Canadian bank in urgent SA court bid to ground Gupta jet
THE Canadian bank that lent the Guptas 41-million Canadian dollars (R377-million) to buy their Bombardier jet urgently want to get their hands on the plane‚ saying they fear it could be seized by the asset forfeiture unit.
Advocate Alfred Cockrell‚ appearing for Export Development Canada (EDC)‚ said the Hawks raids on Gupta homes‚ AFU preservation orders for their properties and bank accounts, and the family’s decision to switch off the tracking device on their jet had prompted the bank to go to court urgently to ground the aircraft.
The EDC wants the Bombardier Global 6 000 with the tail number ZS-OAK grounded because the family defaulted on repayments and to stop it from being used to commit crimes or flee from justice.
The bank’s application to ground the jet was being heard in the South Gauteng High Court yesterday. The application was brought pending the outcome of legal proceedings in the United Kingdom to determine whether the bank lawfully terminated its loan agreement with the Guptas.
If the Guptas refuse to surrender the jet, the EDC has asked South Africa’s Civil Aviation Authority (CAA) to deregister the aircraft‚ which effectively means it would not be able to fly anywhere in the world. The CAA is not opposing the application.
The EDC issued the Guptas with a termination notice on December 13 after they
stopped making repayments and breached several loan covenants.
These included the failure by Gupta company Oakbay Investments‚ the corporate guarantor of the loan‚ to furnish the EDC with its annual financial statements.
Atul and his wife, Chetali Gupta, also personally stand surety for the loan. When the loan agreement was signed in 2015, Atul Gupta was listed as chairman of Oakbay but he resigned in October 2017.
The EDC regards this‚ as well as Oakbay’s plans to dispose of its companies Infinity Media and Tegeta‚ as further breaches of the agreement.
Other breaches cited by Cockrell include the delisting from the JSE by Oakbay Investment’s subsidiary Oakbay Resources after the company lost its sponsor and most of its bank accounts were closed.
“That is a material adverse change‚ on any reading‚” Cockrell said.
In an affidavit filed in the court proceedings, Gupta executive Ronica Ragavan said the Guptas were entitled to fly their jet around the world because the bank had unlawfully terminated the agreement.
The Guptas wanted to make loan repayments to the EDC but the bank had cancelled its lease with Stoneriver‚ a company in Ireland that holds the loan.
The Guptas had offered to exercise their right to end the lease and buy the aircraft but had not received a response from the EDC.
Ragavan said their offer would be accep- ted if the EDC was “truly interested in their commercial interests‚ rather than some unspecified political agenda which they now seem to harbour against the Guptas”.
Ragavan said that as a result the Guptas were “entitled to continue the enjoyment of the full spectrum of rights granted under the lease agreement”. She said the EDC’s case for urgency was “self-created” because it was based largely on the reputational damage the bank suffered from its business relationship with the family.
Ragavan pointed out that these scandals had been widely publicised since 2013‚ including in Canada. Yet the EDC had taken no steps to distance itself from the Guptas.
Instead, the bank continued to enjoy “a commercially beneficial relationship” with the family until its termination notice was sent in December last year and its urgent application lodged in February this year.
The case was therefore little more than “a public relations and face-saving exercise”‚ she said.
But Cockrell sketched a picture of dramatically escalating events from December 13‚ when the bank issued its first termination notice‚ and February 15‚ when it lodged its urgent application.
In the interim the Helen Suzman Foundation went to court seeking the return of R7-billion the Gupta companies were paid in allegedly corrupt contracts with Eskom‚ and the AFU obtained preservation orders for Gupta funds allegedly looted from the Estina dairy project in the Free State.
Both cases led the EDC to conclude there were additional grounds for cancelling the loan agreement. Then on February 4 “the tracking device on the jet was switched off”‚ Cockrell said.
“My client discovers for the first time they have no way of knowing where the aircraft is‚” he said‚ adding that “Dubai seems to be a popular landing ground for the aircraft”‚ as well as India.
Later last month, the Reserve Bank confirmed that the Bank of Baroda‚ the last bank that served the Guptas‚ would be leaving South Africa. Then‚ on February 14‚ the Hawks raided the Gupta compound in Saxonwold.
The case continues.