South African prosecutors moved to freeze the assets of suspected allies of the politically connected Gupta family more than a year after the nation’s top graft ombudsman outlined the depth of state looting in the country.
The National Prosecuting Authority is targeting U.S.-based consultancy McKinsey & Co. and South African financial services firm Trillian Capital Partners Pty Ltd. for what it says was unlawful work for the state power utility.
It’s expected to be the first of many moves to tackle corruption more broadly. Trillian used to be majority-owned by an ally of the Guptas, who were accused by former Public Prosecutor Thuli Madonsela of wielding undue influence over the government to make money.
The three Gupta brothers, who are friends with President Jacob Zuma and in business with one of his sons, are alleged to have used those relationships to win contracts from state companies and influence government appointments. They and the Zumas have denied wrongdoing.
The NPA’s move “is good news, because people were becoming despondent as nothing was being done about corruption in the country,” Madonsela said by phone on Wednesday. “I hope that the bad guys will be taken to task and that people will start thinking twice before engaging in corrupt activities.”
The court filing by the NPA was made just two days before South Africa’s ruling African National Congress elected Cyril Ramaphosa as its new leader, picking him over Zuma’s preferred candidate and ex-wife Nkosazana Dlamini-Zuma.
Ramaphosa, 65, is now on track to become the country’s next leader and has promised to fight corruption as one of his main priorities, helping the rand rally by almost 6 percent against the dollar since his victory. The currency was little changed at 12.3099 per dollar by 7:23 a.m. in Johannesburg on Thursday.
“Ramaphosa has enjoyed a warm welcome by capital markets,” Adrian Saville, chief executive officer of Johannesburg-based Cannon Asset Managers, said on Wednesday. His “point of departure is rooting out corruption and purging the malicious agents of state capture. The steps taken by the NPA are pivotal to restoring the institutional credibility that has been decimated under Zuma’s presidency.”
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