FirstRand closed Gupta accounts due to money-laundering fears

South African lender FirstRand said on Monday suspicions of money-laundering lay behind its decision to cut ties with a business family linked to allegations of influence-peddling in President Jacob Zuma’s government.

FirstRand, South Africa’s biggest bank by market value, is the first lender to publicly disclose reasons for severing links earlier this year with Oakbay Investments, a company controlled by the Gupta brothers.

READ MORE: Revisionist accounting to the rescue for Gupta-owned Oakbay

The Gupta family, whose businesses range from media to mining, and Zuma have repeatedly denied wrongdoing. The Guptas’ lawyer said on Monday suspicions of money-laundering were groundless.

In an affidavit seen by Reuters, dated November 29, FirstRand Chief Executive Johan Burger said his company had closed Oakbay bank accounts to comply with international regulations.

“These practices and standards require us to take steps to prevent FirstRand being used for money-laundering and other unlawful activities,” Burger says in the court papers.

The Gupta family lawyer, Gert van der Merwe, told Reuters it took the accusations of money-laundering seriously and that it would deal with them in its own court application, to be filed by the end of the year.

“We want the real reasons for closing the accounts, not sweeping statements,” van der Merwe said.

“They’ve not disclosed any real reasons to show my clients are politically exposed people.”

Between December 2015 and April this year, all four major banks, also including Standard Bank, Nedbank and Barclays Africa, terminated the accounts of companies controlled by the Gupta family without making their reasons public.

READ MORE: Oakbay asks court to compel FIC to provide details on 72 ‘suspicious’ transactions

FirstRand’s court filing is in support of October’s application by Finance Minister Pravin Gordhan asking a court to declare he could not interfere with the decisions by the banks.

Barclays and Nedbank said they would file legal applications similar to FirstRand’s some time this week.

Last week Zuma sent back to parliament an anti-money-laundering bill that would have increased scrutiny of the bank accounts of “prominent individuals”, including himself. He declined to sign it into law, saying it might not be constitutional.

A report by the public protector, released on November 2, focused on allegations that businessmen Ajay, Atul and Rajesh Gupta had tried to influence the appointment of ministers. Zuma and the Gupta brothers have denied all the accusations.

The report called for a judicial inquiry to be set up by the president and for a judge to be appointed by the chief justice within 30 days of its release.

READ MORE: Explainer: Breaking down the implications of the #StateCaptureReport

Zuma has described it as “unfair” and last week launched a court bid to have it set aside. On Monday the opposition Democratic Alliance asked the constitutional court to compel the leader to appoint a judicial inquiry as recommended by former Public Protector Thuli Madonsela. 

PW Botha wagged his finger and banned us in 1988 but we stood firm. We built a reputation for fearless journalism, then, and now. Through these last 35 years, the Mail & Guardian has always been on the right side of history.

These days, we are on the trail of the merry band of corporates and politicians robbing South Africa of its own potential.

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


South Africa has been junked

Treasury says the credit ratings downgrade “could not have come at a worse time”, as country enters a 21-day Covid-19 lockdown with little money saved up

Mail & Guardian needs your help

Our job is to help give you the information we all need to participate in building this country, while holding those in power to account. But now the power to help us keep doing that is in your hands

Press Releases

The online value of executive education in a Covid-19 world

Executive education courses further develop the skills of leaders in the workplace

Sisa Ntshona urges everyone to stay home, and consider travelling later

Sisa Ntshona has urged everyone to limit their movements in line with government’s request

SAB Zenzele’s special AGM postponed until further notice

An arrangement has been announced for shareholders and retailers to receive a 77.5% cash payout

20th Edition of the National Teaching Awards

Teachers are seldom recognised but they are indispensable to the country's education system

Awards affirm the vital work that teachers do

Government is committed to empowering South Africa’s teachers with skills, knowledge and techniques for a changing world

SAB Zenzele special AGM rescheduled to March 25 2020

New voting arrangements are being made to safeguard the health of shareholders

Dimension Data launches Saturday School in PE

The Gauteng Saturday School has produced a number of success stories