Pretoria - The 20 companies belonging to the controversial Gupta family received a temporary 11th hour reprieve when a judge on Friday afternoon ordered that the Bank of Baroda may not close their accounts for about another week.
The bank was due to close the Gupta owned companies’ bank accounts on Saturday, following an order a week ago in which Gauteng High Court Judge Hans Fabricius dismissed an application by them for the Bank of Baroda to keep their bank accounts open.
The bank indicated that it was closing the accounts at the end of September, as it no longer wanted to be associated with the Gupta family.
The companies, which included the Oakbay Group, on an extremely urgent basis approached the court again on the eve of the closing of the bank accounts and pleaded for the accounts to remain open, at least until December when they will challenge the
bank’s decision to close the accounts.
Advocate Rafik Bhana SC, told Judge Tati Makgoka that the matter was so urgent that he had to deliver his judgment immediately. Bhana said even if the court could make a ruling, it could later deliver its reasons.
But Judge Makgoka said it would be unfair given the nature of the application not to reflect on the issues. He said he needed about a week before he could deliver his judgment. He indicated he would either hand down judgment next Friday (October 6) or the following Monday (October 9).
The judge ordered the Bank of Baroda to keep the bank accounts open and operational pending the outcome of his order in a week’s time.
Bhana earlier told the court that it would take up to two years for the companies to wind down their businesses with the bank. He said the nature of the business were so complex that this could not be done overnight.
“You do not sell businesses like this within two or three months.”
Bhana promised that the “true reasons” behind the Bank of Baroda and other banks severing its ties with the Gupta family would be revealed during the review application in December.
The true reasons, he said, included “pressure on the banks by third parties.” He said especially the Reserve Bank was putting pressure on the banks to cut its ties with Gupta linked companies.
Bhana said the bad publicity surrounding the family and the claims by the Bank of Baroda that it could not be linked to the Guptas due to all the negative publicity, was not the “main reason” for the banks dumping the family.
He pointed out that the family’s companies generated between 60% and 70% of the bank’s business.
“The truth will come out,” he told the judge.
He warned that if the bank accounts were closed at this stage, it would leave thousands of employees destitute. It would not only bring the companies to its knees, but it would also affect the fiscus.
The judge questioned whether he could force the bank to do business with the companies. “Won’t it be a forced marriage,” he asked. Bhana responded: “Yes, until there is a divorce down the line.”
Bhana said the contention by the bank that the companies could use pay agents to pay its employees, was absurd. He said in order to do this, they needed a lot of cash.
“How do we collect the money? In bags and stash it under the mattress? This is the real word,” Bhana said.