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National Treasury asks court to dismiss #Vardospan's application

Business Report
Cape Town – National Treasury on Thursday asked the Pretoria High Court to dismiss an urgent application by Vardospan, a company with links to the Gupta business empire, to press Finance Minister Pravin Gordhan to decide on its bid to buy an overseas bank.

The director-general of finance, Lungisa Fuzile, argued in court papers that the minister could not be forced to make a decision before Friday, simply because it was the date fixed as the deadline for Vardospan to conclude a deal with Pitcairns Finance, the Luxembourg based holding of Habib Overseas Bank.

He noted that there were complex considerations at play, given the fact that Vardospan had been set up expressly for the planned acquisition and had no track record. The authorities therefore had to perform rigorous checks, made more complex in that National Treasury had difficulty in obtaining relevant information from Vardospan.

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The director-general of finance, Lungisa Fuzile, argued in court papers that the Finance Minister could not be forced to make a decision before Friday. File picture: Simphiwe Mbokazi

The company, set up by Hamza Farooqui and Gupta associate Salim Essa, had adopted a "leisurely approach" to supplying information relevant to the application for the acquisition.

The South African Reserve Bank had not had a response to a request for the latest audited financial results of Tegeta Exploration, Trillion and VR Laser Services, the companies on which Essa's financial profile rested, Fuzile said.

He also noted that applications for transactions such as the one in question usually took up to four years. Vardospan signalled its intention to buy Habib Overseas Bank in August last year. The company filed its court application on Monday, while Gordhan and Fuzile were in London on an investor roadshow – interrupted when President Jacob Zuma abruptly ordered them to return to South Africa.

Zuma has not explained the decision, but the South African Communist Party on Thursday confirmed being told by the president that he wanted to fire Gordhan. Fuzile said that in the limited time given by Vardospan, it was not possible for Gordhan to respond properly to their demand.

If he were forced to make a decision by Friday, he added, it would not be possible to approve the acquisition because of the outstanding information that the company has not yet given. Vardospan's bid to buy the bank is widely seen as search out of a predicament for the Gupta family after four local commercial banks closed their accounts last year.

Gordhan has said in an another case before the same court, in which judgment was reserved on Wednesday, that the family hounded him to use his political clout to force the banks to reconsider their decision.

In a statement issued on Wednesday, Vardospan called on Gordhan to "put up or shut up" on its plans to buy the bank.

The answering documents filed included a letter from the Reserve Bank, whose permission is also required for the proposed deal, asking the company to desist from the "unfortunate accusations and insinuations" it made it letters last month regarding its processing of the application for approval.

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