Bank sheds light on Gupta billions
Baroda sets up trust for frozen accounts
As the Bank of Baroda prepares to withdraw from South Africa‚ it has explained what will become of the frozen Estina Dairy funds as well as the Optimum and Koornfontein rehabilitation funds.
The rehab funds, which are required by law to be kept in a trust account‚ were frozen following a court order applied for by the Organisation Undoing Tax Abuse (Outa). Preservation orders obtained by the asset forfeiture unit further froze about R100-million kept in various Baroda bank accounts for Gupta companies.
In court papers filed in the North Gauteng High Court in Pretoria in response to a new application by the Gupta family companies‚ the bank said it will be setting up a trust account to keep the more than R2-billion from these accounts and unclaimed deposits made to it by other clients.
This was contained in an affidavit by Baroda CEO Manoj Jha in response to the urgent court application filed by 20 companies belonging to the Gupta family in an attempt to prevent the bank from shutting its operations. The matter will be heard today.
The bank announced in January that it planned to close its branches in the country following a decision by its parent company in India to downscale global operations.
“The branch is, however, setting up a trust account in terms of section 78(2) A of the Attorney Act with [law firm] Tabacks and the Standard Bank of South Africa for the purposes of holding (i) all unclaimed deposits and (ii) the accounts required to be frozen in terms of the Outa order and for such amounts that are required to be frozen in terms of the recent Estina preservation order (iii) the recovery [of] the balance of amounts owing to the branch by borrowers‚” Jha’s affidavit read.
In September, Outa launched an application against the trustees of both the Optimum and Koornfontein Rehabilitation Trusts‚ both of which are Gupta-owned companies.
It raised concerns about alleged mismanagement of the trust funds. Outa obtained an interim interdict‚ requiring that the Bank of Baroda continue to hold the trust funds in an interest-bearing account‚ pending further litigation.
Last month‚ the Estina preservation order was granted in the Bloemfontein High Court after Oakbay was charged with fraud‚ theft‚ conspiracy to commit fraud‚ theft‚ and contravening the Public Finance Management Act.
The order revealed how the Guptas and their business associates became beneficiaries of the lion’s share of R220-million paid by the Free State agriculture department in a project meant to benefit the poor. “In terms of the Estina preservation order‚ the branch has duly frozen those accounts.”