Nine Gupta-linked companies yesterday lodged, then abandoned, an urgent court application to stop the State Bank of India from closing their bank accounts.
The companies, including Sahara Systems, Oakbay Investments, Tegeta Exploration, Linkway Trading and Sahara Computers, wanted the court to force the bank to keep their accounts open and in the case of Sahara Computers, to reopen the account pending further legal action.
The bank gave them notice in September that it had decided to terminate its dealings with the companies on the basis of the severe reputational risk in continuing to be associated with the companies and the Gupta family.
All the major banks in South Africa and other financial institutions have already cut ties with the companies.
Counsel for the companies had already started arguing the application before Judge Bill Prinsloo in the High Court in Pretoria but then suddenly withdrew the application and offered to pay the legal costs.
Six of the companies were among 20 Gupta companies which, in October, obtained an interim high court order to stop the India-based Bank of Baroda (BB) from closing their bank accounts, demanding the repayment of loans or limiting the operation of their bank accounts.
This was pending the launch of an application for an order to set aside BB’s decision to end their relationship or for an order giving them up to two years to get their affairs in order, including selling the businesses if necessary.
The court was told it was unlikely that this application would be determined before the first quarter of 2018.
Judge Tati Makgoka found at the time there was a very real prospect that more than 7 600 mostly unskilled and semiskilled workers would lose their jobs if the business of the companies collapsed because their bank accounts had been closed.
He said BB had not presented any concrete evidence that it had or would suffer reputational harm, or that its clients and associates had threatened to terminate their relationship if it was forced to continue its relationship with the Gupta companies.
The companies have accused the Reserve Bank of putting enormous illegal pressure on BB and other banks to terminate their relationship.