The world is changing fast and to keep up you need local knowledge with global context.
The Canute-like ANC is desperately trying to turn back a relentless tide. SA’s ruling political party is trying to buy time so as to minimise inevitable damage of dispatching its deeply compromised President Jacob Zuma. But that luxury is disappearing fast as pressure grows on Zuma and his Indian immigrant “business partners”, the Gupta family. Ever since would-be cabinet ministers Mcebisi Jonas and Vytjie Mentor exposed the Gupta modus operandi, Zuma’s ejection has been inevitable. It was simply a question of when. ANC’s aged leadership prefers a slow consultative process that could take months. But after the nation witnessed on live television how its Parliamentarians refused to accept their own culpability and then defended a Zuma brush-off of a damning Constitutional Court judgement, public outrage has intensified. South Africans are unlikely to allow the ANC to work to anything like its preferred schedule. For the Zupta combine, as with the corrupt ancient Babylonians to whom they have been compared, the writing is now very much on the wall. – Alec Hogg
(Bloomberg) — Companies controlled by members of the Gupta family, who are friends of South African President Jacob Zuma, have been dropped by their bankers, broker and auditors after the governing party ordered a probe into their influence over the state. The pressure on Zuma is increasing as opposition parties unite in their efforts to unseat the 73-year-old leader of the African National Congress, which on Tuesday used its majority in parliament to defeat impeachment proceedings against him. Calls for the ANC to oust the president are growing after the country’s top court last week ruled that Zuma failed to uphold and defend the constitution by not abiding by a graft ombudsman determination to repay taxpayers’ money spent on his rural home.
“This bomb is starting to explode,” Johan van Dyk, the head of forensics at Censeo (Pty) Ltd., which carries out due diligence work, said by phone from Cape Town on Wednesday. Companies are distancing themselves from the Gupta family because their association could cost them customers and they “need to show they’re honest and they’ve got integrity for their other clients to believe them. It’s a huge decision,” he said.
Zuma’s seven-year-old term has been marred by scandals and controversy, with the ruling by the Constitutional Court and his impeachment vote marking a new low for his administration.
Questions over the Gupta’s hold over the president mounted after senior ANC officials last month stepped forward with allegations that the wealthy Indian family offered them cabinet posts in exchange for business concessions, spurring the probe by the governing party and another by the Public Protector, the graft ombudsman. The Guptas deny any wrongdoing.
The family, who moved to South Africa in the early 1990s, is in business with Zuma’s son, Duduzane. He has a stake in a Gupta-owned company that’s seeking to buy Optimum Coal Mine, which had been placed into bankruptcy protection by Glencore Plc.
The transaction has come under criticism because Mines Minister Mosebenzi Zwane met with Glencore Chief Executive Officer Ivan Glasenberg in Switzerland to advance the deal. The minister denied giving the Guptas and Zuma any preferential treatment, saying he was only trying to preserve jobs.
KPMG LLP, the accounting firm, stopped auditing Oakbay Resources & Energy Ltd. and other Gupta-controlled businesses, ending a 15-year relationship, Oakbay Investments, a holding company that controls Oakbay Resources, said in a statement on Wednesday. Sasfin Holdings Ltd. has ceased being Oakbay’s broker, while Barclays Africa Group Ltd.’s Absa unit and FirstRand Ltd.’s First National Bank, or FNB, have stopped providing banking services, it said.
“We find the timing of FNB’s decision staggering given Oakbay’s accounts are in excellent financial health and we have been a loyal and profitable customer for many years,” Johannesburg-based Oakbay said. “In December 2015, we also received a similar notification from Absa Bank with no explanation. Interestingly, this remained confidential for over three months until a couple of days ago.”
Victoria Geoghegan, a partner at Bell Pottinger, which represents the Gupta family, didn’t immediately respond to a request for comment. London-based Schillings International LLP said in an e-mailed response to questions that it doesn’t comment on client matters and declined to confirm or deny whether it represents the Gupta family. Schillings in a letter to Johannesburg-based Internet news provider Biznews dated March 9 said it acts for Atul Gupta and Oakbay Investments.
Mcebisi Jonas, South Africa’s deputy finance minister, said last month that members of the Gupta family offered him the post of finance minister. Zuma spurred a selloff in the rand and South African bonds in December when he replaced his respected finance minister, Nhlanhla Nene, with a little-known lawmaker. Four days later, Zuma reappointed Pravin Gordhan to the post which he had held from 2009 to 2014. Zuma has said only he can appoint ministers.
Barclays Africa Group Chief Executive Officer Maria Ramos is married to former Finance Minister Trevor Manuel who on Tuesday called on Zuma to step down. South Africa’s richest man, Christo Wiese, and Nelson Mandela’s former prison mate, Ahmed Kathrada, did the same in the past week.
FNB has “given notice to close various banking accounts of entities that may be associated with Oakbay Investments” and has no bank account for the company, Virginia Magapatona, a spokeswoman for the Johannesburg-based lender said in an e-mailed statement, declining to give further details. Barclays Africa doesn’t have a relationship with Oakbay Resources and doesn’t comment on confidential customer information, it said in an e-mailed statement.
Duduzane Zuma and Gupta family members are directors of at least 11 of the same companies, according to publicly available records, while the family’s companies had in the past also employed Zuma’s daughter and one of his wives.
“While the Guptas may have been judged as guilty of state capture by the public, there is nothing factual or legal that proves this is the case as yet,” Garth Mackenzie, founder of Johannesburg-based TradersCorner.co.za, said. “I would have thought the banks would have stronger grounds to act if the Guptas had been found guilty in a court of law. It seems a bit of a knee-jerk reaction by the banks to the public outcry at the Guptas.”
Oakbay said the decision by the financial institutions is “clear proof that the recent allegations against the company and the wider Gupta family are all part of a carefully orchestrated political campaign.”
The company said its detractors need to provide evidence of any wrongdoing.
“It is time to put up, or shut up,” Oakbay said.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.