OUTA coming for the Guptas and their banks

The Organisation Undoing Tax Abuse (OUTA) is #ArrestingStateCapture by taking legal action against the Bank of Baroda and the State Bank of India for failing to comply with banking laws in their relationship with the contentious Gupta family.

“We have compiled evidence to take action against these banks and handed it to the Registrar of Banks and the Financial Intelligence Centre (FIC).

“We want these authorities to act to ensure that the Bank of Baroda and the Bank of India cease all business with the Guptas‚ and revoke their licences to trade within South Africa.” says Ben Theron‚ Chief Operations Officer of OUTA.

According to OUTA‚ in August 2016‚ the FIC listed 72 suspicious transactions on Gupta-linked bank accounts‚ which took place from December 2012 to June 2016 and involved a total of R6.839-billion. Various banks subsequently closed the Guptas’ bank accounts.

OUTA's investigation found suspicious financial transactions predating that list‚ from 2002 and stretching over years.

“We found that the businesses linked to the Guptas bought properties over more than a decade for a total of R245 million – more than R50 million was paid in cash – but managed to get bonds on these properties totalling nearly R1 billion‚ an amount that far exceeds the value of these properties. The Bank of Baroda provided bonds valued at R811 million and the Bank of India provided bonds of R176 million; the remaining R11 million came from FirstRand.

The transactions linked to the Bank of Baroda and the Bank of India are particularly problematic‚” said Theron.

The organisation further said that some properties appeared to have had massively inflated values.

“For example‚ the Guptas’ company Islandsite 180 bought two Cape Town flats in 2006 for R2.8 million each and two years later the Bank of India generously provided bonds of R24 million on each flat. This is 8.5 times the purchase price.

“In another instance‚ the Guptas’ company Confident Concept bought a farm in Mpumalanga for R40 million but a year later this was bonded by the Bank of Baroda for R426 million: more than 10 times the purchase price. These bonds are apparently still active‚” he added.

On the 4th of June the Sunday Times reported suspicions of money laundering as the Gupta family spread tentacles far and wide.

Using leaked Gupta e-mails‚ the Sunday Times pieced together transfer requests from Oakbay to Sahara CEO Ashu Chawla which blow the lid on how the family moved money around and out of South Africa.

“Their modus operandi: break down large sums into lesser amounts and shuttle them through a number of companies before they reach the Bank of Baroda‚” the article read.

- TimesLIVE