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Urgency of Gupta-linked firm's court bid 'self created'

Politics
Pretoria - The urgent application by Gupta-linked company Vardospan to force the SA Reserve Bank, Registrar of Banks and Finance Minister to by Friday make a decision about their bid to buy South African unit of Luxembourg-based Habib Bank, was struck from the roll by the Gauteng High Court, Pretoria.

Judge Ronel Tolmay found that the matter was not urgent, as Vardospan created its own urgency.

This means that the company will have to bring the application during the normal course, which can take months.

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Ajay and Atul Gupta File photo

Salim Essa, a business associate of the Gupta family, holds 100% of Clinq Holding, which owns 66.67% of Vardospan. The balance of the shareholding in Vardospan is held by Pearl Capital, wholly owned by Hanza Farooqui, who is also a director of Vardospan.

Essa is also a director of VR Laser Services, a company partly owned by the Gupta family’s Oakbay Investments.

VR Laser was one of the companies which this week opposed an application by now former finance minister Pravin Gordhan in which he asked for affirmation that he was not obliged to interfere in the decision of the country’s four major banks to close Gupta-related bank accounts.

Vardospan wanted an urgent order forcing the SA Reserve Bank, Registrar of Banks and Finance Minister (respondents) to take a decision on its application to acquire 99.9% of Habib Bank from majority shareholder Pitcaims

Farooqui said in papers before court that it had entered into a contract with Pitcaims to acquire the bank. This agreement was due to lapse yesterday, but the respondents have not yet given the green light to Vardospan to acquire the bank.

According to Farooqui, the Competition Commission has approved the transaction, but seven months had lapsed without the respondents having made any decision about the company’s application to buy the bank.

He said the seller had in January this year extended the deadline to March 31. Farooqui said the final extension was contained in a written agreement with the seller.

“To date and despite continuous co-operation by Vardospan, the application still has to be decided.” He added that the respondents knew it was crucial that a decision had to be made and that’s why they, on the eve of the contract lapsing, turned to the court for help.

It was said by the Reserve Bank that Vardospan could not dictate to it how to exercise its powers. It was also argued that Vardospan and its shareholders’ suitability to control a bank still had to be assessed.

Judge Tolmay on Friday said the applicant knew the deadline was nearing, yet did not earlier approach the court. She also found no evidence that the applicant did not try to extend the latest deadline set by the seller. “The urgency is self created,” she said.

Pretoria News

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