PREMIUM FREE TRIAL

Dynamite new evidence: Guptas, Zwane – and nasty plan to hammer SA banks

New evidence has emerged linking the Gupta family and Mineral Resources Minister Mosebenzi Zwane to a plan to investigate South African banks that have blacklisted Gupta-owned businesses. In an exclusive story, Fin24 has revealed the details of conversations with the Guptas’ UK-based spin doctors Bell Pottinger, who tried to leak a story about the move to rattle South African commercial banks almost two months before Zwane released a statement announcing cabinet recommendations for a judicial inquiry. At the time, news of the investigation threatened to spark a financial crisis. The cabinet subsequently claimed that Zwane had acted beyond his powers, but this exposé points to his links with the Gupta family – Indians who have reportedly amassed extraordinary wealth in South Africa while working in association with the family of President Jacob Zuma. The PR company issued a peculiar statement in which it attempted to distance the Gupta family and Zwane from the source of the leak, yet it admits working for the Gupta family in the form of the Guptas’ Oakbay Investments. The revelations (below) by Fin24 highlight how senior politicians have set out to deceive citizens. Once again, South Africans will be asking: who runs South Africa? Jacob Zuma and the ANC or Ajay, Atul and Rajesh Gupta and their loyal henchmen? – Jackie Cameron

By Matthew le Cordeur

Cape Town – A public relations firm that represents the Gupta-owned Oakbay Investments knew about the recommendations for a judicial inquiry into South Africa’s banks at least seven weeks before it was controversially published by Mineral Resources Minister Mosebenzi Zwane, Fin24 can reveal.

Zwane was severely rebuked by the ANC and the presidency after announcing on 2 September that the inter-ministerial committee (IMC) set up by Cabinet to probe why South Africa’s banks blacklisted Gupta-owned businesses recommended that a judicial inquiry be set up.

Fin24 can now reveal that Bell Pottinger, the Guptas’ UK-based spin doctors, was in possession of Zwane’s “findings” as early as July 15 when they tried to leak a copy of the document to the media. The firm further recommended that Fin24 speak directly to Zwane and provided us contact details for the minister.

This raises fresh questions about Zwane’s proximity to the Gupta family and their businesses and the origins of the controversial IMC statement. Shortly after his appointment, Zwane travelled to Switzerland and met Glencore CEO Ivan Glasenberg to discuss the Guptas’ purchase of Glencore’s Optimum coal complex.

Gupta-inspired banking sector shake-up?
Gupta-inspired banking sector shake-up?

Zwane said the purpose of the meeting was to save jobs. In December 2015, Tegeta Exploration & Resources, which is partly owned by the Guptas and President Jacob Zuma’s son Duduzane, bought Optimum.

Bell Pottinger sent Fin24 a picture of a page from a confidential document containing the IMC’s recommendations to Cabinet on 15 July, indicating that they had “a scoop” for us.

Spokesperson Nick Lambert said in a WhatsApp exchange over five days that his source indicated that Zwane would be happy to speak to Fin24, and provided two cellphone numbers for the minister. Fin24 reached out to the minister’s spokesperson Martin Madlala.

Madlala told Fin24 in July by telephone that it was a matter for Cabinet to decide on and referred Fin24 to Zuma for comment. The spokesperson later told Fin24 that Zuma had indicated to Zwane that he should not to speak out on the matter at the time.

Lambert again recommended we speak to Zwane directly and not the spokesperson, which Fin24 decided not to do. Because there was no proof of the document’s authenticity or official confirmation thereof, Fin24 decided not to run with the story.

This week Bell Pottinger confirmed that it had been in possession of the document at the time, but said the source that provided them with the document was not the Guptas and that they had never met or spoken to Zwane before.

“Its source was not the Gupta family as News24 implies and Bell Pottinger has never met with or spoken to Minister Zwane or any of his advisors,” Bell Pottinger said in an emailed response to questions on Tuesday. (See the full response at the end of the story).

Approached for comment on Wednesday, Oakbay Investments CEO Nazeem Howa told Fin24 in an email response that “any questions regarding Bell Pottinger should be directed to Bell Pottinger”.

Attempts to reach Madlala for comment via email and telephonically failed on Wednesday.

Zwane, who chaired the IMC, rocked the country and the ANC with a statement published late on 1 September, in which he stated Cabinet approved that a judicial inquiry be considered to look into:

  • the current mandates of the Banking Tribunal and the Banking Ombudsman;
  • consider the current Financial Intelligence Centre Act (Fica) and the Prevention of Combating of Corrupt Activities Act in relation to the banks’ conduct;
  • re-consider South Africa’s clearing bank provisions to allow for new banking licences to be issued; and
  • look into the establishment of a state bank of South Africa with the possible corporatisation of the Post Bank being considered as an option.

