The Guptas show no sign of heeding Gordhan’s advice to take the banks to court

Finance Minister Pravin Gordhan, in a meeting with Oakbay Investments in May, suggested that, if the company believes it has been unfairly treated by the commercial banks, it should take the matter to court, which is the only recourse available to medium to large companies.

All the major South African banks suspended their services to Oakbay Investments, owned by the controversial Gupta family, in April. The company is having to pay its employees through an international bank. The bank is thought to be Baroda, an Indian-headquartered bank, which has two branches in South Africa, one in Johannesburg and the other in Durban.

Last week, in answering questions in Parliament, Gordhan confirmed he had met the chief executive of Oakbay Investments, Nazeem Howa. The finance minister said, in his view, the only option available to Oakbay was to approach a competent court.

Oakbay said that a court action wasn’t out of the question and was perhaps something it could go back to. “However, the inevitably long lead time of any court action means the most rational strategy to date has been to explore all possible alternative solutions,” the company said.

But approaching the courts would appear to be the only recourse in this case. 

The ombud for banking services can deal only with complaints from individuals, small businesses (with an annual turnover of less than R5-million) and trusts or associations.

The Financial Services Board and the office of the ombud for financial service providers are also not empowered to deal with such a complaint, although the FSB said the South African Reserve Bank could. But the Reserve Bank refuted this.

“The South African Reserve Bank regulates and supervises banks in South Africa to achieve a sound, efficient banking system in the interest of depositors and the economy as a whole. It is not the mandate of the [bank] to intervene in dealings between banks and their clients,” said its spokesperson, Jabulani Sikhakhane. “Medium-sized and big corporate clients must, as some have, turn to the courts for recourse.”

Gordhan, responding to questions in Parliament, warned, however, that if Oakbay goes to court it should have nothing to hide.

As individuals, none of the Gupta brothers has laid a complaint with the ombud for banking services.

“Banks, from time to time, close the accounts of clients,” the ombud said.

The code of banking practice stipulates that banks can close accounts, without necessarily giving notice, if the bank is compelled to do so by law (or by international best practice), if the account has not been used for a significant time, or if the bank has reason to believe the account is being used for illegal purposes.

Oakbay has not launched any legal action, but the Gupta family did file a complaint with the national consumer commissioner in April.

These are unprecedented times, and the role of media to tell and record the story of South Africa as it develops is more important than ever. But it comes at a cost. Advertisers are cancelling campaigns, and our live events have come to an abrupt halt. Our income has been slashed.

The Mail & Guardian is a proud news publisher with roots stretching back 35 years. We’ve survived thanks to the support of our readers, we will need you to help us get through this.

To help us ensure another 35 future years of fiercely independent journalism, please subscribe.


The recovered remain cautious

People who have survived Covid-19 are not going through life carefree. They are still taking all the preventative measures

Lockdown relief scheme payouts to employees tops R14-billion

Now employers and employees can apply to the Unemployment Insurance Fund for relief scheme payments

Press Releases

Covid-19 and Frontline Workers

Who is caring for the healthcare workers? 'Working together is how we are going to get through this. It’s not just a marathon, it’s a relay'.

PPS webinar Part 2: Small business, big risk

The risks that businesses face and how they can be dealt with are something all business owners should be well acquainted with

Call for applications for the position of GCRO executive director

The Gauteng City-Region Observatory is seeking to appoint a high-calibre researcher and manager to be the executive director and to lead it

DriveRisk stays safe with high-tech thermal camera solution

Itec Evolve installed the screening device within a few days to help the driver behaviour company become compliant with health and safety regulations

Senwes launches Agri Value Chain Food Umbrella

South African farmers can now help to feed the needy by donating part of their bumper maize crop to delivery number 418668

Ethics and internal financial controls add value to the public sector

National treasury is rolling out accounting technician training programmes to upskill those who work in its finance units in public sector accounting principles

Lessons from South Korea for Africa’s development

'Leaders can push people through, through their vision and inspiration, based on their exemplary actions'

Old Mutual announces digital AGM

An ambitious plan to create Africa’s biggest digital classroom is intended to address one of the continent’s biggest challenges — access to education

The best local and international journalism

handpicked and in your inbox every weekday