Guptas in last-gasp court bid to stop Bank of Baroda account closures

08 September 2017 - 08:47 By Kyle Cowan
The Pretoria High Court.
The Pretoria High Court.
Image: Google

Companies owned by the embattled Gupta family will be in the Pretoria High Court on Friday in an attempt to stop the Bank of Baroda from closing their accounts.

Around 20 Gupta-owned or linked companies will approach the court for an interdict.

These include tech distribution firm Annex Distribution‚ Confident Concepts‚ Sahara Computers‚ VR Laser Services‚ property owner Islandsite Investments 188‚ Koornfontein Mines‚ Oakbay Investments‚ Optimum Coal Mine‚ Shiva Uranium‚ Tegeta Exploration‚ Westdawn Investments‚ Idwala Coal‚ and Mabengela Investments‚ all of which feature prominently in the leaked Gupta e-mails.

Many of the companies share Oakbay CEO Ronica Ragavan as director. Ragavan said in court papers the combined salary bill for the entities is R164-million.

Baroda gave the family three months notice of the closures‚ which are due to come into effect at the end of September.

The Daily Maverick reported on Friday morning that Baroda’s court papers reveal “in devastating detail why it can no longer entertain the high-risk‚ politically exposed Gupta empire”. 

On Monday news broke that Baroda had been fined R11-million by the Financial Intelligence Centre (FIC) for various transgressions of banking legislation during the Guptas’ purchase of Optimum Coal Mine.

The papers show that Baroda reported 45 suspicious transactions with the FIC between 16 September 2016 and 14 July 2017. These transactions amount to a staggering R4.2-billion.

The big four banks closed Gupta-linked accounts last year and after various other banks refused to accommodate them‚ forcing the family to make use of Baroda for all its local financial needs.

According to the Daily Maverick report‚ the Gupta companies maintain that if Baroda follows through on the shutdown‚ they would be unable to pay salaries to thousands of workers and claim that it would ultimately “lead to their demise”.

Baroda meanwhile has asserted its small staff complement of 16 is not adequate to monitor the Gupta accounts at a high level and suggests that Gupta-owned companies have entered into “contracts with local pay agencies to disburse salaries”.

Court papers charge that one of these pay agencies also receives SA Revenue Service payments due to affected Gupta family companies.

Oakbay recently announced the sale of Tegeta‚ which owns Optimum Coal Mine‚ to an Emirati businessman Amin al Zarooni through a shelf company registered in Switzerland‚ Charles King SA.

This followed the announcement that former government spin doctor Mzwanele Manyi would be taking over Gupta-owned news station ANN7 and national daily newspaper‚ The New Age‚ in a R450-million vendor financing deal.

Speculation has been rife that the sales were simply a ploy to distance the Gupta family from the businesses through fronting‚ which would allow bank accounts to be reopened with larger banks.

Oakbay has touted these sales as an honest attempt to save jobs for their employees.