Nedbank CEO Mike Brown Picture: Simphiwe Mbokazi/African News Agency (ANA) Archives
Nedbank CEO Mike Brown Picture: Simphiwe Mbokazi/African News Agency (ANA) Archives

Zwane asked Nedbank to assist Gupta family with banking facilities

By Zintle Mahlati Time of article published Sep 19, 2018

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Johannesburg - The former minister of mineral resources Mosebenzi Zwane had asked Nedbank CEO Mike Brown if the bank could "step in" and provide the controversial Gupta family with banking facilities under the guise of saving thousands of jobs.   

Brown told the state capture inquiry on Wednesday that Zwane had suggested, during an inter-ministerial committee meeting (IMC), if the bank would reconsider its decision to close Gupta-linked company accounts as all the family members who held positions in the companies had resigned. 

"He went to suggest would Nedbank consider stepping in to save jobs and provide an amicable solution given that the members of the Gupta family, between the time we gave notice and the meeting, had resigned from those companies. I found the request strange. I reminded Mr. Zwane that we were not here to discuss specific client matters," said Brown. 

Brown had been asked to attend the IMC meeting, which took place in April 2016, after the country's big four banks served Gupta related companies with notices to terminate their banking accounts because of a reputational risk. 

He said there was no way the bank would have changed its mind and succumbed to pressure from Zwane.  

"Our decision to close the accounts was base on the reputational risk associated with the accounts. The reputational and business risk would not have changed at all as a consequence of the resignations," he said. 

Zwane has a history with Gupta family and his name has often appeared in alleged scandals surrounding the family. 

Brown detailed how when he questioned why former finance minister Pravin Gordhan was not present at the IMC meeting, Zwane lied and told him that Gordhan was aware of the meeting. 

In an affidavit submitted in court, Gordhan had stated that he had no knowledge of the meeting and that "no IMC had been appointed". 

Zwane had at the start of the meeting expressed his unhappiness that other banks, Absa and FNB, had refused to meet with the IMC while they relied on the government for banking licences. Brown said he viewed this statement as a threat. 

"He expressed dissatisfaction with some banks that had refused to attend the meetings. He stated that it was concerning that banks could undermine the government by refusing to attend such meetings. I certainly felt that was a veiled threat in terms of the power of the IMC," said Brown. 

Even after assuring Brown that the meeting would not discuss private accounts, Zwane questioned Nedbank's closure of Gupta accounts.

"I left the meeting with the impression that IMC was focused on two key issues, firstly to try and determine if there was collusion amongst the banks in the closure of bank accounts and secondly to determine whether Nedbank would have an appetite to step in and become the primary transactional banker for the Gupta group of companies," said Brown. 

Zwane made another threat towards the end of the meeting.

"At the conclusion of the meeting we were thanked for our attendance and minister Zwane commented that he found it surprising that other banks had refused to attend the IMC meeting with government, considering that banks received their licences from the government.

"I also found it to be a very strange statement, it felt like a form of a threat and it is also a technically inaccurate statement because banks do not receive their licences from the government, but from the SA Reserve Bank which is a constitutionally independent body," said Brown. 

The Nedbank CEO also told the commission about a meeting at ANC headquarters at Luthuli House where he met with former ANC secretary general Gwede Mantahse and Jessie Duarte. He was not sure if the ANC’s head of economic transformation Enoch Godongwana, who set up the meeting, was present. 

Brown said his discussions with the ANC focused on the general closure of accounts by banks and he did not leave that meeting feeling "under pressure". 

Nedbank was the last bank to give testimony at the inquiry after a marathon run with Standard Bank, FNB and Absa giving testimony on the ANC and the cabinet's attempts to question the bank's decisions to close Gupta related banks accounts in 2016. 

The inquiry continues.


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