Bank cut ties over bond for Zuma wife
ANC wanted decision reversed, inquiry told
A R3.5MILLION mortgage bond secured by the Guptas from Bank of Baroda in favour of one of the wives of former president Jacob Zuma was one of the factors leading to Standard Bank cutting business ties with the family.
This emerged at the State Capture Commission of Inquiry led by Deputy Chief Justice Raymond Zondo, who this week summoned all commercial banks to appear before him and testify about the impact state capture had on their businesses.
The commission heard that the Guptas, through one of their companies, Westdawn Investments, gave surety to pay the mortgage bond – for one of Zuma’s wives’ trust, in which she was a the sole trustee and her son the sole beneficiary.
This was according to Ian Sinton, Standard Bank’s former head of legal compliance.
He was testifying about the bank’s decision to give notice on April13, 2016, to terminate the banking services for the Guptas after the bank gathered “sufficient evidence” that the family might be involved in illegal financial activities.
Sinton told the commission that the other reason for terminating the Guptas’ banking services was their decision to take a portion of money – which was meant for the development of Estina Dairy Farm in the Free State – to Dubai.
Sinton told the commission that a few days after serving notice on the Guptas, they were summoned to the ANC’s headquarters, Luthuli House, to account for their decision.
The bank was also summoned to a meeting to account to the interministerial committee under Mosebenzi Zwane who, according to Sinton, tried to persuade them to reverse their decision.
Sinton said: “We found the invitation inappropriate, but nevertheless chose to attend the meeting. Our view was that the ANC was the governing party of the day. It would have been disrespectful not to attend.”
He said the ANC was represented by its former secretary-general, Gwede Mantashe, ANC deputy secretarygeneral, Jessie Duarte, and Enoch Godongwana – the head of the ANC’s subcommittee on economic transformation – who questioned whether the bank’s “decision was part of a plan by white monopoly capital to keep black people out of business”.
He also said the ANC officials questioned them on whether they got “the instructions to terminate from Stellenbosch”.
Sinton said the meeting in Pretoria happened after the ANC meeting, but similar points of concern were raised.
He said that in that meeting Zwane tried to persuade them to reverse their decision, and reminded them that their banking licence had been given to them by the government.
Zwane apparently told the Standard Bank delegation that the government had powers to introduce laws that would make it impossible for Standard Bank to terminate services to their clients.
According to Sinton, all these factors were likely to make Standard Bank prone to facilitating fraud, corruption and money laundering, which was a direct contravention of laws governing banks around the world.
The inquiry continues today.