Zondo seeks Gupta bank transactions
Big four are subpoenaed to produce records of Gupta deals with SOEs
Banks have been ordered to hand the Zondo commission details of transactions between the Guptas and state-owned companies.
Absa, Standard Bank, First National Bank and Nedbank have been served with subpoenas as the state capture inquiry intensifies its investigation into links between the Guptas and companies such as Eskom, Transnet and Denel.
Three of the four banks told the Sunday Times they would comply with the subpoenas, understood to name Gupta companies including Oakbay Resources, Tegeta Exploration and Resources and VR Laser Services, as well as associates such as Trillian Capital Partners.
Bank of Baroda is also expected to be summonsed. It continued to do business with Gupta entities after the big four banks closed their accounts in 2016, saying only last year that it would stop doing so.
● The Zondo commission has subpoenaed South Africa’s major banks to submit details of transactions of the Gupta family and their entities relating to major deals involving state-owned companies that were part of the state capture project.
The Sunday Times has learnt that Absa, Standard Bank, First National Bank and Nedbank were all served with subpoenas that compel them to provide the state-capture inquiry with what would otherwise be confidential client information.
The move indicates that the inquiry is now stepping into high gear, focusing on the Guptas’ web of influence and how funds were looted from state-owned companies such as Eskom, Transnet and Denel.
According to a source close to the process, the subpoenas request that the banks submit all correspondence and the record of transactions relating to major deals involving Gupta companies such as Oakbay Resources, Optimum Coal Mine, Tegeta Exploration and Resources and VR Laser Services, as well as companies of associates such as Trillian Capital Partners.
Among the deals under scrutiny will be Eskom’s prepayment to Tegeta of the exact sum of money required to purchase Optimum Coal Mine, and Transnet’s purchase of 1,064 locomotives at grossly inflated costs.
The records are expected to be handed over to the commission in the next few weeks.
Representatives of the four banks testified last month about the closure of the Gupta accounts and interventions by members of the cabinet and the ANC to get the family businesses transacting again.
Their testimonies were in response to requests from the commission for information about the account closures and alleged executive interference.
At the time, some of the bank executives said they were surprised that the commission’s legal team did not probe them for more details about Gupta transactions that had triggered fears of possible money laundering and illicit financial flows.
Commission spokesperson Reverend Mbuyiselo Stemela said deputy chief justice Raymond Zondo indicated last month that the banks would “be engaged in the future should we require them”.
“More documents and information [were] subpoenaed from the banks,” Stemela confirmed to the Sunday Times.
Standard Bank special counsel Ian Sinton, who testified last month, told the Sunday Times the bank was co-operating with the state capture commission. He said in terms of the bank’s policy of proactive co-operation, “where such co-operation does not concern information confidential to customers, we give it voluntarily, and where it concerns information confidential to customers, it is provided under subpoena”.
Absa spokesperson Songezo Zibi confirmed the subpoena, saying: “We will co-operate with the commission in relation to its terms of reference and its powers.”
FNB’s Dumezulu Shiburi said the bank would assist the commission with all requests for information. “Due to confidentiality, the bank is unable to provide details around the nature of specific requests.”
Nedbank’s Kedibone Molopyane said the bank was “not at liberty to disclose whether any summons have been received in light of the commission’s pending investigations”.
The Sunday Times understands that the Bank of Baroda will also be summonsed to provide information as it continued to service Gupta entities and linked companies after the big four banks shut the accounts in 2016. Last year the Bank of Baroda also served notice that it would terminate Gupta accounts and sever all ties with their companies.
The commission resumes on November 12 with testimony from former public enterprises minister Barbara Hogan. Pravin Gordhan, who now holds the portfolio, will testify three days later. Their evidence was postponed to give notice to those implicated in their statements, including ex-president Jacob Zuma.
A former director-general of the National Treasury, Lungisa Fuzile, is expected to testify later in November on the pressure the department faced from the presidency and cabinet to approve mega deals even though they were unaffordable.
Former deputy finance minister Mcebisi Jonas is expected to return to the witness stand to complete his evidence before the commission closes its public hearings for the year in mid-December.