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An explosive affidavit by Johannesburg-listed Standard Bank has confirmed long-held suspicions that the immigrant Gupta family is in charge of political affairs – and not President Jacob Zuma or the ANC. Court documents reveal how the Guptas have political power to literally put words into politicians’ mouths. This state of affairs is truly appalling, with an elite group of business players and ‘captured’ politicians making decisions in the interests of a greedy clique. That ANC leaders have allowed this state of affairs to flourish at the expense of the millions of supporters who have kept them in power is mindboggling and makes a mockery of any talk that the ANC is a party of the masses, pro-democracy and a movement that acts in the best interests of the nation. The Gupta family have vowed to challenge allegations in court by Standard Bank. However, it is unprecedented for a commercial bank – and Standard Bank is the largest African bank by assets – to take a swipe at the most powerful politicians; Standard Bank’s executives would not have taken the decision lightly to press ahead with their court action to stop political interference in their business activities. Standard Bank would have checked and tested the facts rigorously before taking such a bold and confrontational move towards the president. With the law-enforcement agencies and the public protector’s office so obviously under the control of Zuma, it seems unlikely the Gupta or Zuma families will be successfully prosecuted by the state any time soon. It is increasingly over to non-governmental organisations, opposition parties and commercial entities like banks to challenge the status quo. Let us all keep our fingers crossed, and pray, that the judiciary proves impossible to capture because the courts are increasingly looking like the last bastion between South Africa and #Zupta. – Jackie Cameron
By Dewald van Rensburg, City Press
Johannesburg – The extent of the Gupta family’s fight against the major South African banks, together with their friend, Mineral Resources Minister Mosebenzi Zwane, has been laid bare.
In a long and scathing affidavit this week, Standard Bank attacked what it called “impermissible political interference”, aimed at reversing its decision to close the bank accounts of Gupta-owned companies.
It called the campaign by political allies of the Guptas unprecedented, saying it was unlike anything the banking group had ever experienced anywhere else in the world.
A major observation in the affidavit, by Standard Bank group legal counsel Ian Sinton, is that the Guptas have the political power to literally put words into senior political figures’ mouths.
A set of accusations, framed in exactly the same way, first appeared in letters from Oakbay, and were then repeated by ANC leaders, followed by the controversial interministerial committee led by Zwane, said Sinton.
“The first illustration of Oakbay invoking direct political pressure was its request to the ANC that the party intervene for its benefit,” said Sinton.
This led to the bank’s CEO, Sim Tshabalala, meeting ANC secretary-general Gwede Mantashe, deputy secretary-general Jesse Duarte and economic transformation head Enoch Godongwana at Luthuli House on 21 April.
The ANC leaders asked Standard Bank to “respond to the accusation that it is colluding with ‘monopoly capital’ to oppress black-owned business”, reads the affidavit.
This was precisely the accusation that Oakbay had made earlier, in a letter it sent to an unnamed “international shareholder” in Standard Bank.
According to Sinton, the letter accused Standard Bank of collusion with the other South African banks, as well as of having racist motives in its closing of the Gupta companies’ accounts.
“The accusations were – and are – offensive, unlawful and unfounded,” said Sinton.
The fact that Oakbay could get the ANC to request this meeting and essentially put words in its leaders’ mouths “evidences the extent of Oakbay’s political influence and willingness to bring it to bear”, reads the affidavit.
The ANC heavyweights also asked Standard Bank to justify why it still had as its clients the construction companies that had been involved in the cartel which inflated the prices of soccer stadiums for the 2010 Soccer World Cup.
This trope was repeated later, when Standard Bank met the so-called interministerial committee (IMC).
“In short, the nature and tone of the ministers’ queries was substantially the same as those contained in Oakbay’s letter to the shareholder and those posed on behalf of the ANC,” said Sinton.
All four major banks in South Africa have cut their ties to the Gupta family’s businesses.
Absa led the pack by closing all accounts in December 2015. In the first week of April this year, the other three major banks followed suit.
The current court case stems from an application by Finance Minister Pravin Gordhan for a declaratory order that he cannot intervene in the banks’ dealings with their clients.
FirstRand, the owner of First National Bank (FNB), as well as Nedbank have also filed papers, while Absa says it will file “in due course”.
While all the banks support Gordhan, only Standard Bank gave extensive evidence.
Standard Bank is asking for a more muscular court order than the one Gordhan wanted.
It wants the court to declare that “no member of the national executive of government, including the president and all members of Cabinet, is empowered to intervene in any manner whatsoever in any decision taken by [Standard Bank] to terminate its banking relationship with Oakbay …”
None of the banks has pointed out specific transactions leading to their decision to close Gupta accounts.
They all point to the copious media reportage on Gupta influence on government leaders, but also to their obligations under local and international regulations to fight money laundering and bribery.
Nedbank’s letter, notifying the companies of the closure of their accounts on April 6, said banking them “may create material business risk and pose significant reputational risk”.
FNB’s CEO, Johan Burger, asserts that “since FNB was, in law, entitled to terminate its relationship, FNB’s reasons for doing so are irrelevant”.
Zwane and his committee
The bizarre behaviour of Zwane, and the supposed IMC he led, is the main target in the banks’ affidavits.
According to Zwane, the IMC – consisting of himself, Gordhan and Labour Minister Mildred Oliphant – was established at a Cabinet meeting on April 13.
Gordhan refused to be part of the supposed IMC and never attended its meetings with banks or other financial service providers.
Among the letters Standard Bank attached to its court papers is one from Gordhan to Zwane, dated April 22.
In it Gordhan contradicts Zwane, saying that in reality, “no IMC was established” at the April 13 Cabinet meeting and that the three ministers were “nominated” to look into the bank account issue, without one of them becoming the convenor.
Zwane has nevertheless called himself the chair of the IMC.
On September 1, Zwane issued an infamous statement in the name of the IMC, claiming Cabinet had now resolved that a judicial inquiry into the banks was needed and that core pieces of regulation might have to be revised.
Following an outcry, Cabinet distanced itself from this statement the following day, saying it was issued by Zwane in his capacity as chair of the IMC, which, evidently, did not actually exist.
The meetings the IMC held with the banks are also detailed in court papers.
Standard Bank met the IMC, with Zwane and Oliphant in attendance, on May 5.
Nedbank met the IMC on May 6.
According to Nedbank CEO Mike Brown, in reality, the only member of the IMC who was present, was Zwane.
The IMC apparently tried to cover up the absence of the other ministers. There were “various other attendees unknown to me”, said Brown.
This emerged when Nedbank afterwards requested a list of the attendees, and it included Oliphant.
Brown said this was a lie – she was never there.
He said his “overall impression” was that Zwane and his unknown colleagues wanted to know mainly if the banks had coordinated their actions, and whether Nedbank would want to become the Guptas’ main banker in its competitors’ place.
In his affidavit FirstRand’s Burger says he refused to meet the IMC because it could not guarantee that all three ministers would attend; neither could it produce, in writing, the actual allegations against the bank.
President Jacob Zuma
Standard Bank’s affidavit this week attacks President Jacob Zuma and his Cabinet for not having “positively repudiated” the serious threats that Zwane had made.
The real possibility remains that these recommendations could, “in one form or the other, be carried out and given effect”, said Sinton.
As recently as November 23, Zuma said in Parliament that the decision to close the accounts was taken “willy-nilly”. He also asserted that there had been collusion.
“It is clear that government seeks to further intervene,” said Sinton.
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