The Guptas seem to be having the last straw from SA banks as the Bank of Baroda South African branch begins the move to finally shut down accounts owned by companies belonging to the family.
According to a report by Bloomberg, Bank of Baroda branch in SA have begun plans to finally close down the family’s account leaving the friends of President Jacob Zuma without banking facilities in the country.
Citing three sources familiar with the matter, Bloomberg noted that the Mumbai-based lender had begun winding down its relationship with Gupta-owned companies to ensure it is in compliance with banking rules as the controversial family is being accused of using their friendship with Zuma to influence cabinet appointments and government contracts.
Though the family denied the allegations, the State capture report compiled by former Public Protector Thuli Madonsela, exposed further shady dealings between them and the president’s family.
Oakbay Investments, the Gupta’s main holding company, said it isn’t aware that Baroda will close its accounts. “I can only imagine that your source has their own agenda, and wants to put pressure on Bank of Baroda,” the company said in an emailed response to questions.
South Africa’s four biggest banks had last year closed accounts linking them to the Gupta family after issuing them more than a months notice and citing the need to comply with international banking rules when dealing with customers and concern over their reputations.
The Bank of Baroda followed the lead of auditing firm, KPMG and financial group Sasfin, who stepped away from the Guptas citing reputational risk due to the allegations.
In August last year, South Africa’s First National Bank (FNB) closed the accounts of a company owned by the wealthy family, as a sign of cutting ties with the Guptas following allegations over their relationship with President Jacob Zuma.
The family, led by brothers Atul, Ajay and Rajesh, asked Finance Minister Pravin Gordhan to stop the banks terminating the accounts, spurring Gordhan to seek a court order stating that he can’t prevent lenders from cutting clients.
But in reply, the Deputy President, Cyril Ramaphosa urged the family to take their case to court if they are sure they are innocent of all allegations.
Bloomberg also reported that the Bank of China, South African branch dropped the Guptas as clients in September, citing court documents filed by the family in January.
The country’s anti-graft ombudsman in November also called for a judicial inquiry into the allegations against the Gupta family.
Bank of Baroda’s decision to close down accounts belonging to the Guptas follows a report by Sunday Times last year that the SA Reserve Bank asked the bank to release documents containing the accounts owned by the Gupta family
The demand by Reserve Bank was part of a wider investigation into allegations that the controversial family may have illegally channeled money out of the country.