OUTA takes on the Guptas’ banks

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Published Jul 13, 2017

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Johannesburg - The Organisation Undoing Tax Abuse (OUTA) is

closing the taps on the Guptas' finances by taking action against their banks,

the Bank of Baroda and the State Bank of India, for failure to comply with

the banking laws.

Chief Operations Officer of OUTA

Ben Theron said “We have compiled evidence to take action against these banks

and handed it to the Registrar of Banks and the Financial Intelligence Centre

(FIC)”.

“We want these authorities

to act to ensure that the Bank of Baroda and the Bank of India cease all

business with the Guptas, and revoke their licences to trade within South Africa.”

In August 2016, the FIC

listed 72 suspicious transactions on Gupta-linked bank accounts, which took

place from December 2012 to June 2016 and involved a total of R6.839 billion;

various banks subsequently closed the Guptas bank accounts.

OUTA's investigation found

suspicious financial transactions predating that list, from 2002 and stretching

over years.

“We found that the

businesses linked to the Guptas bought properties over more than a decade for a

total of R245 million – more than R50 million was paid in cash – but managed to

get bonds on these properties totalling nearly R1 billion, an amount that far

exceeds the value of these properties.

The Bank of Baroda provided

bonds valued at R811 million and the Bank of India provided bonds of R176

million; the remaining R11 million came from FirstRand. The transactions linked

to the Bank of Baroda and the Bank of India is particularly problematic,” said Theron. 

Theron said some properties

appear to have had massively inflated values. For example, the Guptas’

company Islandsite 180 bought two Cape Town flats in 2006 for R2.8 million each

and two years later the Bank of India generously provided bonds of R24 million

on each flat. This is 8.5 times the purchase price. 

Read also:  Another bank closes Gupta accounts

“In another instance, the

Guptas’ company Confident Concept bought a farm in Mpumalanga for R40 million

but a year later this was bonded by the Bank of Baroda for R426 million: more

than 10 times the purchase price.

These bonds are apparently

still active,” said Theron .

OUTA asked the financial

authorities to investigate these deals. OUTA is

#ArrestingStateCapture by taking action against those who have deliberately

aided or participated in the capture of the South African state.

 BUSINESS REPORT ONLINE

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