Gup­tas bank­ing on Post Of­fice

Sunday Times - - NEWS - By THANDUXOLO JIKA

The Gup­tas are pin­ning their hopes on the South African Post Of­fice be­ing granted a bank­ing li­cence as a way to save their busi­nesses.

Ev­i­dence has also emerged con­firm­ing sus­pi­cions that the re­cent “sale” of their me­dia in­ter­ests to con­tro­ver­sial fig­ure Mzwanele Manyi and their min­ing as­sets to lit­tle-known Swiss-based in­vestor Charles King was forced on them by the Bank of Bar­oda, their last re­main­ing banker.

These de­tails are con­tained in an af­fi­davit sub­mit­ted by Oak­bay In­vest­ments act­ing CEO Ron­ica Ra­ga­van on be­half of the Gup­tas in the High Court in Pre­to­ria to in­ter­dict the Bank of Bar­oda from clos­ing the Gup­tas’ ac­counts at the end of the month.

The fam­ily’s business ac­counts were shut by the big four banks last year, and the Bank of Bar­oda has given the Gup­tas no­tice that it, too, will close their ac­counts.

The bank gave the Gup­tas three months’ no­tice in July, as they have been flagged as high-risk and po­lit­i­cally ex­posed per­sons.

The Bank of Bar­oda flagged 45 sus­pi­cious trans­ac­tions to­talling R4.5-billion in the 10 months since last Au­gust.

The trans­ac­tions have been re­ported to the Fi­nan­cial In­tel­li­gence Cen­tre.

Some of them in­clude sus­pected lay­er­ing, which is part of a money-laun­der­ing process wherein peo­ple or busi­nesses try to sep­a­rate il­licit money, ob­scure au­dit trails and sever the link from its source.

The af­fi­davit re­vealed that the Gup­tas would be forced to re­struc­ture by dis­pos­ing of some of their busi­nesses and ex­plor­ing op­tions to open new ac­counts.

“They are presently en­gag­ing with var­i­ous lo­cal and in­ter­na­tional fi­nan­cial in­sti­tu­tions to ex­plore the pos­si­bil­ity of ob­tain­ing a vi­able op­er­a­tional so­lu­tion to put in place, even tem­po­rar­ily.

“For ex­am­ple, a new bank, known as Post­bank, will soon com­mence of­fer­ing full bank­ing ser­vices,” said Ra­ga­van.

It is be­com­ing clear that the Gup­tas and their com­pa­nies have no prospects of find­ing al­ter­na­tive bank­ing fa­cil­i­ties since be­ing black­listed by the ma­jor banks.

The Gup­tas stand ac­cused of “se­ri­ous un­law­ful con­duct”.

Post Of­fice CEO Mark Barnes said in June that the com­pany was wait­ing for the Re­serve Bank to is­sue the Post­bank a li­cence to al­low it to op­er­ate as a fully fledged bank.

“The ap­pli­cants hope that it [Post­bank] will be un­bi­ased and will con­sider their re­quests for open­ing ac­counts favourably. I be­lieve that the com­mence­ment of Post­bank’s op­er­a­tions will, how­ever, take at least eight months,” said Ra­ga­van.

The Gup­tas are un­der pres­sure be­cause the Bank of Bar­oda wants to re­coup more than R300-mil­lion in loans once it has ter­mi­nated its ser­vices. The bank re­vealed in its re­spond­ing court pa­pers that it had al­ready re­cov­ered R1.2-billion of loans val­ued at about R1.5-billion. The court pa­pers re­veal that the Gup­tas were forced to find buy­ers for their busi­nesses be­cause of the pres­sure ex­erted by the Bank of Bar­oda.

Last month the Gup­tas funded Manyi’s com­pany Lo­di­dox to en­able it to buy The New Age and ANN7 shares for R450-mil­lion in a ven­dor fi­nance agree­ment.

In the same month, the fam­ily also said they were sell­ing Tegeta Ex­plo­ration and Re­sources — which con­sists of Op­ti­mum, Koorn­fontein and Op­ti­mum Coal Ter­mi­nal — for R2.97-billion.

“The restruc­tur­ing will com­prise ei­ther one or a com­bi­na­tion of the sale of the business as­sets . . . and/or the sale of the shares . . . in a con­trolled man­ner,” said Ra­ga­van.

Judge Hans-Joachim Fabri­cius re­served judg­ment on Fri­day to Septem­ber 21 in the ur­gent ap­pli­ca­tion to in­ter­dict the clo­sure of the Gup­tas’ ac­counts. The ap­pli­ca­tion to have the ter­mi­na­tion of ac­counts over­turned is set down for De­cem­ber 7.

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