Guptas banking on Post Office
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.