The Department of Justice and Correctional Services has confirmed the arrest of alleged State Capture masterminds Rajesh and Atul Gupta at Dubai in the United Arab Emirates (UAE).

Last year, the National Prosecuting Authority (NPA) confirmed that the International Criminal Police Organization (Interpol) had issued red notices for the two brothers.

Now, discussions on the extradition of the brothers back to South Africa are expected to get underway.

"Discussions between various law enforcement agencies in the UAE and South Africa on the way forward are ongoing. The South African government will continue to co-operate with the UAE," the department said.

According to an NPA statement released in July last year, the brothers are wanted in South Africa in relation to the R25 million Nulane Investment fraud and money laundering case.

"The case relates to procurement fraud involving R24.9 million, paid between November 2011 and April 2012 by the Free State Department of Agriculture (FSDoA) to Nulane Investment 204 (PTY) LTD, a company owned and controlled by Iqbal Sharma.

From there, the funds were diverted to Islandsite Investments 180 (Pty) Ltd (Islandsite), a company owned and controlled by the Gupta family.

"The R24.9m was purportedly paid to Nulane to conduct a feasibility study for the Free State Province's flagship Mohoma Mobung project, on the basis that Nulane had unique skills to perform the work.

"The group is charged together with three companies, Nulane Investment 204 (Pty) Ltd, Wone Management (PTY) LTD, Pragat Investment (Pty) LTD, Islandsite Investments Pty Ltd," the NPA said at the time.

The other accused in the case are former government and state entity officials, former Transnet board member Iqbal Sharma, former Free State head of Department for Rural Development Peter Thabethe, former head of FSDoA Limakatso Moorosi, former FSDoA Chief Financial Officer, Seipati Dhlamini and Nulane Investment employee Dinesh Patel.