Cape Town - If the Guptas had a problem with the banks shutting down their accounts and they had nothing to hide, they should go to court, Finance Minister Pravin Gordhan bluntly told the chief executive of their company when they met at the Treasury.
He said legal advice he had taken indicated it would be “legally impermissible” for him to intervene. Gordhan provided this frank account of his meeting in May with Oakbay Investments chief, Nazeem Howa, in a written reply to a parliamentary question from the DA’s David Maynier on Friday. It comes after Gordhan and Mineral Resources Minister Mosebenzi Zwane openly disagreed in Parliament this week on Zwane’s proposal, which he had claimed was a cabinet resolution, that a judicial commission of inquiry probe the banks over their treatment of the Guptas.
Zwane had complained in his statement on the matter last week that Gordhan had not bothered to attend meetings of an interministerial committee to discuss the matter.
Maynier said on Friday Gordhan’s reply was “a massive slap-down” to Zwane and showed the inter-ministerial committee should never have been established.
Gordhan had been “absolutely right” to show Howa the door.
Gordhan said in his parliamentary reply he had met Howa after receiving two letters from him requesting his intervention but, after providing him with an overview of the legal framework governing banks, he had told him there was nothing he could do to help. Gordhan said in his reply he had pointed out to Howa that any failure by the banks to comply with international regulatory requirements “could have devastating effects on the banking system, financial stability and the economy as a whole”.
There were also legislative and regulatory obstacles to the banks discussing the affairs of their clients with him but, Gordhan told Howa, there was nothing preventing Oakbay from furnishing him with the reasons the banks had given for the closure of the company's accounts.
Howa said the banks had not given any reasons but he agreed to send Gordhan the letters from them. This never happened.
But Howa had revealed in a TV interview that one bank had explained it was prevented from doing business with any party whom “a reasonably diligent (and vigilant) person would suspect” could make the bank party to contraventions of various local and international anti-corruption legislation.
The bank had said, after conducting enhanced due diligence of Oakbay companies, that continuing with their relationship would “increase our risk of exposure to contravention of the mentioned law to an unacceptable level”.
The finance minister said in his reply to Maynier that the reasons quoted by Howa were “very serious” and “it is in the interest of Oakbay that it goes to court if it has nothing to hide to correct any wrong perceptions that any bank may have about it, and to ensure it is being treated fairly”.
He said it should be remembered that the 2003 UN Convention Against Corruption required banks to take preventive action against corruption and money-laundering.
The onus was on individuals and companies to explain transactions that their banks might regard as suspicious. “Despite further correspondence with Oakbay, it remains my view I am unable to assist,” Gordhan said.
“The best course of action would be for the company to approach a competent court to establish the rights which it contends it has, rather than via a political or public media campaign.” Gordhan said this would allow the banks to give their reasons without breaching confidentiality obligations.
Political Bureau