T he cabinet is targeting the banks that shut down the accounts of the Gupta family, as the uproar over Eskom’s dealings with a Gupta-owned company continues.
It emerged yesterday that the cabinet had taken an unprecedented decision to ask President Jacob Zuma to set up a judicial inquiry to investigate auditing firms and the banks that closed the accounts belonging to the influential family, who have close ties to the president.
Mineral Resources Minister Mosebenzi Zwane, who is allegedly close to the Guptas, confirmed last night that the cabinet took the decision at a meeting in Cape Town on Wednesday.
This comes after the JSE said yesterday it would no longer suspend Oakbay, a Gupta-owned company, after it found a sponsor. Sasfin, its initial sponsor, had cut ties with the Guptas, following auditing firm KPMG’s example.
The four major banks – Nedbank, Standard Bank, FNB and Absa – also stopped doing business with the family.
The government set up an inter-ministerial committee, chaired by Zwane, to investigate the banks.
Zwane confirmed that Finance Minister Pravin Gordhan was part of this committee but did not attend its meetings.
The cabinet’s recommendation could set the government on a collision course with the banks and auditing firms.
Part of the inquiry, Zwane said, would be to consider the mandate of the Banking Tribunal and the Banking Ombudsman.
“Evidence presented to the inter-ministerial committee indicated that all the actions taken by the banks and financial institutions were as a result of innuendo and potentially reckless media statements, and as a South African company, Oakbay had very little recourse to the law,” said Zwane.
“Looking into these mandates and strengthening them would go a long way in ensuring that should any other company find itself in a similar situation, it could enjoy equal protection of the law, through urgent and immediate processes being available to it as it is required by the constitution,” he added.
The government’s latest intervention in the banking sector comes after two asset management firms pulled the plug on state-owned entities (SOEs) because of political interference and infighting in the government.
Asset management firm Allan Gray warned yesterday that political uncertainty and governance issues at SOEs could impact on the economy.
Gordhan is embroiled in a fight with SOEs at a time when Zuma is refusing to intervene in the battle between the finance minister and the Hawks.
On Tuesday, Eskom chief executive Brian Molefe denied any underhand tactics in giving the Guptas tenders to supply coal to Eskom. The power utility denied blocking a National Treasury investigation into the coal contracts.
Molefe added that the allegations against the Guptas were “gossip and innuendo”, and as long as they weren’t found guilty of any wrongdoing, Eskom could not stop doing business with them.
See Page 6; Business Report