Guptas win battle of the Indian bank
OVER 7 600 CAN LOSE JOBS IF ACCOUNTS CLOSE Harsh words for Baroda as high court sides with large number of mineworkers.
There is a very real prospect that more than 7 600 mostly unskilled and semiskilled workers will lose their jobs if the businesses of 20 Gupta companies collapse because their bank accounts have been closed, according to a high court judge.
Judge Tati Makgoka yesterday granted an interim order to the Gupta-linked companies, interdicting the India-based Bank of Baroda (BB) from closing their bank accounts, demanding the repayment of loans or limiting the operation of their bank accounts.
This was pending the launch of an application by the companies aimed at setting aside BB’s decision to end their relationship or giving them up to two years to get their affairs in order, including selling the businesses if needed.
A similar bid was earlier turned down by another judge, causing the companies to ask for an accelerated hearing of their interdict application.
The companies have accused the SA Reserve Bank of putting illegal pressure on BB and other banks to terminate their relationship.
Judge Makgoka said the fact that 7 600 workers, including a large number of mineworkers, faced a real prospect of losing their jobs if the businesses collapsed weighed more heavily with him than the parties’ commercial interests.
He said the companies were all large commercial entities and it could not be seriously argued that such companies could survive without banking facilities.
The suggestion that their employees and suppliers could be paid through pay agents ignored the fact that it was nearly impossible to conduct business without banking facilities.
The judge also shot down BB’s suggestion that the Gupta companies could use overseas banking accounts for conducting business, as they would have to find a way to physically remove money out of the country, which was not an option.
He said BB had not presented any concrete evidence that it had or would suffer reputational harm or that its clients and associates had threatened to terminate their relationships it was forced to continue its relationship with the Gupta companies.