Bank of Baroda ordered not to close Gupta accounts

09 October 2017 - 15:14 By Kyle Cowan
Billionaire businessman Atul Gupta. File photo,
Billionaire businessman Atul Gupta. File photo,
Image: Kevin Sutherland

The Gupta family has been given 15 days by the Pretoria High Court to launch their final court application to challenge the closure of their bank accounts with the Bank of Baroda.

Judge Tati Makgoka on Monday granted an application for an interim interdict brought by 20 Gupta-linked companies to stay the closures.

If the Gupta family fails to meet the deadline‚ Judge Makgoka ordered‚ the interim interdict will lapse.

Baroda now may not deactivate the accounts‚ impede or limit the manner in which the accounts are operated‚ nor demand the repayment of loans and overdraft facilities as cited in the termination notices Baroda sent to the Gupta family in July.

Makgoka said in his judgement that he accepted that all the companies applying for the interdict were either controlled by or linked with the Gupta family.

“There are serious allegations of unlawful conduct‚ including corruption and money-laundering‚ against some members of that family. They also allegedly have influence over the President of the Republic as to the appointment and removal of cabinet ministers‚ and appointments to key positions in state-owned entities‚ for financial gain.”

“The latter allegations‚ by their mere existence‚ concern the very fundament of our nationhood and statehood. They go to the foundation and architecture of our constitutional sovereignty. Thus‚ there is an understandable outrage in certain sectors of the public. But‚ for us in our capacity as judiciary officers‚ when adjudicating matters involving members of this family or their associated entities‚ we must not allow the legitimate public outrage against that family‚ or even our own inclinations‚ to influence our judicial-making processes. Thus‚ this case‚ like any other‚ must be decided by the application of the law‚ without fear‚ favour or prejudice‚” Makgoka said.

He explained that the application before him was merely the hearing of the main application by the Guptas that was enrolled for early December‚ brought forward on an accelerated basis as per a decision by the deputy judge president. “It is not a ‘re-hearing’ of issues dealt with on 21 September‚ nor is this an 'appeal' against the order made. This hearing is not meant to determine whether the bank is ultimately entitled to close the applicants’ bank accounts. The applicants seek an interim interdict preserving the status quo‚ pending an application to be launched‚ challenging the validity of the notices given by the bank to terminate its relationship with them‚” Makgoka explained.

Makgoka also said that a business entity must‚ in order to carry out its objects‚ have one or more bank accounts as it was all but impossible for a person to do business without operating through a bank.

“The (…) applicants collectively employ approximately 7 652 employees across their various businesses‚ including a large number of mineworkers. It cannot be seriously argued that large-scale business entities such as the applicants can survive without banking facilities. The applicants would inevitably be forced out of business‚” he said‚ dismissing the argument brought by the bank that members of the Gupta family could transfer money from their own overseas accounts.

He said the fact that allegations against the Gupta family had been in the public space for years debunked Baroda’s argument that continued association with the family would cause reputational harm.