Pretoria - The Bank of Baroda's fading relationship with Nedbank cannot be used as the main reason for the Indian state-owned international banking and financial services to close its South African branch, Gupta-linked companies argued in the Pretoria High Court on Thursday.
Nineteen companies belonging to the beleaguered Gupta family have launched an urgent court application in an attempt to prevent the bank from shutting its South African operations.
Advocate Owen Cook, representing the companies, said Nedbank was being used as an excuse.
In January, Nedbank informed the Bank of Baroda that it would terminate their relationship within three months. That meant that from April 1, Baroda would not have banking facilities with Nedbank - on which it relies to provide banking services to its own clients.
Following the January meeting, Baroda announced that it would shutdown its local branch and would cut all ties with Gupta linked companies by March 31.
Cook argued that Baroda did not attempt to save its relationship with Nedbank because their main agenda was to leave the country.
"Nedbank gave Baroda [a] notice period but there is no challenge, fight from Baroda. They don’t do what they should have done. They just accepted that," he said.
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Cook submitted that the bank's decision should be disregarded.
"Their decision is a breach of the court order...The consequence of them leaving will have an impact on many workers."
Cook said it is imperative for the bank to continue providing banking services to the Gupta family's companies in order to shield about 7,000 employees.
The Bank of Baroda cited adverse media coverage linked to alleged misconduct by the Gupta family as one of the reasons that pose a business risk for them.
Legal representative of the bank, Azhar Bham, told the court that it was unfair to make the bank stay in the country just to serve the Guptas. He said when other banks in the country closed their accounts they did nothing.
"They want to force Baroda to stay against its own will, It makes absolutely no sense," he said.
The bank reported 45 suspicious transactions by Gupta-owned companies amounting to R4.2 billion to the Financial Intelligence Centre between 16 September 2016 and 14 July 2017.
The Bank of Baroda is the last bank of offer banking facilities to Oakbay after the country's big banks and the Bank of China had cut ties with the firm citing "reputational risks".
Judge Ntendeya Mavundla reserved judgment in the matter and said he would make his ruling on March 12.
- African News Agency (ANA), Editing by Devereaux Morkel