Leaked mails of South African Gupta family talk of selling arms company Denel to Adani

NEW DELHI: A series of leaked emails from the Gupta family that has taken South Africa by storm have revealed that discussions were on between Denel and the Gautam Adani Group to set up a company to produce arms and ammunition in India.

Denel was banned in India till 2014 on charges of corruption and has not been able to make a comeback. The Gupta family controls the South African Sahara Group which has been under the scanner for its close relations with the President Jacob Zuma regime.

In a series based on leaked internal communications, the South African Daily Maverick has reported that the Gupta family was trying to put together a company named Denel India, in which the Adani Group was proposed to be a significant partner.

When contacted, the Adani Group said that some discussions had taken place but were not carried through as it was not comfortable with the idea.

“Adani Group had exploratory discussions with Denel in 2015. However the Group was neither comfortable with the partners involved nor with the proposed proposition. Hence, the discussions were not taken forward by Adani Group,” a company spokesperson said in response to queries by ET.

Several industry sources that ET spoke with confirmed that the Gupta family was actively looking for Indian partners through an entity named Denel Asia that was set up in Hong Kong. At least two Indian business houses had declined to deal with the entity, despite its presence at several defence fora, including the Defence Expo held in Goa in 2016.

The Adani Group said that it did not pursue the matter and has not relationship with Denel at all.

“This is common in defence or any other business where everyone talks to everyone but business is pursued only after rigorous due diligence. Adani Group has no relationship with Denel,” the spokesperson said. Quoting leaked emails, Daily Maverick has reported that the proposed Denel India was to have a 33% stake by Adani Enterprises. The report also says that Kolkata businessman Parasmal Lodha, who was arrested by the Enforcement Directorate in December last year was involved in some of the discussions between the Gupta’s and the Adani group.

Denel was banned in India for almost ten years as the CBI probed charges of corruption against in in the purchase of antimaterial rifles by the Indian Army used to take down enemy bunkers.

The CBI probe was closed in 2013 after it could not substantiate charges that a commission was paid for securing the deal.