An­other bank ditches Gup­tas

CityPress - - News - SIZWE SAMA YENDE sizwe.yende@city­

A fifth South African bank has closed the ac­counts of the con­tro­ver­sial Gupta fam­ily.

The Venda Build­ing So­ci­ety (VBS) Mu­tual Bank is the lat­est to de­cline to do busi­ness with the Gup­tas, clos­ing two of the fam­ily’s ac­counts.

VBS is the same bank that granted Pres­i­dent Ja­cob Zuma a loan of R7.8 mil­lion so that he could re­pay the state for his por­tion of the bill for se­cu­rity up­grades to his Nkandla home, as or­dered by for­mer Pub­lic Pro­tec­tor Thuli Madon­sela.

The two ac­counts – both busi­ness ac­counts – were ter­mi­nated in Jan­uary fol­low­ing de­lib­er­a­tions by the bank’s bosses.

The bank sent a terse let­ter, dated March 9, ad­dressed to Ron­ica Ra­ga­van, act­ing chief ex­ec­u­tive of Oak­bay In­vest­ments, the hold­ing com­pany for the Gupta fam­ily’s busi­nesses in South Africa.

The let­ter reads: “Please be ad­vised that VBS Mu­tual Bank, in line with our risk ap­petite frame­work, has de­clined your re­quest for new ac­counts ap­plied for and [your] con­tin­ued re­la­tion­ship with the bank.”

The let­ter goes on to ex­plain that the Gup­tas’ ac­counts would re­main open un­til May 22, “af­ter which your ex­ist­ing ac­counts will be de­ac­ti­vated”.

“Please pro­vide the bank with bank ac­count de­tails [of an­other fi­nan­cial in­sti­tu­tion] to which funds from all your ac­counts will be trans­ferred,” the let­ter reads.

VBS spokesper­son Ndi­vhuwo Khangale de­clined to pro­vide fur­ther de­tails, say­ing: “We’re guided by the bank-client con­fi­den­tial­ity clause and can­not com­ment on those is­sues.”

City Press, how­ever, un­der­stands that the VBS board de­clined the Gup­tas’ reap­pli­ca­tion for new ac­counts af­ter its au­to­mated fi­nan­cial se­cu­rity risk sys­tem was ac­ti­vated in Jan­uary and kicked them out for be­ing “po­lit­i­cally ex­posed”.

“The risk of­fice picked up that these guys opened two ac­counts with the Jo­han­nes­burg branch when the sys­tem warned that they were a risk. When a bank has such clients, it is more work to track their trans­ac­tions,” said a source close to VBS.

“It’s not a lot of money they had de­posited and they were not the bank’s top clients. The is­sue is that, un­like a sin­gle trans­ac­tion like the pres­i­dent’s bond, they would have a lot of trans­ac­tions,” the source added.

It is un­clear ex­actly when last year the Gup­tas opened the ac­counts.

The Gup­tas’ bank­ing woes started last year when all four of the coun­try’s ma­jor banks de­clined to do busi­ness with the fam­ily’s com­pa­nies, with­out pro­vid­ing rea­sons.

The fam­ily’s au­dit firm, KPMG, also ter­mi­nated the re­la­tion­ship with the Gup­tas’ com­pa­nies.

The Gup­tas and their lieu­tenants, in­clud­ing for­mer Oak­bay chief ex­ec­u­tive of­fi­cer Nazeem Howa, tried to pres­sure for­mer fi­nance min­is­ter Pravin Gord­han to in­ter­vene in their bank­ing cri­sis, and Gord­han was forced to ap­proach the Pre­to­ria High Court for a declara­tory or­der con­firm­ing that, legally, he was not able to do so.

Min­ing Min­is­ter Mosebenzi Zwane, who is thought to be a Gupta de­ployee in Cabi­net, also tried to in­ter­vene on the fam­ily’s be­half.

At­tached to Gord­han’s court pa­pers was a cer­tifi­cate from the Fi­nan­cial In­tel­li­gence Cen­tre de­tail­ing 72 sus­pi­cious trans­ac­tions to­talling R7 bil­lion that the Gup­tas and their com­pa­nies had al­legedly made, in­di­cat­ing why they could have prob­lems with the banks.

Their bank­ing trou­bles forced the Gup­tas to try to buy their own bank through their busi­ness as­so­ci­ate, Salim Essa.

The bid failed, how­ever, be­cause Essa’s com­pany, Var­dospan, failed in its court bid to force Treasury and the SA Re­serve Bank to make a de­ci­sion on their ap­pli­ca­tion to buy the bank in a R450 mil­lion deal.

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