Absa asks Madiba-Zuma to explain millions of rands in account

Absa is said to have threatened to close down a bank account held by President Jacob Zuma's wife Tobeka Madiba-Zuma, flagging unexplained millions of rands passing through her account.

The bank's move comes a year after it ended business relations with Zuma's son Duduzane. It follows the major banks taking a firm stance against commercial entities linked to the Gupta family, in spite of pleas by cabinet ministers close to Zuma.

Last year it emerged that the banks had closed all the business accounts of Gupta-owned companies; leaked e-mails also show that around the same time Absa closed both Duduzane's transactional accounts (cheque and credit).

It is not clear whether the action against Madiba-Zuma is linked to the Gupta-related controversy with the banks.

Sources said the bank wanted her to explain large sums of money in her account.

Madiba-Zuma has denied receiving a letter from Absa about its concerns. The Sunday Times understands she has yet to respond to the bank.

The Guptas have been waging a public and private battle against the major banks since they gave notice of their intention to shut the accounts of Gupta entities, including their holding company Oakbay, in late 2015.

Gupta e-mails leaked to the Sunday Times detail how Duduzane played the race card in his appeal to Barclays Africa CEO Maria Ramos to reverse the bank's action.

Revelations that the bank i s targeting accounts held by the Zuma family may explain the political pressure that has been put on Absa since last year. There appears to have been a well-orchestrated strategy by Zuma backers to take on the bank.

The fight has been led by ANC Youth League president Collen Maine, who led a march on its head office in February demanding that it pay back R1.5-billion that the Reserve Bank gave Bankorp, which later became Absa.

Madiba-Zuma said questions put to her by the Sunday Times about her bank account were an invasion of privacy. "I have no knowledge of Absa's intention to close my account. I have not received anything which has been communicated to me."

But an insider said the letter was sent to Madiba-Zuma early this year.

"This is part of a routine check for her to help the bank to understand the source of the monies and the change in behaviour in her account. If she doesn't provide the bank with that information then it becomes suspicious," said one source.

Another source said the amounts that Absa had flagged were millions of rands and out of the ordinary.

"If she does not give an explanation, Absa will have to flag and report this to the [Financial Intelligence Centre]," the source said.

Madiba-Zuma - who along with Zuma's other wives enjoys perks worth millions of rands, including housing, vehicles, security and benefits for her children - does not get a salary from the state.

She heads up a foundation named after her that focuses on girls, HIV prevention and health services.

It is unclear whether her nonprofit organisation has raised funds as the website is down and a report on its work is not readily available.

According to company records she is a shareholder in a property company, Lavender Sky Investments, and two investment companies, Cherry Moss Trade and Invest and Glenlyn Investments.

It is not clear if she received remuneration from the companies.

Duduzane's accounts were shut down in February last year after the bank picked up a suspicious movement of funds in his account.

According to the Gupta e-mails, Duduzane received a letter from Absa's CEO for customer channels, Gerret Oosthuizen, on February 17 2016, giving notice of the closure of his accounts. The letter said: "We are writing to advise you that following a review of our business relationship, a decision has been taken to cease our provision of banking/investment services to you. As a result of this decision, your accounts and/or products will be closed within 30 days from the date of this letter."

The Gupta e-mails show that Duduzane and former Oakbay CEO Nazeem Howa tried in earnest to have the bank reverse its decision.

For about two weeks Howa repeatedly pleaded with Absa to respond to a letter he had written, but got no response.

A separate bank letter to Duduzane showed his credit card account was closed on February 17 and he was asked to settle the outstanding balance and interest in full.

Duduzane had earlier e-mailed Ramos asking for assistance.

The closure of Duduzane's accounts took place a few months after the four leading banks closed the bank accounts of Gupta companies. Duduzane is a business partner of the Guptas.

Duduzane did not respond to questions sent to him.

Absa spokesman Songezo Zibi said the bank could not comment because of client confidentiality.

"This includes disclosing on our own whether or not someone was or is a client of ours.It is their private and confidential information. In the context of your questions this includes whether or not we communicated with any state agency regarding a client," he said.

In response to Duduzane last year after the bank informed him of its intentions to close down his accounts, Ramos denied any racial motivation behind the move.

"I can assure you that Barclays Africa Group Limited and Absa Bank Limited do not engage in the sort of race-based conduct about which you speculate in your letter," Ramos wrote.

Ronica Ragavan, Oakbay's chief financial officer at the time, also objected when Absa informed the company it was closing its accounts.

"The decision to close the accounts is not ours, but rather a unilateral decision by Absa with deadlines imposed on us by the closure of our accounts. This was done in writing by the bank on December 18, giving us until February 16 to make alternative arrangements," she wrote to Absa.

According to Absa's policy the bank is at liberty to ask any person of interest or politically exposed persons to explain transactions if their accounts are flagged.

"Absa, as a registered bank, has a clear and unequivocal obligation in terms of South African law to implement sound risk-management processes, procedures and controls to manage financial crime risks, including risks relating to money laundering and terrorist financing," said Absa in an affidavit deposed by head of compliance Yasmin Masithela over the closure of the Gupta accounts. Masithela said the bank was obliged to follow policies that require extensive due diligence for "higher-risk clients".

The revelation that Duduzane's accounts were closed by the bank strengthens the assertion of former public protector Thuli Madonsela that the cabinet's attempt to intervene in the matter of the banks closing Gupta-linked accounts may indicate a conflict of interest for the president. - Additional reporting by Thanduxolo Jika

hunterq@sundaytimes.co.za and sabaa@sundaytimes.co.za