Banks to tell #StateCaptureInquiry why they cut ties with Guptas

Picture: African News Agency (ANA) Archives

Picture: African News Agency (ANA) Archives

Published Sep 17, 2018

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Johannesburg - South Africa's commercial banks are this week expected to give evidence at the commission of inquiry into state capture on why they decided to shut down business accounts linked to the controversial Gupta family.

As the dark cloud gathered around the family and their associates, the country's four major banks - Absa, FNB, Standard Bank, Nedbank -  cut ties, citing reputation risk and possible breach of banking rules. Absa was the first to shut down the accounts in December 2015. 

India's Bank of Baroda followed suit in January this year after allegations surfaced that the bank's South Africa's branch laundered money on behalf of the fugitive family. 

The move by the banks angered supporters of former president Jacob Zuma - who enjoyed close ties with the family - accusing banks of trying to shut down legitimate black-owned businesses. 

Earlier this year, the Organised Crime and Corruption Project released a report which found that, among other misdemeanours, officials at the Bank of Baroda deliberately suppressed employees’ reports of questionable Gupta-related transactions, so that regulators would not be made aware of them.  

The then finance minister Pravin Gordhan was drawn into the fray and had to approach the high court for a declaratory order to confirmed that he legally cannot intervene in the dispute between the Guptas and the banks. 

Gordhan's tenure at the national Treasury was allegedly an obstacle by those in power who wanted to take control of the public purse. 

Gordhan's affidavit to the court included a Financial Intelligence Centre certificate identified 72 suspicious transactions worth R7 billion by the family businesses.  

Standard Bank filed a supporting affidavit to Gordhan's case, asking for protection from members of Zuma's cabinet who exerted pressure on the bank to reopen the accounts. 

The court dismissed Gordhan's application with costs, adding that the sought order was unnecessary and that it was inappropriate of Gordhan, as a member of the executive, to draw the judiciary into the exercise of his executive functions.

The Guptas hastily sold its South African media companies under its holding company, Oakbay Investments. 

New owners included former government spokesman Mzwanele Jimmy Manyi who took over their television news channel ANN7 and The New Age newspaper for R450 million through vendor financing. The newspaper has since folded and the TV channel liquidated.

The Gupta family and former president Zuma and his son are at the centre of the ongoing state capture inquiry. Some of Zuma's cabinet ministers and leaders of the state-owned enterprises have also been fingered.

The Gupta brothers and their associates have allegedly raked in billions of rands through illegal contracts and wielded so much power that they even summoned ANC leaders to their Saxonwold compound to receive instructions.

African News Agency/ANA

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