Three of them — Medjoul, Fortime, and Birsaa — listed the same registration address, shared the same director, and collectively deregistered in the same month: August 2017. In addition to receiving money from Eskom, they appear to have been used to receive other illicit payments from state companies: The Trillian data include invoices they filed to Transnet, Denel, SA Express and others.
Four other shells — Jacsha, Shacob, Matson and Pactrade — also shared common directors, and some shared the same addresses. Multiple invoices citing Eskom were filed by these companies in August 2016 (though Pactrade’s were not among the data). These were part of a vague “Commission Agreement” with Trillian allowing them to bill up to 50 percent for introductions to new clients and business opportunities.
The shell companies’ South African bank accounts were held at Standard Bank, ABSA and First National Bank, among others.
It is difficult to know just much the shell companies received due to the volume of Eskom cash shuffled between different entities. Documents on the Trillian server show that, between Aug. 13 and 15, 2016, the company made payments of several million dollars in Eskom money to its shell companies. It also paid 205 million rand ($15.3 million) to Trillian Capital Partners’ account at the Bank of Baroda and Trillian Shared Services’ account at First National Bank.
These accounts transferred still more back to the Gupta-linked shell companies. For example, on Aug. 18, 2016, Trillian Shared Services transferred close to 15 million rand ($1.1 million) of their Eskom take to Fortime, Medjoul, and Birsaa and 45 million rand ($3.37 million) to another Essa-linked company, Zestilor. On the previous day, Aug. 17, Trillian had agreed to pay Zestilor 200 million rand ($14.8 million) for their services, according to a document signed by Trillian’s CFO, Tebogo Leballo.
Moreover, as soon as Eskom sent the funds to Trillian’s account at the Bank of Baroda, Trillian asked the bank to send 75 million rand ($5.6 million) back. These funds may also have been intended for Zestilor. On Aug. 18, Leballo instructed Trillian to make a payment of 75 million rand ($5.6 million) to Zestilor, adding that he “would provide details later.” On Aug. 31, Ashok Narayan sent more than a dozen invoices to Leballo, which showed that funds paid to shell companies including Fortime and Birsaa were payments “to cover the R75m to Zestilor,” or $5.6 million.
The following year, Trillian carried out an internal review of Zestilor that showed that Sahara, a Gupta-owned company, was Zestilor’s only client. Emails from 2015 obtained by OCCRP show that Zestilor’s First National Bank account was aided by employees of Gupta-owned Sahara. For example, Santoush Choubey, a Sahara employee, sent an email to Salim Essa, with a copy to Tony Gupta, that showed he had knowledge of Zestilor’s financial and ownership structures. The email addressed Essa as “dear sir.”
These transactions are an important find because that Bank of Baroda account is known to be controlled by the Guptas and was also used by the family’s other shell companies.
In late 2015, as South African banks started to shut down Gupta accounts, Trillian began to open more accounts at foreign banks. In the minutes of a November 2016 meeting obtained by OCCRP, Wood said Trillian needed to “mitigate the risk of our other accounts being unfairly frozen” by maintaining accounts in South African rand at the Dubai branch of Pakistan’s Habib Bank and India’s state-owned Bank of Baroda. Yet by 2017, South African banks like ABSA and FNB continued to bank Trillian. Wood’s reference to the account closures appeared to reference the Gupta experience and not Trillian’s.
Other large payments from Trillian’s ABSA account — and using the same Eskom money — were made to the Gupta-linked Albatime, as well as to Essa and Wood (through his company Numibrite). The Gupta lieutenants appeared to profit handsomely from the arrangement.
Additional email correspondence from the Trillian server demonstrates another link to the Guptas.
The shell companies that handled the money appeared to be overseen by a single email address: email@example.com. In one instance, the owner of this account asked for payments with the all-caps demand “PLEASE CONFIRM ONCE PAYMENT IS DONE” — without attaching an invoice.
According to the records, the handler of this account, who was often simply referred to as “A,” was Ashok Narayan, at the time an employee of the Guptas’ first company in South Africa, Sahara Systems (Narayan could not be reached for comment.)
Even before Trillian was created, some Regiments employees appeared already to know that Narayan handled shell companies for the Guptas that took an even split of profits from government contracts. A late 2015 email from a Regiments employee to Narayan read, “Hi Ashok, See attached the schedule for the allocation of the payment that was done on Friday to both Fortime and Birsaa.” The attachment described a 50-50 split for money that had been received from state companies.
Through their employee, Narayan, the Guptas kept a close watch over Regiments, the emails show.
In July 2015, for instance, Wood forwarded him notice of a 14.2 million rand ($1.1 million) payment from Transnet to Regiments. In another email, Wood shared with Narayan his correspondence with Anoj Singh, the former head of Eskom, in which he advocated for Regiments to receive “market related compensation” for work done. Narayan, in turn, reported information to Essa, whom he referred to with respect as “bhai.”
Narayan is better known for his role in Homix, a company previously reported to have received oceans of cash from Regiments — but never before definitively linked to Essa. A May 2014 draft company agreement found on the Trillian server shows Homix being appointed as a “strategic technical service provider” to Regiments with the goal of producing “business opportunity.” The document’s properties show that Essa modified it as soon as it was created, showing that he was involved. By 2015, one honest employee worried by media reports asked Wood, in an email titled “Homix and Anoj Singh,” “we have paid [Homix] 200m+ in the last financial year… Can you tell me the nature of our relationship with Homix?”
Wood did not respond. Singh could not be reached for comment.
When a Trillian employee did not know who was behind the seven consultancy firms reaping hundreds of millions in Eskom money, he asked Stein Scop Attorneys – a law firm located a stone’s throw from Trillian’s offices in Melrose Arch. The firm reported that outside of directors like Ayub Vali Ali, an Indian national, the beneficial owners of the shell firms were unknown.
Stein Scop managed to become one of the biggest beneficiaries of Trillian’s government work by charging the Gupta network hefty legal fees to the tune of millions of dollars. The firm spent months prosecuting Trillian whistleblower Mosilo Mothepu, staving off investigations into Trillian, and otherwise defending the firm.
Stein Scop’s bank account held significant amounts of Trillian’s money in trust for both specified and — largely — unspecified purposes. At least a portion of this amount could represent part of the stolen Eskom millions, since the transactions were made at about the same time.
But whether it was setting up agreements with companies like Centaur or overseeing a range of opaque projects nicknamed Fusion, E2E, Mumbai, and others, Stein Scop was always available for Trillian.
Stein Scop did not appear to have many clients outside of Trillian and Regiments, if a letter from their auditor is to be believed. The letter confirms that, for the year ending at the end of Feb. 2016, Stein Scop did not generate more than 10 million rand ($619,000) in annual revenue.
When a Trillian employee sought a law firm to create and backdate a contract with Cutting Edge which had been receiving Eskom money, Trillian’s chief financial officer responded, “Please use Stein Scop, they have been excellent.”
Stein Scop did not respond to specific questions about their work with Trillian, citing client confidentiality. They confirmed that they were one of several law firms to act on behalf of Trillian, but said they withdrew representation from the firm in 2017.