Banks under fire over Oakbay closures

BANKING institutions are under fire over their black-listing of the Gupta-owned Oakbay Investments.

The interministerial committee (IMC) set up by the cabinet in April to probe the matter, has accused the banks of acting on “innuendo and potentially reckless media statements… when they closed bank accounts and/ or terminated contractual relation- ships with Oakbay Investments”.

It had recommended a judicial inquiry be established, said Mineral Resources Minister Mosebenzi Zwane, who headed the committee, in a statement yesterday.

The Guptas, an Indian-South African business family, have close ties with President Jacob Zuma.

The committee examined claims that “certain banks and other financial institutions acted unilaterally and allegedly in collusion” in closing the Guptas’ accounts. It said the cabinet had resolved to consider the current mandates of the Banking Tribunal and the Banking Ombudsman.

“Evidence presented to the IMC indicated that all of 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,” it said.

The committee said that, based on the current Financial Intelligence Centre Act and the Prevention of Combating of Corrupt Activities Act and on evidence presented to the it, it was unclear whether the various banks and financial institutions, as well as the Reserve Bank and the Treasury, complied with these and other pieces of legislation.

“Evidence was also presented that these institutions may have placed undue pressure on banks that sought to assist the company by subjecting them to unwarranted auditing processes. It is unclear why the Reserve Bank will not issue new banking licences to other banks and this would need to be given careful attention by the Judicial Inquiry as it did not fall within the purview of the IMC,” the committee said.