Indian bank played ‘highly suspicious’ role
INDIA’S Bank of Baroda played a highly suspicious role in the R2-billion purchase of Optimum Coal Holdings by Gupta-owned Tegeta Exploration and Resources‚ says former public protector Thuli Madonsela.
In what Madonsela described as her observations into whether any organ of state had acted unlawfully‚ improperly or corruptly in offering financing facilities to the Guptas‚ she says: “In December 2015, the loan consortium requested Tegeta to provide proof of funding to consider its offer.
“Despite‚ at the time‚ having an existing established banking relationship with two of the biggest banks in South Africa‚ Tegeta decided to use the Bank of Baroda as its partner to execute the payment required to purchase [Optimum].
“On 4 March 2016 the Bank of Baroda issued an untitled letter to FirstRand Bank Limited setting out that Tegeta was its client and that it would effect payment of R2.15-billion on certain conditions.
“However‚ financial analysis confirms the Bank of Baroda did not grant a loan to Tegeta to purchase [Optimum]. Tegeta raised the funds . . . from various sources.
“All funds were deposited via at least 32 electronic funds transfers between 9 December 2015 and 14 April 2016 into the Bank of Baroda. The Bank of Baroda then effected payment on behalf of Tegeta on 14 April 2016 into the escrow account held by Werksmans Incorporated.
“The conduct of the Bank of Baroda appears highly suspicious in light of the wording of their letter and their tacit agreement for Tegeta to receive more than R2.15-billion into its account over four months without raising suspicion or concern on the part of the bank.
“The frequency and amounts deposited should have attracted attention and an investigation by other financial institutions’ anti-money laundering departments due to . . . risks based on the Financial Intelligence Centre’s guidance note concerning the reporting of suspicious and unusual financial transactions.”
Madonsela also raises questions about the bank’s handling of Optimum’s rehabilitation fund‚ saying it is in contravention of the National Environmental Management Act.