Mosebenzi Zwane made ‘veiled threats’ to Nedbank on Gupta account closures

Nedbank Group CEO Mike Brown has detailed how the commercial bank was strong-armed with “veiled threats” by former mineral resources minister Mosebenzi Zwane to reverse its decision to close Gupta-linked bank accounts in 2016.

Brown, who testified at the State Capture Commission of Inquiry on Wednesday, said Zwane suggested at an Inter-Ministerial Committee (IMC) meeting on May 6, 2016, that Nedbank should “step in” and “become a primary transaction bank for the Gupta-family”.

After the conclusion of the IMC meeting — which was unusually held in Zwane’s office (such meetings are usually reserved for Parliament) — Zwane reminded Brown that commercial banks in SA received their banking licence from the government.

“I found it to be a strange statement. It felt like a threat as the subtext [of Zwane’s statement] was ‘be careful, things could happen to your licence if you don’t do things in a particular way’,” said Brown.

“The numerous referencing to the licensing regime [by Zwane] was the pressure placed on the bank.”

Zwane, a known lackey to the Gupta family, was the chair of the IMC, which was set up by members of former president Jacob Zuma’s cabinet after the big four banks — Nedbank, Absa, Standard Bank, and FNB — severed ties with the family over its suspicious transactions.

“I left the IMC meeting with the impression that a good outcome for the IMC was for Nedbank to save the Gupta family, which Nedbank was not prepared to do.”

In his attempt to convince Nedbank to reopen the accounts, Zwane told Brown that the closure of the accounts would result in “16 000 job losses” as the Gupta entities would not have banking facilities.

Between April 7 and May 7, Nedbank shut the accounts of Gupta-owned entities including Oakbay Investments, Confident Concepts, Sahara Computers, and VR Laser Services — which were all central to the state capture project. Brown said the entities posed reputational and business risk to Nedbank and, after careful consideration, the bank exercised its contractual right to terminate the bank accounts.

Brown’s testimony concurs that of Ian Sinton, Standard Bank’s former head of legal compliance, who told the inquiry on Monday that Zwane also threatened to take away the bank’s licence if it didn’t reverse its decision to close Gupta-entity bank accounts.

Brown said the IMC meeting made him uncomfortable, as its members wanted to discuss reasons for Nedbank shutting Gupta-entity accounts. He refused to talk about “client-bank relationship” as it was illegal but was prepared to speak about legislation and regulations governing operations of banks.

But Zwane acted with impunity accusing the big four banks of colluding to close Gupta-entity accounts. In Nedbank’s case, Zwane accused one of the bank’s staff member of taking to another banking institution about the closure of Gupta-entity accounts.

“I refuted this and said we didn’t have any conversation with banks about the closure of specific accounts. We have corresponding relationships with other banks. It would be normal to have a conversation with other banks when we do our diligence and discuss general money laundering.

“Nedbank independently closed the bank accounts and didn’t consult or collude with other banks.”

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