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Oakbay CEO slams bank risk fears on Gupta accounts

Cape Town - Oakbay's bank accounts present low risk for money-laundering activities or use of the financial system to further corruption, said Ronica Ragavan, acting CEO of Oakbay Investments.

Ragavan was the first respondent in Oakbay’s responding affidavit to Finance Minister Pravin Gordhan’s court bid to prevent him from intervening with banks on behalf of the Gupta family. 

In the court documents, Ragavan says the overwhelming majority of the banking services used by the Oakbay affiliated companies are used for payroll and other business transactions that are ordinary and customary.

"Oakbay has no complex treasury functions such as currency trading, hedging or complex loans.” 

Last year, South Africa's four biggest banks - Absa, FNB, Standard Bank and Nedbank - severed ties with Oakbay Investments owned by the Guptas. At the time the banks did not provide any reasons for their action, but in separate affidavits submitted later, the banks cited reputational risks and fears of money-laundering as reasons. 

READ: Banks acted alone when dropping Guptas - banking association

In April last year, Nedbank Chief Executive Officer Mike Brown wrote a letter to Oakbay Investments, informing them that a continued banking relationship with the company “created material business risks that could pose significant reputational risks”. This came to  light in an affidavit that Nedbank filed in the Pretoria High Court in response to Gordhan’s earlier court application. 

READ: Nedbank says mines minister urged them to keep Guptas as clients 

In the responding affidavit of Friday, Ragavan said Oakbay believes that a properly informed risk analysis of the company’s bank accounts demonstrates that the accounts present “low services risk for banks in South Africa”. 

Ragavan also reacted to an earlier affidavit submitted by FNB in which the bank said it had severed ties with Oakbay to prevent the bank from being used for money-laundering and other unlawful activities.

She pointed out that neither Oakbay nor its affiliates engage, in the normal course of business, in US dollar or UK sterling transactions. 

“The relevant legal entities are organised under the laws of South Africa and the relevant individuals are citizens of South Africa and India and residents of South Africa.” 

Therefore neither Oakbay, nor its affiliates are the subject of any economic sanctions programmes under the laws of the US, the European Union, any other recognised country or the United Nations. There are no red flags or other concerns about the Group or its shareholders.  

She said the court should disregard all references to such matters (money-laundering fears and red flags) in the various opposing affidavits. 

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