UPDATE: Absa closed Gupta accounts over large, unexplained transfers

Absa began reviewing the Gupta-owned business bank accounts as early as 2014 as explosive media reports on the controversial family increased, and did a risk assessment of the accounts, the state capture commission heard today.

Absa’s Yasmin Masithela told the commission that as a then subsidiary of Barclays PLC, Absa had to adhere to the AML (Anti-Money Laundering) policy which required that high risk and politically exposed customers undergo enhanced due diligence every year.

“In November 2014, Absa’s PEP committee [politically exposed persons committee] took a decision that we would exit the company [Oakbay] and related parties. The reasons forwarded by the committee was that Oakbay was not using Absa as its primary bank or dual bank, and Oakbay was apparently moving their banking accounts elsewhere. So Absa was therefor limited in its ability to monitoring the accounts,” said Masithela.

She said there was evidence of large unexplained transfer of funds by Oakbay to other banks. Absa could not account for these transfers, and the revenues the bank received from the Oakbay portfolio decreased over the years, said Masithela.

“There was also adverse media reports regarding Oakbay company, which increased the reputation and conduct risk arising from [the] continued relationship. It was on this basis that the committee reviewed the accounts and a due diligence took a decision to terminate the accounts.”

Absa cut off banking ties with the Guptas in December 2015. FNB, Standard Bank and Nedbank followed suit in 2016.

Similarly to FNB and Standard Bank, Absa was requested by the governing party to meet and discuss the Gupta accounts. Maithela said Absa met with then African National Congress (ANC) secretary general Gwede Mantashe, as well as Enoch Godongwana, Jessie Duarte and Krish Naidoo.

The bank made it clear that the bank-client relationship would not be discussed, leading to the meeting discussing bank regulations and rules.

Masithela said during the meeting, an allegation that the banks had colluded to close the accounts of the Guptas was raised.

A request later for a meeting by the inter-ministerial committee, chaired by then minerals minister Mosebenzi Zwane, was turned down. Masithela said her bank decided not to meet with Zwane and his committee as repeated attempts to get information from the committee secretary on the agenda and who would be at the meeting were never answered.

Representatives from Nedbank are expected to give testimony at the inquiry tomorrow.

For more news your way, download The Citizen’s app for iOS and Android.