Guptas fire back at Gordhan

Finance Minister Pravin Gordhan. File picture: Chris Collingridge

Finance Minister Pravin Gordhan. File picture: Chris Collingridge

Published Oct 20, 2016

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Johannesburg - The Guptas’ lawyers have come out firing against Finance Minister Pravin Gordhan’s explosive affidavit, in which he alleges they tried to harm the banking sector.

In a statement issued late on Wednesday, the Gupta-owned Oakbay, through its lawyers, Van Der Merwe Associates, argued that Gordhan is using public resources in his legal bid.

Gordhan claimed in his affidavit that Oakbay was seeking to harm the banking and financial sectors when it asked him to interfere in the private sector.

The news comes weeks before Gordhan is due to appear before court on charges of fraud over allegations that he illegally authorised an early retirement and established an illicit investigative unit when he headed the South African Revenue Service. This has been viewed as a continuation of the tussle between President Jacob Zuma and Gordhan over control of SA’s finances, which is coming to a head.

Gordhan

The 13-page affidavit, released to the public by the National Treasury on Sunday, cites 14 Gupta-controlled companies - including Oakbay Investments, Oakbay Resources, Tegeta Exploration & Resources and Sahara Computers. It also cites the big four banks, which earlier this year closed accounts belonging to companies linked to the controversial Guptas.

Gordhan has approached the North Gauteng High Court, asking for an order that the Finance Ministry cannot, by law, intervene when banks close companies’ accounts.

This comes after several heads of Gupta-owned companies, claiming that thousands of jobs would be lost, approached Gordhan at various times seeking his intervention.

Gordhan’s affidavit also exposes several allegedly dubious transactions reported to the Financial Intelligence Centre by the banks, which total R6.8 billion.

In his affidavit, the minister - due to present probably the most important mini budget ever next Wednesday - says “the continued assertions by Oakbay that, as Minister of Finance, I should intervene in, or exert pressure upon, the banks regarding their closure of the Oakbay accounts is harmful to the banking and financial sectors, to the regulatory scheme created by law, and the autonomy of both the governmental regulators and the registered banks themselves”.

Oakbay is disputing that the transactions are unlawful, noting that only 5 of the 72 cited bear closer scrutiny, and that there is a difference between transactions that must be reported to the Financial Intelligence Centre, and those that are suspicious..

In a statement, Van Der Merwe Associates says Oakbay will oppose the affidavit, unless Gordhan “withdraws the application and tenders costs” by yesterday afternoon.

That does not seem to have happened.

The lawyers add the affidavit’s insinuation that Oakbay would “expose the fiscus not only to loss of tax revenue but also put the burden of mining rehabilitation on the fiscus” was “uncalled for, malicious and nothing but vexatious”.

Oakbay, says the statement, does not dispute that Gordhan is not by law compelled or obliged to intervene in the relationship between it and banks.

However, says Van der Merwe Associates, to spend taxpayers’ money in “a reckless and inappropriate manner” is a contravention of the Public Finance Management Act, which would warrant further action against those who abuse taxpayers’ money.

The lawyers’ letter added Gordhan had made “defamatory and untrue remarks towards members of the Gupta family by insinuating that they have been involved in inappropriate conduct”.

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