Standard Bank is looking for court protection from President Jacob Zuma’s administration.
In support of its appeal, the bank has filed an explosive affidavit in the High Court in Pretoria in which it details the extensive political pressure it came under from the ANC, Cabinet ministers and the Gupta family-owned company Oakbay after Standard Bank closed Oakbay’s accounts.
The three other major banks in South Africa did the same thing. FNB has already revealed that it suspected that the Guptas may have been using their bank accounts to launder money.
As with FNB’s affidavit, Standard Bank is supporting Finance Minister Pravin Gordhan’s application for a declaratory order from the court. Gordhan wants the court to declare that he does not have any authority to intervene in the relationships between banks and their clients.
Among the Cabinet ministers who want the banks to change their minds about dealing with the Guptas are Mining Minister Mosebenzi Zwane and Cooperative Governance Minister Des van Rooyen. The president himself has said in parliament that he found the behaviour of the banks “suspicious” and “does not look innocent. That is the problem we have.”
Standard Bank has now asked the court to confirm that no member of the executive, and not just the finance minister, may interfere between banks and their clients.
The bank’s affidavit reveals that Standard Bank was asked to meet both with the ANC as well as the Cabinet interministerial committee in an attempt to place it under political pressure to reverse its decision.
Gordhan filed the application earlier this year after four major financial services providers, including Standard Bank, cut ties with the Gupta-owned Oakbay Investments.
In its affidavit, Standard Bank said there was no legal basis for ministers to intervene in affairs between it and its customers. It said it wanted Gordhan’s request granted with costs.
Zwane came under fire in September this year after announcing that Cabinet would review South Africa’s banking regulations.
While Zuma initially denied reports that an interministerial committee on the banks had made a decision, he later said he was considering requests for a judicial commission of inquiry to investigate the Gupta account closures. This, Standard Bank said, had no legal basis.
The document was deposed by the bank’s general council, Ian Sinton, who, in it, said that the bank had fallen victim to a “wholesale public campaign” after the account closure in June this year, which included advertisements placed in the media.
Sinton added that the bank was also subjected to pressure from the ANC, trade union federation Cosatu and the South African Communist Party.
Gordhan’s high court application, filed in October, detailed “suspicious” bank transactions by Gupta-owned companies. In his application, he attached a document from the Financial Intelligence Centre detailing transactions made by Gupta-linked companies between 2012 and June 2016 valued at R6.8 billion and classified as “suspicious”.
Close friend of Zuma and one of the controlling shareholders of Oakbay, Atul Gupta, has recently been named the seventh richest black businessperson, valued at over R10 billion.
One of those transactions totalled an amount of R1.3 billion and was paid to a foreign bank from the Gupta-Zuma controlled Optimum Coal’s mining rehabilitation trust fund, which was later mentioned in former public protector Thuli Madonsela’s State of Capture report.
Under a cloud of suspicion, Optimum was bought last year by the Guptas’ Tegeta Exploration and Resources.
The company’s dealings with state power utility Eskom also came into question after it scored a contract to supply Eskom with coal.