High Court ruling leaves Guptas without a bank
GUPTA-owned Oakbay and its subsidiaries hopes of extending their banking facilities with the Bank of Baroda (BoB) to the end of the year were dashed yesterday after the North Gauteng High Court dismissed the companies interdict application to stop BoB from closing their accounts at the end of this month until the merits of its main application was heard in December.
The court’s decision leaves the future of the embattled company up in the air and raised speculation that the group will launch another spate of assets disposals after they had already disposed of their media businesses and the notorious Tegeta last month.
Judge Hans Fabricius said the Gupta companies had not pleaded a cause of action based on provisions of Section 34 of the Constitution and dismissed their application.
“I am of the view that the application to be heard in December and the main application (to be heard next year) has very little prospect of success… The respondent (the bank) is very likely to suffer should it be forced, against its will, to continue with the relationship with the applicants,” read the judgment.
Oakbay Investment’s isolation by the financial services companies has seen the group disposing of its media assets, the New Age newspaper and 24-hour news channel ANN7. This disposal was followed by Oakbay selling its Tegeta mining operations.
BoB was the last bank to provide services to the Guptas after the big South African banks and the Bank of China said they could not deal with the family because of regulations around money laundering.
The bank, which has provided its services to Gupta companies since 2005 has accused the companies of conducting between 150 to A Bank of Baroda advertisement in Mumbai. Bank of Baroda, India’s second-biggest lender by assets, has told the Guptas that their account will be closed by the end of the month.
Oakbay had hit back at BoB claims that it would suffer reputational risk if it continued housing Oakbay’s bank account.
Broke silence Among the companies that were listed as applicants is Shiva Uranium, Sahara Computers, Optimum Coal Mine and Duduzane Zuma’s investment vehicle Mabengela Investments.
Earlier this month, President Jacob Zuma broke his silence on the matter and accused former finance minister Pravin Gordhan of conspiring with the banks to close their accounts and driving the Guptas and himself out of business.
Judge Fabricius said the BoB was subject to a number of statutory provisions which in the main sought to uphold the integrity of the financial system in the country. “It seeks to uphold such integrity with honest transparency.”
The judge said, on the other hand, there is the well-founded suspicion that the applicants subverted the integrity of the financial system “to put it gently”.
Meanwhile, the Organisation Undoing Tax Abuse yesterday said that it would be bringing an urgent interdict against the BoB aimed at freezing the Gupta-owned Optimum and Koornfontein coal mines’ rehabilitation trust fund accounts worth R1.7bn.