Pravin Gordhan says he told the Guptas to take banks to court

It remains a mystery why the Guptas have not taken their battle over the closure of their bank accounts to court.

Finance Minister Pravin Gordhan said he told Oakbay CEO Nazeem Howa as far back as May 24 to challenge the decision by, among others Absa, to close their accounts.

Responding to a parliamentary question, Gordhan, in a written reply, said he and a senior team from treasury met with Howa just over a month after Howa requested an intervention to avoid job losses as a result of the banks having taken the drastic step.

“I pointed out that the best, and only, course of action for any corporate client would be for the company to approach a competent court to seek the reason for the closure of their accounts and to establish its rights and to deal with any alleged transgressions of the law or of the Code of Banking Practice, which cover the process that banks have agreed to when closing accounts.”

“I noted my concern for any loss of jobs at any time in our economy, be it at Oakbay, Exxaro or any other company,” Gordhan said.

Gordhan, in his parliamentary response, said he told Howa that it would be illegal for him to intervene in the matter and asked to be provided with copies of letters the banks had given the company when they terminated the Oakbay accounts.

To date Gordhan said he has not received those.

Howa, though later in a television interview, said one of the banks had provided the following as part of its reason for the decision.

“… South Africa’s Companies Act, Regulation 43, Prevention of Organised Crime Act, Prevention and Combating of Corrupt Activities Act and the Financial Intelligence Centre Act, as well as the USA’s Foreign Corrupt Practices Act and UK’s Bribery Act, prevent us from having dealings with any person or entity who a reasonably diligent (and vigilant) person would suspect that such dealings could directly or indirectly make us party to or accessory to contraventions of that law.”

Said Gordhan: “Mr Howa further indicated that the bank stated ‘We have enhance[d] due diligence of Oakbay entities and as required by the Financial Intelligence Centre Act and have concluded that continuing with any bank-customer relationship with them would increase our risk of exposure to contravention of the mentioned law to an unacceptable level.”

These reasons provided by Howa (during the televised interview) were “very serious” and it was in the interest of Oakbay to go to court if it had nothing to hide or to correct any misperceptions that banks may have about the company, Gordhan said.

“It should be borne in mind that the 2003 UN Convention Against Corruption requires banks in member countries like South Africa to take preventative action against corruption and money laundering,” Gordhan said.

He said despite having had this one meeting with Oakbay, he remains of the view that he would not be able to help the company in any way and that he had been advised that doing so would be “legally impermissible”.

Taking their battle to court would shed light on the banks’ reasons without any confidentiality obligations being transgressed, Gordhan said.

Oakbay spokesperson Gary Naidoo could not immediately be reached for comment. 

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