How Gordhan lifted lid on dodgy dealings
Minister in court bid to allow banks to show family’s transactions
FINANCE Minister Pravin Gordhan has lifted the lid on billions of rands in suspicious Gupta banking transactions.
The minister has outsmarted the Zuma-linked family with an application to the high court.
Gordhan’s move lays bare the reasons why the banks suspended the Gupta companies’ accounts.
It also shows the extent of the controversial family’s intricate financial dealings.
The disclosures are a response to the Guptas’ insistence that the banks closed the accounts unlawfully.
In papers filed in the High Court in Pretoria on Friday, Gordhan seeks a declaratory order to show that he cannot intervene in the Guptas’ dispute with the four major banks.
The court application came three days after the National Prosecuting Authority charged Gordhan with fraud.
Gordhan has received overwhelming support following the NPA’s decision. His backers have claimed that it was a pretext to get rid of him as finance minister.
In his explosive affidavit, Gordhan:
Reveals how South African banks became alarmed over transactions regarding the Guptas. The Guptas have been closely linked to President Jacob Zuma, his family and to several members of his cabinet;
Reveals how Nazeem Howa, CEO of Gupta company Oakbay, tried to get the minister to intervene. Howa allegedly wanted Gordhan to persuade the banks to unfreeze the accounts “in the national interest”;
Provides a platform to the banks, Reserve Bank governor Lesetja Kganyago, registrar of banks Kuben Naidoo and director of the Financial Intelligence centre Murray Michel to reveal details of suspicious Oakbay transactions totalling billions of rands, by citing them as respondents in the case;
Points out how agreeing to Oakbay’s requests for intervention would have opened up the highly regarded South African banking sector and its clients to huge international fines;
Details transactions benefiting members of the Zuma and Gupta families to the value of billions of rands, including information on the controversial Optimum coal deal;
States how the actions Oakbay pressured him to take would have imperilled the South African economy; and
Provides insight into the massive pressures at play and fortunes at stake in the current “state capture” saga.
Gordhan’s court action seems set to wrong-foot his opponents.
By asking for a declaratory order on his powers to intervene (or not) between bank and client, he has placed much information in the public domain.
And, by citing Absa, First National Bank, Standard Bank and Nedbank as respondents, he has freed them to legally disclose suspicious Gupta transactions without breaking the law on bank-to-client privilege and confidentiality.
University of South Africa legal expert Marinus Wiechers said that because he is acting in his ministerial capacity, if Gordhan were to be removed as minister, his successor would not necessarily be able to retract the application.
“He acts ex officio (in terms of the office he holds), which is well within his rights because as a minister he is a legal person as such, in addition to his personal juristic personality,” Wiechers said.
“Because of how Gordhan framed it, the banks are bound to share the requested information and a court can only deny the application if it lacks substance, is brought mala fides (with malicious intent/in bad faith), prejudices an ongoing investigation, or if Gordhan acted outside his statutory mandate, the last of which he certainly has not.
“A successor cannot retract an application without returning to court.
“Furthermore, because this is not a criminal case, the National Prosecuting Authority will not have a role in this process unless it can prove the application interferes with its work,” said Wiechers.
In the court papers, 14 Guptacontrolled companies are named, including Sahara Computers, news channel ANN7, the New Age newspaper, Jet Airlines, a mansion in Saxonwold and VR Laser Services.
VR Laser recently landed a huge and controversial contract with state-owned arms dealer Denel.
Gordhan said the dispute “has arisen in circumstances which have considerable importance for the operation of the banking sector of the South African economy, and its regulation by government”.
He has also brought the ministerial task team into the scope of the case by stating the public interest, nationally and internationally, in the controversy.
Gordhan was appointed as part of a three-member cabinet team, which includes Mildred Oliphant (labour) and Mosebenzi Zwane (mineral resources), to look into the banks matter.
Gordhan revealed the direct representations to him by Howa and Sahara Computers.
They alleged vendettas by the banks and asked him to intervene on their behalf “in the national interest” — to avoid thousands of job losses for Gupta companies.
They also asked Gordhan for “any possible assistance” he was able to offer them “in these trying times”.
Gordhan detailed a meeting he had with Howa in May. The minister said he clearly set out how he was legally and constitutionally limited in his permitted actions.
Gordhan said that if the Guptas and Oakbay felt they had been disadvantaged, they were allowed by law to lay the details of their dealings before the court.
“Similarly, I am advised that it is open to the banks, in answering this application, to disclose such reports in terms of the same provisions,” said Gordhan in his affidavit.
Oakbay would have imperilled the economy This is not a criminal case, the NPA will not have a role