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Call to probe bank mandates

Sep 04 2016 08:26

A Cabinet committee called for a judicial review to consider creating a state bank and probe the mandates of banking oversight bodies after the nation’s four biggest lenders said they would stop doing business with the Gupta family, which has ties to President Jacob Zuma.

The decision followed an investigation by an interministerial committee led by Mineral Resources Minister Mosebenzi Zwane, who previously called on the banks to resume doing business with the Gupta-owned Oakbay Investments.

Zuma’s son Duduzane is in business with the Guptas and one of his wives has worked for them.

While Zwane said it was a Cabinet resolution, Cabinet made no mention of the recommendations in a statement issued on Friday after its meeting this week.

Evidence shows the banks’ actions “were as a result of innuendo and potentially reckless media statements and, as a South African company, Oakbay had very little recourse to the law”, Zwane said on the department’s website.

“Looking into these mandates and strengthening them would go a long way in ensuring that, should any other South African company find itself in a similar situation, it could enjoy equal protection of the law.”

The call for a review of the decision by the banks came amid increasing tensions between government, Treasury and the SA Reserve Bank, with Finance Minister Pravin Gordhan under police investigation for setting up an allegedly illicit surveillance unit when he was head of the Reserve Bank. – Bloomberg

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