Johannesburg – Finance Minister Pravin Gordhan on Monday
hit back at Gupta-owned Oakbay in a 103-page affidavit.
Gordhan’s affidavit, which should have been lodged on
Friday in response to one from Oakbay, was delayed because he has just returned
from the World Economic Forum in Davos and is preparing for the budget on
February 22.
In his response, Gordhan notes that Oakbay is now making
the “belated” concession that the minister cannot intervene in banks’ affairs.
The current legal debacle started last year when Gordhan
asked the courts to confirm that he had no power to intervene in banks’
relationships with its customers.
Several banks and companies cut ties last year with
Oakbay, without publicly disclosing their reasons. They included South Africa’s
top four banks: Standard Bank, Nedbank, Barclays Africa’s Absa, FNB and
Standard Bank.
Gordhan also notes Oakbay wants his application to fail,
even though it concedes that his position is correct in law.
However, he points out that Oakbay wants the big 4 banks
probed because they are aided by the South African Reserve Bank and, therefore,
not fully independent.
This, he asserts, is an inconsistency in its affidavit.
Gordhan also argues that Oakbay’s allegations are
spurious and have no merit, and notes that the company did not challenge the
validity of the Financial Intelligence Centre certificate.
Gordhan’s affidavit follows a recent one in which Oakbay
said Gordhan’s initial application to the court was flawed.
In a statement issued by lawyers Van der Merwe &
Associates at the time, Oakbay argued Gordhan’s “superfluous application is
riddled with factual and legal errors”.
Last October, Gordhan revealed in a court affidavit that
R6.8 billion in payments made by Ajay, Atul and Rajesh Gupta, companies they
controlled and other individuals with the same surname had been reported to the
authorities as suspicious since 2012.
Oakbay has previously said all 72 transactions were
approved by the banks processing them.
Last April, the government told Gordhan and two other
cabinet ministers to contact the banks to discuss their decision to cease doing
business with the Gupta companies.
The banks refused to give details, saying their dealings
with clients were confidential.
A document from Murray Mitchell, the director of the FIC,
listed 72 suspicious transaction reports implicating members of the Gupta
family and their companies, some of which comprised multiple entries for which
no amount was listed. He did not specify why the transactions were considered
suspect.
Gordhan asked the banks to provide confidential reports
made to the FIC in an open court, detailing suspicious transactions, to
determine if there was any substance to Oakbay’s claim that the banks acted
improperly.
On Friday, Oakbay said Gordhan’s “reliance on the list of
72 purported ‘suspicious transaction reports’ is misplaced and the minister’s
application is supported by a flawed analysis and a faulty factual record”.
The statement added Oakbay has never suggested that the
minister is required to intervene in the bank-customer relationship. “There is
no contested legal issue here and there is never any reason for the minister to
bring this application.”
Read also: Standard
Bank intervenes in Gordhan-Gupta fray
Oakbay says Gordhan could simply have declined to do
anything in the exercise of his legal discretion.
“Instead, he has asked the court to confirm that he does
not have to do anything.”
It adds Gordhan has asked the court to insert itself into
the functioning of the executive branch. “It would be bizarre if every
empowered government official receiving a request for assistance or counsel
races to court to seek a declaration that he/she does not have to act on the
request.”
Read also: Oakbay
refutes Gordhan's application
Oakbay adds it has attempted to gain the information it
needs to prove that each and every transaction is legitimate and above board,
and engaged an international investigative firm – Nardello & Co – to review
the transactions.
It says, without providing a copy of the report, that
there is not enough information about the 72 suspicious transaction reports to
identify them in the books and records of Oakbay Group or the personal bank
accounts of members of the Gupta family.
“Two-thirds of the allegedly suspicious transactions
occurred after the time when the banks had already decided to terminate their
relationship with Oakbay,” it adds.
Oakbay also says the Financial Intelligence Centre’s
release of the information was unlawful and, as a result of its arguments, the
court should decline the relief and dismiss Gordhan’s application with costs.
“Furthermore, the timing of the Minister’s application
supports the Oakbay Group’s suspicions that the application is politically
motivated and is part of the minister’s ongoing plan to diminish the Oakbay
Group and the Gupta family and to damage their hard-earned South African
business.”
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