National 29.3.2017 06:52 pm

Treasury to respond to Gupta associate’s bank bid

Habib Overseas Bank - oriental plaza fordsburg  - Photo Delwyn Verasamy

Habib Overseas Bank - oriental plaza fordsburg - Photo Delwyn Verasamy

Vardospan is seeking a declaratory order relating to its bid to purchase the Habib Overseas Bank.

The finance ministry will on Thursday, respond to a court application by Vardospan for a declaratory order relating to its bid to buy Habib Overseas Bank.

This was the deadline for National Treasury to file papers in reply to Vardospan, who went to court on Monday, in apparent frustration at its failure to secure approval for the acquisition.

“We will see them in court, the deadline was for Thursday,” a source at National Treasury said, adding that the response was likely to map out the process that was required for approval to buy the bank, which is owned by Pitcairns Finance in Luxembourg.

Vardospan is seeking an explanation as to why the South African Reserve Bank, the Registrar of Banks and embattled Finance Minister Pravin Gordhan have not yet pronounced on the deal.

However, National Treasury said, because of the relatively low figures involved, the decision was not that of Gordhan, but of the Reserve Bank.

The minister could only say whether he concurred or differed.

However, on Wednesday afternoon Hamza Farooqui, the director of Vardospan, issued a statement accusing Gordhan of blocking an acquisition that would favour the country’s black majority.

“It is plain to see that a transformational deal for black South Africans is being stalled by the finance minister. What is his motive? Is he just protecting his friends and colleagues in South Africa’s major banks in which he owns shares? We have been left with no alternative but to take this to court.”

He noted that Vardospan informed authorities in August last year that it planned to acquire Habib Overseas Bank and that the Competition Commission gave its go-ahead for the deal in mid-January.

“Approval from the Minister of Finance and the Reserve Bank are now the only barriers preventing the completion of this transformative acquisition,” Farooqui said.

His partner in Vardospan is Salim Essa, a business associate of the politically connected Gupta family. The pair formed the company with the aim of buying the bank.

Their approach to the court comes in the same week that the Bank of Baroda is set to close the Guptas’s bank accounts, at the instructions of its Indian parent company.

Last year, four local banks blacklisted the family. The Bank of China followed suit.

The Pretoria High Court on Wednesday, reserved judgment in a case which saw Gordhan seek a declaratory order that he may not intervene in the relationship between banks and their clients.

Gordhan has said in court papers that he was hounded by the Gupta family to use his political position to lean on the banks to revoke their decision.

The minister’s job is seen as hanging in the balance after President Jacob Zuma on Monday ordered him to interrupt talks with international investors and return to South Africa. Zuma gave no explanation for the move, which sent the rand plummeting and prompted renewed speculation that a Cabinet reshuffle was imminent.

– African News Agency

Gupta associate gets green light to buy bank

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