National 23.12.2016 10:20 am

Absa says Gordhan’s intervention in Guptas’ bank row would be unlawful

Finance Minister Pravin Gordhan delivering his 2016 Mid Term Budget Speech in Parliament, Cape Town.26/10/2016 gcis

Finance Minister Pravin Gordhan delivering his 2016 Mid Term Budget Speech in Parliament, Cape Town.26/10/2016 gcis

Earlier this year, the country’s four major banks terminated their services to the family’s businesses.

Absa has joined Finance Minister Pravin Gordhan’s legal bid seeking a declaratory order stating that cabinet ministers cannot intervene in the impasse between the country’s major banks and Gupta-owned companies.

According to an answering affidavit‚ dated December 22‚ released by Absa in the matter between the minister and various Gupta-owned businesses, the bank said it would be illegal and beyond the legal scope of his legal powers to intervene in the impasse between the banks and the controversial family at the centre of “state capture” allegations.

Earlier this year, the country’s four major banks terminated their services to the family’s businesses.

In October, Gordhan approached the Pretoria High Court to order that he has no authority to stop banks from closing the accounts linked to the Guptas’ Oakbay Investments businesses.

In his affidavit‚ Gordhan had noted 72 flagged transactions by the Financial Intelligence Centre totalling about R6.8 billion by the Guptas and their companies.

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The minister received repeated requests from the family to intervene and other ministers.

The affidavit from Absa was deposed by the bank’s head of compliance‚ Yasmin Masithela‚ and released on Thursday in response to Gordhan’s application.

The affidavit states that Gordhan’s intervention would “have greatly undermined confidence in the banking sector and raised the spectre of state intervention in private commercial relationships‚ arbitrarily and at the instance of a select group of companies and persons”.

It adds that the minister’s intervention would “have set a dangerous precedent for the banking industry as a whole‚ would have been contrary to the public interest and would have created real risks for the confidentiality of the relationship between banks and clients”.

Masithela also said that it would have compromised Absa’s “relationship as a correspondent bank with its international clearing banks”.

Other banks that support the minister’s application include First Rand Bank, which earlier this month said an order indicating that ministers could not intervene in the relationship between banks and their clients would encourage public officials to act according to the law.

READ THE FULL AFFIDAVIT BELOW:

Absa’s Answering Affidavit to Finance Minister’s application by SundayTimesZA on Scribd

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