Gupta inversion: Tuesday’s smile for “day in court” has turned into a snarl

The more we see the Gupta family in action, the more you realise political analyst Dr Somadoda Fikeni nailed it back in April when he described them as “grotesque, corrosive, in your face….over-excited amateurs.” The latest dramatics of the crony capitalist immigrants from India re-inforce that notion. Earlier this week, their gun-for-hire Nazeem Howa left with immediate effect for “health reasons”. Then the Guptas publicly expressed their “delight” after Finance Minister Pravin Gordhan exposed more than 70 of their dodgy financial transactions in the High Court. A day later their bravado has vanished, replaced by a demand that Gordhan withdraw his court application. In an interview with the Nieman Lab at Harvard, New York Times editor Dean Baquet explained that serial bullshitter Donald Trump has challenged the newspaper’s language: “We didn’t know how to write the paragraph that said ‘This is just false.’ Trump has ended that struggle.” The outrageous Guptas are doing the same for South Africa. Maybe someone has just explained to them how Exchange Control regulations work – and the hefty penalties levied on those who break them. – Alec Hogg

By Paul Burkhardt

(Bloomberg) — Oakbay Investments, which is controlled by President Jacob Zuma’s friends the Gupta family, demanded South African Finance Minister Pravin Gordhan to withdraw a court application implicating the company in “suspicious transactions,” a day after welcoming the chance to prove its innocence.

Oakbay said Gordhan should withdraw the application for a court to rule that he has no obligation to intervene in a decision by the country’s largest banks to shut Gupta-controlled company accounts, as Oakbay has asked him to do. The legal process would mean spending “taxpayers’ money in a reckless and inappropriate manner,” Oakbay’s lawyers said Tuesday in a letter to Gordhan’s attorneys.

The contradiction of the Guptas fleeing South Africa for Dubai says it all. More magic available at www.jerm.co.za
More magic available at www.jerm.co.za

In his affidavit last week, Gordhan attached an annex from the Financial Intelligence Center, a corruption watchdog, that implicated family members and their businesses in 72 alleged suspect transactions totaling 6.8 billion rand ($489 million). Oakbay said Tuesday all the activities in question were approved by the banks that handled them.

The Guptas, who are in business with Zuma’s son, Duduzane, have been investigated by the nation’s graft ombudsman over allegations that they have wielded undue influence over government appointments and contracts. The family and the president deny wrongdoing. Zuma has sought a court interdict to prevent the publication of the results of the probe.

Attorneys for the minister Wednesday morning had already declined the request to withdraw the application and tender costs, Oakbay said.

Oakbay Responds to Application by Minister of Finance

Yesterday afternoon, van Der Merwe Associates (“VDMA”) notified the Minister of Finance’s attorneys of their client’s (the Oakbay Group of companies) (www.OakbayInvestments.co.za) intention to oppose the application issued under case number 80978/16 on 14 October 2016 – unless the Minister of Finance withdraws the application and tenders costs by this afternoon – Wednesday 19 October.

VDMA’s letter noted that the Minister of Finance’s affidavit implicated its clients in inappropriate and unlawful conduct. The affidavit also insinuated that VDMA’s clients would “expose the fiscus not only to loss of tax revenue but also put the burden of mining rehabilitation on the fiscus.” which VDMA noted was “uncalled for, malicious and nothing but vexatious.”

VDMA’s client disproved this earlier this week with evidence of the transfer of the Optimum Rehabilitation Trust Fund from Standard Bank to Bank of Baroda, which followed a request by Advocate Thuli Madonsela on 4 October 2016.

VDMA advised its client to oppose the Minister of Finance’s application, obtain all the necessary information from the relevant role players and ask for punitive costs order against dismissal of the application.

VDMA’s letter also stated that the Minister of Finance’s letter has been launched with the financial resources of the tax payer. VDMA’s client does not dispute that Minister of Finance’s is not by law compelled or obliged to intervene in the relationship between VDMA’s clients and the commercial banks. However, VDMA noted that to spend tax payers’ money in “a reckless and inappropriate manner” would constitute a contravention of the provisions of the Public Management Act, No.1 of 1999 – which would warrant “further action against those officials responsible for same.”

Furthermore, VDMA noted that:

“In order that we do not expose the fiscus unnecessarily to costs we propose that the application be withdrawn” – that the Minister of Finance’s application is withdrawn and that the Minister of Finance’s tenders VDMA’s client’s costs, before close of business on 19 October 2016.

VDMA reiterated that the purpose of its letter was to offer the Minister of Finance the opportunity to save taxpayers money.

VDMA also noted that its clients “would like” to put their formal version before court since the Minister of Finance has chosen that forum, so if the application is not withdrawn then “the matter must proceed and we will gladly do the necessary in order to restore the misrepresentation created by the papers.”

VDMA concluded its letter by noting that the Minister of Finance had made “defamatory and untrue remarks towards members of the Gupta Family by insinuating that they have been involved in inappropriate conduct” and that “their rights remain strictly reserved.”

This morning, attorneys for the Minister of Finance declined the offer to withdraw the application and tender costs.

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