Zwane said in the September statement that “evidence presented to the IMC suggested that all of South Africa’s economic power vests in the hands of very specific institutions, institutions who have shown that their ability to act unilaterally is within their mandate and is protected.

Cartoon courtesy of Twitter @brandanrey
Cartoon courtesy of Twitter @brandanrey

“These institutions are owned by private shareholders and report to National Treasury who in turn do not need to act on information provided to it.”

He said the IMC conducted a number of meetings with various banks, financial institutions and insurance companies as well as with representatives of Oakbay Investments.

“Although the Minister of Finance was a member of the constituted IMC, he did not participate in its meetings,” Zwane said.

Cabinet later confirmed that Gordhan chose not to participate in interviews with banks, insurance companies and Oakbay. Gordhan told Parliament he had advised the Guptas to approach the courts if they were unhappy with the decision of the banks to close their accounts.  

Actions a result of reckless media statements – Zwane

Zwane also said “evidence presented to the IMC indicated that all of the actions taken by the banks and financial institutions were as a result of innuendo and potentially reckless media statements, and as a South African company, Oakbay had very little recourse to the law”.

The Presidency almost immediately distanced itself and Cabinet from Zwane’s call for a judicial inquiry into the banking sector.

The Presidency said Zwane’s remarks were issued in his personal capacity and not on behalf of the task team or Cabinet.

Minister Zwane is a member of the task team. He does not speak on behalf of Cabinet and the contents of his statement do not reflect the position or views of Cabinet,” the Presidency spokesperson Bongani Ngqulunga said.  

“The unfortunate contents of the statement and the inconvenience and confusion caused by the issuing thereof, are deeply regretted.”

The Presidency also moved to quell fears of the public and investors.

“The Presidency wishes to assure the public, the banking sector as well as domestic and international investors of government’s unwavering commitment to the letter and spirit of the country’s Constitution as well as in the sound fiscal and economic fundamentals that underpin our economy.”

The ANC called on Zuma to discipline Zwane for his “ill-discipline”, calling his statement “outrageous, appalling and shocking”.

I won’t resign – Zwane

Zwane maintained in a grilling in Parliament on 7 September that Cabinet was dealing with the matter on the banks and the Gupta family.

Mosebenzi Zwane, South Africa's mineral resources minister, speaks on the opening day of the Investing in African Mining Indaba in Cape Town, South Africa, on Monday, Feb. 8, 2016. With many miners battling to stay afloat, fewer are willing to shell out 1,140 pounds ($1,641) for the Investing in African Mining Indaba conference in South Africa and business-class airfare. Photographer: Waldo Swiegers/Bloomberg *** Local Caption *** Mosebenzi Zwane
Mosebenzi Zwane, South Africa’s mineral resources minister

“Since that incident (the closure of the Guptas’ bank accounts), many have come forward saying they’ve ‘suffered’ at the hand of banks,” Zwane said. “Many South Africans have been subjected to this kind of abuse.”

He said he would not resign in response to an urgent question from the DA’s David Maynier allowed by Speaker Baleka Mbete ahead of the official oral questions posed to ministers in the economics cluster.

He said he appreciated the question that has been asked, “but there’s a separation of powers and this matter – whether I resign or not – the matter belongs to the Cabinet. As a result, the Honourable Maynier cannot ask me whether I’ll resign or not.”

Full statement by Bell Pottinger on Tuesday:

“There has been significant media coverage of the closure of Oakbay’s bank accounts. Oakbay has supported the IMC’s recommendation for a Judicial Commission of Inquiry into the banks as it believes this would provide the Big Four banks with an ideal opportunity to reveal the reasons for the account closures. Oakbay has reached out to a number of politicians on the issue of the banks’ unilateral closure of their accounts, including Pravin Gordhan, and believes justice needs to be done.

“Bell Pottinger has encountered widespread sympathy for the way Oakbay has been treated and did not seek to obtain this information, but was made aware of it. Given its relevance to the issue of Oakbay’s closed accounts, the public interest and the ongoing media coverage of the story, Bell Pottinger contacted Fin24/News24 to put the information into the public domain.

“It is no secret that Bell Pottinger has advised Oakbay Investments on its corporate communications since March this year.  Bell Pottinger abides by strict professional ethics. Its source was not the Gupta Family as News24 implies and Bell Pottinger has never met with or spoken to Minister Zwane or any of his advisors.”

Source: Fin24: http://www.fin24.com/Economy/exclusive-gupta-pr-firm-knew-about-bank-probe-weeks-before-zwane-dropped-bomb-20160922

Make Better Decisions. Start your Biznews Premium FREE TRIAL today.