Gupta companies lose bid to keep bank open

Doris Richards
March 13, 2018

In January, Nedbank informed the Bank of Baroda that it would terminate its relationship with the bank in three months.

Baroda had been using Nedbank's infrastructure to operate in South Africa, but said it was no longer economically viable to operate here.

The North Gauteng High Court on Monday dismissed an urgent application filed by 19 Gupta-linked companies wanting to compel the Bank of Baroda to continue offering services to them even though it has already indicated that it wants to close its South African branch. Ajay Gupta has been named as a fugitive from the law.

Pressure has been mounting on the Guptas since Zuma was forced from office last month by the ruling African National Congress party.

He said the bank had every right to terminate any business contracts with the Gupta companies and could not be expected to service their accounts without any infrastructure. "I further conclude that the balance of convenience far outweighs that of the applicant's and tilts in favour of (BoB)", Mavundla said.

The Bank of Baroda is the last financial institution in the country which is still prepared to lend to Gupta-linked companies.

The companies cited difficulties they would have with the closure of paying salaries to thousands of their employees in their businesses ranging from information technology to mining.

The bank announced in February that it would be shutting its doors and exiting the country by the end of March, but the Gupta-owned companies, which include Oakbay Investments‚ Oakbay Resources & Energy and Optimum Coal Mines, challenged this, saying that an interdict ruled in December prevented the bank from leaving the country.

The Gupta family, who arrived in South Africa from their hometown of Saharanpur in UP about two decades ago, has established a massive business empire in diverse fields, allegedly through their closeness to ex-president Zuma.

The Gupta-linked companies had argued that if Baroda left SA‚ it would contravene Makgoka's judgment.

Indian tax inspectors last Tuesday raided premises of the Gupta family.

Other reports by Iphone Fresh

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