Johannesburg - Nedbank
Group said South African Mines Minister Mosebenzi Zwane urged the lender to
reconsider its decision to sever ties with companies tied to the Gupta family,
who are friends of President Jacob Zuma and in business with his son.
Nedbank, in a
letter to Oakbay Investments dated April 7, said a continued relationship with
the Gupta-controlled company would “create material business risks that could
pose significant reputational risks,” according to an affidavit filed in the
Pretoria High Court by CEO Mike Brown on Monday. It gave the company 30 days to
find alternative bankers.
After the
country’s four biggest banks closed their accounts earlier this year, the
Guptas asked Finance Minister Pravin Gordhan to intervene. Gordhan went to
court in October seeking an order stating that he can’t prevent banks from
cutting clients. The lenders, including Standard Bank Group, Barclays Africa
Group and FirstRand, have said they agree with Gordhan’s stance. Nedbank has to
consider international banking rules on anti-money laundering, bribery and
corruption when dealing with customers, Brown said in the court papers.
Terminate accounts
Brown agreed to
meet Zwane in May as the minister had been appointed to head an inter-ministerial
committee that also included Gordhan and Labour Minister Mildred Oliphant to
probe why the banks stopped doing business with the Guptas. Zwane told Brown
that the finance and labor ministers were aware of the meeting and had mandated
him to proceed in their absence.
The meeting
included Communications Minister Faith Muthambi and Mzwanele Manyi, an
adviser to Muthambi and a former government spokesman, according to an e-mail
from the committee secretary that was attached to the affidavit. The e-mail
also claimed that Oliphant attended the meeting when she hadn’t, Brown said.
Read also: Platinum miners ditch Gupta firm
“The overall
impression I came away with was that the purpose of the meeting was to
determine whether there was a co-ordinated decision among the major South
African banks to terminate the accounts of persons affiliated with the Gupta
family,” Brown said, “and whether Nedbank would consider engaging with the
relevant entities as their primary banker.”
Zwane’s
spokesman didn’t immediately respond to a phone call and e-mail seeking
comment.
Zuma “reprimanded”
Zwane after the minister issued a statement in September that the cabinet had
decided to set up a judicial investigation into the country’s banking industry
following the decision to close the Guptas’ accounts. The presidency said on
September 2 the statement was issued in Zwane’s personal capacity and didn’t
reflect the views of the cabinet.
BLOOMBERG