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Noose tightens as Bank of Baroda drops Guptas - report

Cape Town - Another bank bombshell is about to implode for the Gupta empire as the Bank of Baroda is believed to have given it notice that it will no longer be doing business with the controversial family.

If it is true then it adds a fresh blow to the wealthy Gupta family, who are close friends of President Jacob Zuma. It also comes at a time when #GuptaLeaks, a trove of about 200 000 emails, provides a frightening glimpse into the machinery of corruption involving the family, who have remained silent on a growing list of damning allegation.

Bloomberg reported as early as March this year that the Bank of Baroda was winding down its relationship with companies related to the Gupta family, according to people familiar with the matter.

In an e-mailed response to Fin24 at the time, Oakbay said it was not aware that its bank accounts were being closed and that the reports were not correct. Further, the company claimed such reports were "part of a ploy to put pressure on Baroda to close the accounts".

READ: Oakbay rubbishes report of Gupta bank account closure

However, The Star reported on Wednesday that several Gupta employees confirmed that management called a meeting with staff at The New Age newspapers and ANN7 to inform them of the Bank of Baroda served it with a notice of termination.

A source added that Oakbay Investments employee relations manager Kgomotso Amazu allegedly encouraged staff to sign a petition to pressure the Mumbai-based lender to reverse its decision.

A similar move followed when South Africa’s four biggest banks last year closed accounts linked to the Gupta family, citing the need to comply with international banking rules when dealing with customers and concern over their reputations.

At the time, Oakbay staff addressed a letter to Barclays Africa CEO Maria Ramos, FNB CEO Jacques Celliers, Standard Bank CEO Ben Kruger and Nedbank CEO Michael Brown, the staff pleaded with them to “reopen the bank accounts so that we do not have to suffer” as they have “not done anything wrong”.

Oakbay's auditor KPMG, the top four banks and Oakbay’s JSE sponsor Sasfin Capital all cut ties with the Guptas in March last year.

The Bank of Baroda has come under pressure, including being mentioned several times in the public protector’s 2016 State of Capture report.

READ: OUTA claims Indian banks gave Guptas inflated bonds on properties

The alleged notice of termination comes shortly after the Organisation Undoing Tax Abuse (OUTA) decided to take action against the bank for what it claims to be a failure to comply with banking laws.

"It now appears that the cash taps are being shut, we hope that other affected parties will see that corruption does not pay,” said OUTA chief operations officer Ben Theron on Wednesday.

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.

OUTA added that it has sympathy for the employees of the Gupta empire who are concerned about how they will be paid.

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