Sarb felt heat after Gupta accounts closed

GOVERNOR of the South African Reserve Bank (Sarb) Lesetja Kganyago has detailed the extent of the pressure that was brought on the central bank after the country’s banks closed the Guptas’ bank accounts three years ago.

Kganyago told global leaders at the Stavros Niarchos Foundation lecture that the attacks were for reasons other than price stability.

He said the bank was put under pressure to force the banks to reconsider the closures, as they made it nearly impossible for the family to run its operations.

“We started feeling pressure to force banks to service these accounts, in violation of the law. In addition, we came under pressure to allow this family to obtain a banking licence by buying a small bank. We even faced the threat of bank licensing being taken away from the Sarb altogether,” Kganyago said.

“We were using our independence to uphold a law against dirty money flows, and that made us enemies.”

Moody’s Investor Services yesterday said it continues to view the Sarb’s independence in the conduct of its policy, despite talks within the ANC to nationalise the bank.

The guarantee of the Sarb’s independence is Article 224 of the constitution, which explicitly protects the bank from government interference.

In August 2016, the Financial Intelligence Centre flagged 72 suspicious transactions linked to Gupta bank accounts with a total worth of R6.8 billion.

The infamous Guptas, who have been accused of having unfettered access to state resources under former president Jacob Zuma, had their companies’ bank accounts shut down by Standard Bank, Nedbank, FNB and Absa in 2016.

The head of compliance for Standard Bank, Ian Sinton, in September told the inquiry into state capture that former mineral resources minister Mosebenzi Zwane and Labour Minister Mildred Oliphant pressured Standard Bank to keep the Guptas’ accounts open.

FNB and Absa declined to meet government representatives about the issue, while Nedbank testified that Zwane threatened to pull the company’s banking licence if it refused to reverse its decision.

Kganyago also hit out at criticism directed at the central bank after it placed VBS Mutual Bank under curatorship last year after fraud at the bank of nearly R2bn was exposed.

“We were accused of undermining black excellence and protecting the interests of white capitalists. You know the saying that ‘patriotism is the last refuge of scoundrels’? Well, in South Africa, if you really need somewhere to hide, it’s not in patriotism but in race politics.”

S&P Global Ratings last week said it had no qualms over the ANC’s plans to nationalise the Sarb.