Why the Gupta CEO is dead wrong about a banking conspiracy

Crocodile tears are flowing over Oakbay CEO Nazeem Howa’s insistence a conspiracy among SA’s Big Four banks threatens to kill the Gupta companies. For one thing, SA banks are well aware of the hefty penalties such collusion would attract. For another, two years back the Big Four paid R125m between them for not imposing adequate money laundering controls. So were there even a hint of money being illegally shovelled into Dubai…well, draw your own conclusion.

Besides, last we heard from Guptaland their banking business was shifting to a more “enlightened” institution. Apparently this was to Bank of Baroda, “India’s international bank”, which has branches in Durban and Johannesburg. Judging from Howa’s new angle of attack, that option seems to have evaporated.

The next obvious hurdle for Howa’s lot is to find R2.1bn to pay for Optimum Coal, a deal the Guptas went to such lengths to secure, including the on-site support of their Mining Minister. Although Glencore owns the mine, the purchase price was primarily to settle debt owed to FirstRand, Investec and Nedbank.

That means contrary to Howa’s allegations, the banks possessed a powerful incentive to actually keep the Gupta businesses alive. If the Guptas don’t cough up, the banks don’t get their debt settled and Optimum falls back into business rescue. Hopefully its managers will resuscitate a previously agreed deal. We trust that this time, Eskom’s CEO Brian Molefe won’t intervene at the 11th hour.

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