STANDARD BANK WAS PRESSURED TO REOPEN GUPTA ACCOUNTS
And two ministers leaned on him to reverse closure of Gupta accounts
Bank attorney Ian Sinton reveals how Zwane and Oliphant tried persuade him and CEO Sim Tshabalala to reverse decision to close accounts
When Standard Bank cut ties with the Gupta family in 2016, two government ministers and senior ANC leaders allegedly questioned whether this was part of a “White Monopoly Capital” plot and if they were “taking orders from Stellenbosch”.
Testimony by the bank’s lawyer and head of compliance Ian Sinton revealed how former mineral resources minister Mosebenzi Zwane even suggested he’d “change the law” so that banks would not be able to close accounts like they had with the Guptas.
“Minister Zwane said that, as a member of the ruling party, he had the ability to get the law changed, and he was trying to propose a change whereby it would become illegal for banks to close accounts in these circumstances,” Sinton testified.
Sinton yesterday gave explosive evidence to the state capture inquiry, which is probing, among other things, whether any minister or deputy minister “improperly intervened” in the decisions by four major banks to close Gupta accounts.
Zwane made headlines in September 2016, when he announced that cabinet had resolved to ask then president Jacob Zuma to initiate an inquiry into the banks that had cut ties with the Guptas.
“Evidence presented to the interministerial committee indicated that all the actions taken by the banks and financial institutions were as a result of innuendo and potentially reckless media statements and as a South African company, Oakbay had very little recourse to the law,” Zwane said at the time.
Cabinet and Zuma both distanced themselves from Zwane’s statement, which Zuma said was issued in Zwane’s “personal capacity”.
Now Sinton has revealed how Zwane and labour minister Mildred Oliphant – during an interministerial committee meeting attended by Gupta ally Mzwanele Manyi – attempted to persuade him and Standard Bank CEO Sim Tshabalala to reverse the bank’s decision to close Gupta business accounts.
He said the bank decided to close the accounts after a series of media revelations about the Gupta family’s alleged involvement in the hiring and firing of cabinet ministers, and strange transactions initiated by their business associates. Those suspicious transactions included the transfer of money meant for the Estina Dairy Project to Dubai and attempts to transfer a R1.4bn mine rehabilitation trust account from Standard Bank to the Bank of Baroda.
Sinton said Standard Bank did not believe the response given by the Guptas’ business associates as why this had been done. They claimed it was because Bank of Baroda “offered a better interest rate”.
“We were not satisfied with that answer because no one had inquired of us what interest rate we were actually paying. So we didn’t believe the answer.”
The trust account was frozen following a high court application by OUTA.
Sinton said Standard Bank had also been alarmed by reports that Westdawn Investments, whose account Standard Bank managed, had been involved in the purchase of a home for one of former president Jacob Zuma’s wives.
The bank’s concerns were intensified, he said, when acting Oakbay CEO Ronica Ragavan initially denied any involvement in this alleged purchase, but later admitted that she had signed a Bank of Baroda bond for the property.
“Their initial denial followed by the admission for us left us completely unsatisfied with the answer,” Sinton said.
The bank had clear legal backing in making its decision to no longer do business with the Guptas. But, despite this, he said the ANC summoned Standard Bank to Luthuli House to answer for the decision.
He understood the meeting was initiated by then ANC SG Gwede Mantashe, and was attended by senior party officials Jessie Duarte and Enoch Godongwana.
At that meeting, Sinton said, “we were asked to comment on the allegation that we were part of White Monopoly Capital and closing the accounts was part of a campaign of ours to drive black people out of business in South Africa.
“We dealt with that in that meeting, but I asked who was responsible for this notion, on what basis did they come to the conclusion that they accused us of being part of this conspiracy? And they refused to give an answer to that question.”
“We were asked to comment on reports that we were taking instructions from people in Stellenbosch. We rejected those out of hand,” Sinton said.
“I think it’s the first time that I’ve seen my boss Sim Tshabalala really angry.”
Sinton said former Oakbay CEO Nazeem Howa confirmed he asked the ANC to intervene after four banks severed ties with the Guptas. He said Howa said he’d written to then president Jacob Zuma about these closed accounts.
Later, when Sinton and Tshabalala attended the IMC meeting with Zwane and Oliphant, Sinton said they were again asked to respond to claims that they had colluded with the other banks to shut down Gupta accounts and were part of a White Monopoly Capital campaign to destroy black business. The bank denied both these accusations.
“Towards the end of the meeting, they reminded us that we operated under a license granted by government and said we should be more responsive to concerns that they were raising. Mr Zwane said that – it was his position. We said as far as we are concerned, we comply with all the laws of the land.”
ABSA and FNB officials are expected to testify today.
Their initial denial followed by the admission left us completely unsatisfied