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Focus turns to frozen Gupta mine funds as Bank of Baroda exits SA

Feb 12 2018 14:46
Tehilla Niselow

Johannesburg -  The Organisation Undoing Tax Abuse's Ben Theron said on Monday that while OUTA regrets the closure of the Bank of Baroda in South Africa and the impact this will have on jobs, "they only brought it on themselves".

He added OUTA was still trying to figure out what the bank leaving SA would mean for roughly R1.75bn in Gupta-linked rehabilitation funds the bank ring-fenced.   

In September 2017, the anti-corruption advocacy group was granted an interim court order forcing the Bank of Baroda to ring-fence R1.75bn in rehabilitation funds for the Optimum and Koornfontein coal mines.

The North Gauteng High Court at the time directed the Bank of Baroda to continue to hold the Optimum Mine Rehabilitation Trust and the Koornfontein Mine Rehabilitation Trust in interest-bearing accounts. 

According to the National Environmental Management Act funds in rehabilitation trusts cannot be used for purposes other than "managing the environmental damage caused by mining activities”.

Baroda leaving SA

The Bank of Baroda has recently notified the Office of the Registrar of Banks that it is set close shop in South Africa.

The SA Reserve Bank said in a statement on Monday that its registrar is in discussions with the bank to ensure its orderly withdrawal from SA. 

On Monday Theron said that OUTA was "still trying to ascertain what this means for the mine money, as it belongs to the communities… we want to have the trustees changed as we believe they are irresponsible".

The lobby group said last year that it was concerned that the rehabilitation money could be moved offshore or used for other purposes if it were not ring-fenced.

OUTA originally approached the courts to freeze the mine rehabilitation funds, after the Guptas lost an earlier attempt to compel the Bank of Baroda to keep offering them banking services. 

This after a number of other banks had closed their Gupta-linked accounts. 

Theron said on Monday that he’s convinced another South African institution will be able to take over the R1.75bn held in the two mine rehabilitation trusts from the Bank of Baroda as it exits SA. 

OUTA, meanwhile, will head back to court on 31 May and 1 June 2018 to try have the interim court order made final.

When Fin24 contacted the Bank of Baroda's Sandton office and requested media comment for the reasons behind the exit, a man who refused to be identified said he was unauthorised to comment and suggested contacting the head office in Mumbai.

The head office had not immediately replied to requests for comment.

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bank of baroda  |  optimum coal  |  outa  |  ben theron  |  guptas
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