01 Mar

Bank of Baroda Cries Foul as Cash Frozen in South Africa Gupta Case

India’s Bank of Baroda objected to the freezing of some of its funds in South Africa after it was alleged to have helped transfer money meant for the development of a government-backed dairy farm to the politically connected Gupta family and their associates.

The 30 million-rand ($2.5 million) preservation order is wrong because the money due to clients had already been withdrawn and the attachment of an equal amount of the lender’s own funds is “unsustainable,” Luke Spiller, a legal representative for the Bank of Baroda, said in the Free State province’s High Court in Bloemfontein on Thursday.

The court documents showed that other banks transferred cash to the same dairy farm but their money wasn’t frozen, making the order against Bank of Baroda unfair, the lawyer said.

The case is related to a state-owned farm in the Free State leased to Gupta-linked company Estina (Pty) Ltd. in 2012.

The regional government agreed to help develop the land, but the High Court on Jan. 19 gave the National Prosecuting Authority permission to freeze the project’s assets after more than 220 million rand destined for the farm was said to have been transferred to Atul Gupta, one of three brothers, and a number of companies and associates. State prosecutors allege Atul Gupta received 10 million rand.

Atul Gupta and businesses linked to his family have applied to the same court to reconsider the assets’ attachment. The Gupta family have close ties to former President Jacob Zuma and have been accused of using the association to win state business and influence government appointments.

Zuma and the Guptas have denied wrongdoing. The crackdown on the dairy farm project came just weeks after South African President Cyril Ramaphosa replaced Zuma as head of the ruling African National Congress.

The prosecutor’s papers are “a national embarrassment,” Michael Hellens, a lawyer acting for a number of Gupta-linked companies including Oakbay Investments Pty Ltd., said in the same court.

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13 Feb

Bank of Baroda to Exit South Africa Amid Probe Over Gupta Ties

The Bank of Baroda plans to exit South Africa as it faces a probe by regulators about its dealings with the politically connected Gupta family.

The state-owned Indian lender is in talks with the South African bank regulator to ensure an orderly withdrawal that won’t disadvantage any depositors, the Pretoria-based registrar said in an emailed statement on Monday. The central bank has no further comment on the matter, it said.

Bank of Baroda’s retreat comes less than a week after the company confirmed South Africa’s central bank is probing historical transactions.

Bank of Baroda, which is the only lender in South Africa still offering services to companies linked to the Guptas, last year sought a court order that will allow it to close their accounts.

The Gupta family, who are friends of President Jacob Zuma and in business with one of his sons, have been accused by politicians and civil society groups of using that relationship to influence state contracts and cabinet appointments. Zuma and the family deny wrongdoing.

Chief Executive Officer P.S. Jayakumar said in an interview with BloombergQuint that the lender is talking to regulators around the world to reduce its presence in countries where it doesn’t see a strong business case to rather focus on larger markets where it can better serve new customers.

He declined to comment on the Gupta allegations in the interview with the Indian TV venture, saying there are many factual errors in some of the reports.

A Mumbai-based spokesman for Bank of Baroda didn’t immediately respond to an email and phone call seeking comment.

The bank was said to have transgressed its own rules by being significantly exposed to one client.

The lender may hold as much as 1.75 billion rand ($146 million) on behalf of trusts for mines, linked to the Guptas, and by law that money must be used for environmental rehabilitation, according to the civil society group Organisation Undoing Tax Abuse.

Source: https://www.bloomberg.com/news/articles/2018-02-12/bank-of-baroda-to-exit-south-africa-amid-probe-over-gupta-ties