Biglaw Firm Facing Public Corruption Investigation

Mega international firm Dentons is facing a public corruption investigation in South Africa. Officials there are looking into the massive fraud under former President Jacob Zuma and his associates, the Gupta brothers. The Guptas are wanted for a practice of “state capture,” using their network of family businesses to get public contracts through their relationship with Zuma.
South Africa’s Judicial Inquiry into the corruption, the Zondo Report, notes payments made to Gupta-controlled companies in connection with the firm’s work on behalf of state energy company Eskom. As reported by RollOnFriday:
Explaining how the payments came to be made, Dentons Africa CEO Noor Kapdi testified that Rafique Bagus, a client, agreed to ‘advertise’ Dentons to the public sector (a claim Bagus disputes).
The alleged arrangement blossomed when Dentons was appointed by Eskom to undertake a forensic investigation into allegations of internal corruption in 2015.
Kapdi testified that when he contacted Bagus to thank him and organise remuneration, Bagus told the partner he didn’t need to be rewarded – but that a third party would be in touch.
Kapdi was subsequently contacted by Gupta henchman Ashok Narayan, who directed him to pay Fortime Consultants. Unfortunately for Dentons, Fortime was the “laundering vehicle used by the Gupta Enterprise to receive kickbacks on public contracts”, said the Zonda Report.
Eskom paid Dentons R20m (roughly £900k) for its work, and the law firm paid Fortime R1.2m (£50k).
A similar paper trail was left when Dentons did work on behalf of state-owned defense contractor Denel.
The Zondo Report notes this payment scheme “points to irregularity.” It continues, “In both cases, the ‘marketing fees’ paid by Dentons to Fortime were only negotiated after the relevant contracts had been awarded.” To boot, the firm was “unable to produce any marketing material or reports that Mr Narayan or Fortime had ever produced for Dentons.” Which led the Report to the following conclusion, “it appears that the ‘marketing’ work performed by Mr Narayan could only have been influence peddling.” And it described the money flow from Dentons as, “expenditure tainted by State Capture.”
A spokesperson for Dentons said the firm was cooperating with the investigation, “Dentons South Africa has cooperated fully with all government inquiries into its legal work for Eskom in 2015, and will continue to do so on a going forward basis.”
Dentons isn’t the first Biglaw firm caught in this investigation. In 2017, Hogan Lovells “found its name connected to State Capture as a result of work that former partners performed… on an employment matter” and expressed “regret that our work was associated with State Capture.”
Kathryn Rubino is a Senior Editor at Above the Law, host of The Jabot podcast, and co-host of Thinking Like A Lawyer. AtL tipsters are the best, so please connect with her. Feel free to email her with any tips, questions, or comments and follow her on Twitter @Kathryn1 or Mastodon @[email protected].