Export credit agency regrets US$41M loan to company linked to alleged corruption

Canada’s export credit agency says it regrets its 2015 decision to lend US$41 million to a South African company owned by members of a family facing corruption allegations related to their ties to former president Jacob Zuma.

In the months that followed, the agency became increasingly concerned about the loan it provided to Westdawn Investments to backstop the sale of a Bombardier luxury jet, Export Development Canada executive vice-president Carl Burlock said Wednesday.

Over that time, he said, allegations related to corruption and political interference were mounting against members of the Gupta family, which owns the company.

“We do regret this transaction, which resulted in us having a business relationship with the Gupta family,” Burlock said in an interview. “It’s true we did see risks during our due diligence prior to providing the loan and we chose to proceed. And we acknowledge now that that decision was a mistake.”

The deal was first reported by the Globe and Mail in August 2017. The Globe reported that the money helped the Gupta family, which has been closely connected to Zuma, buy a $52-million Global 6000 jet from Montreal-based Bombardier.

Export Development Canada, a Crown corporation that backs loans and provides insurance, ended its business relationship with Westdawn in December 2017.

The agency’s decision to support the purchase, Burlock said, was in line with its international commitments under the Organization for Economic Co-operation and Development. It also relied on the fact there were no formal charges or active investigations related to the allegations.

Westdawn has filed a lawsuit in the U.K. against the agency to contest the deal’s termination, he said.