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JOHANNESBURG — After months of speculation, India’s Bank of Baroda finally seems to be moving on closing the Guptas’ bank accounts. Several months ago, a Bloomberg report revealed that Bank of Baroda was considering winding down its links to the Guptas. But nothing seemingly happened thereafter. Interestingly, it looks like it may have taken a complaint from OUTA to break the camel’s back for Baroda. Just last week, OUTA sent a letter to authorities, including the Registrar of Banks and the FIC, in which it raised a number of interesting facts about the Guptas’ bank behaviour in South Africa. In one revelation, it has emerged that the Bank of Baroda gave bonds to the Guptas which were several times bigger than the actual property values, sparking questions about what was done with the surplus cash once the property transactions were concluded. Now that Baroda is acting, this could be a serious problem for the Guptas. Reports emerged this week that Oakbay told ANN7 employees about the account closures. Bank of Baroda will be the latest in a long string of banks to shun the Guptas, including all of South Africa’s four major banks. I can further reveal that my understanding, from a source, is that the Guptas have for some time been using so-called ‘agents’ – from across the country – to pay salaries from accounts not linked to Oakbay in order to keep their payroll going. As to whether the Guptas have been paying these agents from Bank of Baroda accounts is unknown, but the taps are starting to run dry. – Gareth van Zyl
“It now appears that the cash taps are being shut, we hope that other affected parties will see that corruption does not pay,” says Ben Theron, Organisation Undoing Tax Abuse (OUTA) Chief Operations Officer.
On 13 July, OUTA wrote to the Registrar of Banks, the head of financial surveillance at the South African Reserve Bank and the Financial Intelligence Centre, calling for an investigation into the Bank of Baroda and the State Bank of India over their links with the Guptas.
In particular, OUTA pointed to the banks’ provision of massive bonds for Gupta properties, with some bonds massively higher that the property values.
A copy of OUTA’s letter to the authorities, the details of the properties and bonds, and the Registrar’s response are on OUTA’s website.
On Tuesday, the Registrar of Banks wrote to OUTA, acknowledging receipt of the request to investigate, noting the content in it and promising it “will be dealt with accordingly” without detailing how.
On Wednesday, The Star reported that the Bank of Baroda is planning to dump the Gupta accounts.
The newspaper reported that employees of the Gupta-owned newspaper and TV station were called to a staff meeting on Tuesday afternoon and warned that the bank was closing the company’s accounts; the closure has implications for payment of staff salaries. “We understand that Bank of Baroda has given them (Guptas) a month to find a new home,” The Star reported an employee as saying.
OUTA has sympathy for the employees of the Gupta empire who are concerned about how they will be paid, as the Guptas and their banks should have considered their situation before involving themselves in behaviour that appears to flout financial laws and possibly involves money laundering.
- OUTA, the ‘Organisation Undoing Tax Abuse’, is a civil society body.