National Treasury hits back at Guptas

Anul Gupta. Picture: Cara Viereckl

Anul Gupta. Picture: Cara Viereckl

Published Oct 21, 2016

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Johannesburg - National Treasury has says it is “peculiar” that the Gupta-owned Oakbay is choosing to respond to Finance Minister Pravin Gordhan’s affidavit in public.

It also says, in a statement issued on Friday, that it welcomes Oakbay’s announcement that it will defend the matter in court after its “unsuccessful attempt to coerce the minister into withdrawing the matter. This will provide an opportunity for all issues to be properly ventilated in an open court.”

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 after banks closed its accounts.

This news came 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.

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.

Read also:  Gordhan exposes Guptas in explosive affidavit

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.

Closed 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”.

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.

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..

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”.

Hitting back

On Friday, National Treasury aid it noted “the numerous attacks launched by the lawyers representing the Oakbay Group of companies”.

It adds it has “no intentions of conducting the case in the court of public opinion and will provide a comprehensive and appropriate response in court once the Oakbay respondents have filed their answering affidavits. We would also like to urge Oakbay to respect the court process.”

“It is peculiar in the extreme for the aforementioned respondents to address the issues raised in the affidavit by way of media releases as these make no meaningful contribution to the case at hand. The minister has presented his case under oath in an appropriate forum and it is incumbent upon the Oakbay respondents to do likewise should they wish to oppose his version.”

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