African News Agency
3 minute read
2 Sep 2016
4:34 pm

Opposition outcry over moves to target banks for breaking ties with Guptas

African News Agency

The opposition on Friday said Cabinet’s call for a judicial investigation into banks amounted to an onslaught on the sector to protect the influential family.

Ajay and Atul Gupta, and Duduzane Zuma. Picture: Gallo Images

“The recommendation to establish a Judicial Commission of Inquiry to look into the allegations surrounding the termination of banking relationships with Oakbay Investments (Pty) Ltd, amounts to a ‘political hit’, not just on the banking sector, but also on National Treasury and the South African Reserve Bank,” Democratic Alliance finance spokesman David Maynier said.

“And it proves that, although the Gupta family may now be less brazen, they are just as influential at getting exactly what they want from President Jacob Zuma.”

Maynier said the decision further pointed to the sway the Gupta family had over Mineral Resources Minister Mosebenzi Zwane, who chaired the inter-ministerial committee (IMC) that made recommendations to Cabinet on the subject.

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“Zwane … has served his ‘clients’, the Gupta family, well,” Maynier said before warning that the development was likely to lead to further financial market turmoil and job losses.

The Economic Freedom Fighters called Zwane a puppet of the Gupta family, who has routinely sought to advance their business interests.

“Mosebenzi Zwane and [Co-operative Governance Minister[ Des Van Rooyen are direct Gupta deployees to Cabinet and their recent rants and statements are instructions of the Gupta family, which is savagely using its power to protect its corrupt empire,” acting EFF spokesman Fana Mokoena said.

Fana Mokoena. (Photo by Gallo Images / City Press / Lucky Nxumalo)

Fana Mokoena. (Photo by Gallo Images / City Press / Lucky Nxumalo)

“The EFF calls on the banks and the auditing firms to disclose the real reasons why they disassociated with a criminal empire led by the Gupta family, and [to] do so in their own terms and under oath.

“The EFF also calls on the auditing firms and banks to open criminal charges against the Guptas for money laundering, racketeering and corruption in a manner that will be trialled in an independent Court of Law. Judicial commissions appointed by Jacob Zuma cannot be trusted,” he added.

This comes after the announcement late on Thursday of a Cabinet’s recommendation that President Jacob Zuma should institute a judicial inquiry into allegations that banks acted “unilaterally and allegedly in collusion” when they closed the banks accounts linked to the Gupta family and broke ties with Oakbay Investments.

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Zwane headed an IMC that has looked into the decision since April, on the stated motivation that the banks’ actions could lead to the loss of 7,500 if the Guptas were forced to close their companies and that investment in general could be negatively impacted.

The committee included Finance Minister Pravin Gordhan but, as Cabinet confirmed, he opted not to participate in its interviews with banks, insurance companies and Oakbay Investments itself.

Finance Minister Pravin Gordhan. Picture: Neil McCartney

Finance Minister Pravin Gordhan. Picture: Neil McCartney

Apart from recommending an inquiry, Cabinet also recommended a review of the mandates of the Banking Tribunal and the Banking Ombudsman.

“Evidence presented to the IMC indicated that all of the actions taken by the banks and financial institutions were as a result of innuendo and potentially reckless media statements, and as a South African company, Oakbay had very little recourse to the law.”

Strengthening the mandates of these watchdog institutions would help prevent other companies from finding themselves in a similar predicament.

Cabinet went as far as considering the reporting lines provided for in the Financial Intelligence Centre Act and the Prevention of Combating of Corrupt Activities Act as, it said, it was unclear whether the banks and the Reserve Bank had complied with these in the decisions surrounding Oakbay.

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And it suggested an eventual judicial inquiry should probe the Reserve Bank’s stance on issuing new banking licences.

“Evidence was also presented that these institutions may have placed undue pressure on banks that sought to assist the company by subjecting them to unwarranted auditing processes. It is unclear why the Reserve Bank will not issue new banking licences to other banks and this would need to be given careful attention by the Judicial Enquiry.”